BlockEffect
Editor
2 min read | 9 months ago

Ethereum Might Be in Danger for Investors

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A report from the Wall Street Journal (WSJ) declared in June 2018, a U.S. Securities and Exchange Commission (SEC) senior has formally said altcoin Ethereum (ETH) will be defined as an insecurity. 

 

William Hinman, the SEC Corporation Finance Director, said at Yahoo Finance Market that the decentralized structure in Ethereum does not offer any securities transactions.

 

In May, the WSJ published a news article which gained attention from society. It reports on the U.S. regulation considering that Ethereum was in “gray zone.” Since Ethereum was first distributed in 2014, it raised over 31,000 Bitcoin (a valuation of about $18.3 million) which is the first  Initial Coin Offerings (ICOs) in the crypto industry.

 

The profits of the ICO were used to develop the ETH platform, and this behaviour led many investors who were trading with ETH concerning its foundations - the proceeds based on the profits gaining action of others. 

 

According to the report from WJS,  regulators still need time to analyze whether the Ethereum Foundation has any negative influences on distribution and value of the asset. These questions would be classified in the security category. 

 

The co-founder of ETH Foundation Joseph Lubin emphasize that the investors of ETH “share a stake in a common enterprise,” and the profit from the investment is an encouragement for people to continue running things on this platform. 

 

At the same time, Jay Clayton, who is a SEC Chairman, claims he did not consider Bitcoin a security, as the Bitcoin can replace sovereign currencies

 

Bibliography

Huillet, Marie. Senior US Regulator Says Ethereum ‘in Its Present State’ Is Not a Security. Retrieved June 14, 2018, from Cointelegraph: https://cointelegraph.com/news/senior-us-regulator-says-ethereum-in-its-present-state-is-not-a-security\

 

Photograph Retrieved from URL: http://bitejie.net/news/tag/tags-22/page/2

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