US Corporate Law News: bitcoin and ether are not securities

1 July 2018 | Applicable law: US

The Securities and Exchange Commission's Corporation Finance Director, William Hinman, has provided new guidance on when a digital asset transaction is an "investment contract" under the Howey test. 

On June 14, 2018, Hinman stated that once an asset, like bitcoin or ether, is no longer controlled by a central authority or used primarily to purchase goods or services on a functioning network, it is no longer a "security." This is significant because, although initial coin offerings are believed to constitute securities offerings, tokens sold in such offerings may not always remain securities.

For more information see here.

This article was written with contributions by Tim Moore.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.


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