In an analyst’s report last year, it was discovered that the world’s second largest cryptocurrency may not be security anymore. Although the crypto launched as security and fulfilled the requirements, it is possible that the token evolved and can no longer be considered as security. Now, a similar stance is being resonated by Securities and Exchange Council (SEC) Chairman Jay Clayton.
Back in 2018, Clayton discussed the usage of cryptocurrencies in buying tickets for plays. He stated that if a token gives tickets in return for funding the performance than that may count as a security investment.
However, if the tokens are being used to sell tickets to the viewer at a later date than that is only decentralized and will not count as securities.
Clayton had also mentioned that networks like Bitcoin are decentralized i.e. do not involve a central authority that is held responsible for it are not securities.
He also added that these are much more similar to fiats like dollar and yen and the people investing in them are expecting them to perform similarly.
In a recent letter, Clayton stated that he agreed with Director Hinman who believed that the asset may be launched as security but it is not static and may change accordingly. Hinman also stated that Ether is no longer a security.
He also elucidated the situation by adding that security requires a central managerial party and since Ether lacks it, it can no longer be considered a security under the Howey framework.