SEC reminds: bitcoin is not security

Posted 07 October, 2019

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.

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07 October, 2019 11:25

← Algorand lost part of its assets due to security breach

Algo Capital, the investment division of the US-based blockchain startup Algorand lost around $1-2 million in Algorand (ALGO) tokens and Tether (USDT) stablecoins. The company management informed investors about lost access to a hot wallet. The remaining funds were stored in a cold wallet.

Algorand lost part of its assets due to security breach

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LongHash: ICO projects not attract investors →

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LongHash: ICO projects not attract investors
Replies 1
08 October, 2019

Hakimi Abdul Jabar from Malaysia

As a crypto investor & international tech lawyer, I'm not a bit worried with the US SEC's ruling. The litany of US Federal Court decisions that cryptos fall under the definition of commodity & thus under the US CFTC's enforcement jurisdiction means that cryptos just like any other commodity such as gold, wheat & oil can be traded for profits & thus realize the commercial viabilities of crypto-commodities investment trading companies, platforms etc. Someday, courts throughout the world will follow China's Hangzhou Internet Court's decision that recognized that cryptocurrency assets have the attributes of virtual property and should be protected in accordance with regulations. The rise of mutual funds and ETFs that track commodities prices (or futures) has allowed investors easy access to these assets which has lead investors to speculate or diversify by buying commodities (or futures). In short, the same can be expected of crypto-assets backed papers as securitized commodity-linked instruments.
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