The prices of Ethereum and Bitcoin jump as rules SEC Ether is not a security

A gray cloud over the heads of cryptocurrency investors raised Thursday after the Securities and Exchange Commission (SEC) ruled that Ethereum is not a security.

The price of Ethereum rose 10% to $ 514 in response to the decision, revealed Thursday in statements prepared by Corporate Finance SEC director William Hinman at the Yahoo Finance All Market summit: Crypto.

"Putting aside the fundraising that accompanied the creation of Ether, based on my understanding of the current state of Ether, the Ethereum network and its decentralized structure, the current offers and sales of Ether are not securities transactions", Hinman said.

Ethereum was not alone in its ascent. In total, the market capitalization of all cryptocurrencies tracked by CoinMarketCap increased by $ 18 billion on Hinman's comments. The value of Bitcoin also rose 5% to $ 518, while Ripple rose 6% to 56 cents.

Previously, investors had been placed in a nervous state following the May reports that regulators were discussing whether the business, the second largest cryptocurrency in the world by market capitalization, could be considered a & # 39; fairness. And even before that, the cryptographic space had been shaken by the SEC's April chief comments, Jay Clayton, that "every ICO I've seen is a security". Bitcoin buyers nevertheless offered some respite, with Clayton noting that he did not consider Bitcoin a stock offering.

Hinman explained his Thursday motivations on Ethereum as such: since the Ethereum network is "sufficiently decentralized", no single party should make managerial decisions about the company. And since the decision-making process is distributed, no single party or person will receive key information that could be used for an unfair advantage, for example to conduct insider trading.

"When a network becomes truly decentralized, the ability to identify a broadcaster or promoter to make the required information becomes difficult and less significant," he said on Thursday. "As with Bitcoin, the application of the regime of disclosure of federal securities laws to current transactions in Ether would seem to add little value."

Although it also points out that while Ethereum is not classified as security now, the classification is "non-static".

However, the price of Ethereum is down 31% for 2018, due to a wider slowdown in the cryptocurrency market. The value of Bitcoin also fell to $ 6,600, falling from $ 13,860 at the start of the year.