The US Securities and Exchange Commission stands firm believing that the major cryptocurrency should not be considered as securities.
The US regulator has unveiled a response to the application filed by Cipher Technologies Bitcoin Fund this May. According to the application the company wanted to launch a closed interval fund and investment company. Meanwhile, bitcoin was classified in the document as securities, which was opposed by the experts from SEC citing the Howey Test and digital asset analysis guideline.
The experts noted that the company intends to invest assets in cryptocurrencies and thus does not comply with the definition of an investment company under the corresponding law. This means that Cipher filed a wrong application N-2.
It was also explained by the authority that the market would face new challenges in the case of classification of bitcoin as securities. Specifically, the coin would be considered as securities everywhere while companies like the subject fund might become underwriters.
Cipher Technologies Bitcoin Fund also failed to take into account investors' protection, including pricing, storage and measures against price manipulation.