“I got a gal who’s always late
Any time we have a date
But I love her
Yes I love her
I’m gonna walk right up to her gate
And see if I can get it straight
‘Cause I want her
I’m gonna ask her
Is you is or is you ain’t my baby”
— B.B. King
“It depends on what the meaning of the word ‘is’ is.”
— Bill Clinton
Coincentral has a recent article by Aaron Mangal that’s worth reading:
We have been following with interest the ongoing emergence of cryptocurrencies with particular emphasis on how people arrive at a sense of trust. As in: Is x a currency or is y not a currency? What is money? Who decides? One aspect of that is to be found in definitions.
Cryptocurrency users were relieved if not overjoyed to hear one of the cardinals of the Securities and Exchange Commission issue a financial ruling that Bitcoin and Ethereum shall not be defined as “securities.”
The definition of this allows them to avoid the heavy(ier)hand of federal oversight and in theory should boost mining, usage and value as well as the far more mercurial concept of faith.
As Mangal puts it:
“The news is sure to bring investors and crypto-anarchists a-like a sight of great relief. Ultimately, this policy resonates with statements from Jay Clayton that Bitcoin is not a security and that the SEC would not change longstanding definition to accommodate it as such.”
But, he then adds:
“Although these statements provide relief and clarity to investors, developers, and crypto-enthusiasts, now the real work in case law begins. While Bitcoin and Ethereum are off the hook, many other ICOs and tokens might not be so lucky.”
Not so lucky indeed and while Bitcoin and Ethereum are defined one way today, who can say what the story will be later. After all consider the escape clause, Director of Corporate Finance, William Hinman embedded in his speech.
“Based on my understanding of the present state of ether, the Ethereum network, and its decentralized structure, current offers and sales of ether are not securities transactions,” Hinman said at Yahoo’s All Market Summit: Crypto in San Francisco.”
Based on my understanding of the present state…
There’s a whole universe contained in those words. We view them as an indication that the current SEC defines the mantra of no-regulation as gospel…for now or at least until the fed decides it needs more tax revenue.
As Bill Clinton put it years ago: “It depends on what the meaning of the word is – is.”
In other words, if Hinman’s understanding were to change, then the definition of Bitcoin and Ehtereum would change.
The SEC giveth and the SEC reserves the right to taketh.