After some controversies regarding the KIK Initial Coin Offering (ICO), the U.S. Securities and Exchange Commission (SEC), reiterated that Ethereum (ETH) is a usable currency rather than a security. This is very important for the crypto market and the Ethereum ecosystem as a whole.
Ethereum Is A Currency
Cryptocurrencies have yet to be regulated by governmental agencies around the world since there is no unified and clear legal framework to apply to them. Every single day, agencies, financial institutions and governmental agencies take a step forward in this direction but without a clear direction.
In the United States, the SEC determined in the past that Ethereum was not considered security but that most of the ICOs were. Last year, the SEC chairman Jay Clayton, explained that the second largest virtual currency was not considered a security by the regulatory agency.
Now, the SEC has solidified this precedent about Ethereum in a recent lawsuit with KIK, the recognized messaging app that recently launched the KIN virtual currency. The SEC explained that Bitcoin (BTC) and Ether are not securities.
Indeed, the SEC labelled Ether as a usable currency. This is a very important precedent for the crypto market that has been laid out in the lawsuit against KIK. The wording uses US dollars and ether interchangeably as a currency.
The SEC has been taking different steps in order to control the crypto market. Several ICOs have been cracked down by the agency. Back in June 2018, the SEC director William Hinman said that the decentralized structure of Ethereum does not qualify it as a security, and this is something that has just been reiterated in the recent KIK lawsuit.
There are still doubts about other recognized virtual currencies such as XRP. Although XRP supporters and Ripple investors believe that the virtual currency shouldn’t be labelled as a security, there is no official information on the matter about it.
At the moment, the SEC has given green light to Ether to continue operating and working on different solutions as it has been doing during the last years. Meanwhile, users can be sure that they are investing in a recognized digital currency rather than a security.
Currently, Ethereum is being traded around $248. The digital currency has a market cap of $26.41 billion and it remains the second largest crypto in the world.