Unsealed SEC internal discussion documents reveal that by asserting that Ether is not a security, Hinman ran the risk of contradicting himself.
According to recently made public records, Bill Hinman, a former director of the SEC, had his 2018 speech edited to remove references to Ether (ETH) being a security. According to the records that have been modified, the agency was wary of taking a stand that would be hard to reverse.
The internal SEC communications are related to Hinman’s speech, in which he said that while cryptocurrencies like Bitcoin and Ethereum might begin as securities, as they become more decentralized, they might eventually transform into commodities.
These documents’ release coincides with a turbulent period for the cryptocurrency market. A federal judge will review the SEC’s request to freeze Binance’s assets on June 13.US after a number of legal measures were taken against the exchange.
The modified documents provided insight into how regulatory judgments involving cryptocurrencies have evolved, particularly regarding their initial classification as securities and the possibility of reclassification.
Attention has been attracted to the SEC’s position on Ether and its ramifications for the overall crypto market since they could alter the regulatory environment and affect choices in the future regarding whether to treat cryptocurrencies as securities or commodities.
The worries expressed in the revised documents show that the SEC is aware of the need to carefully navigate the developing world of cryptocurrencies and avoid taking fixed stances that would limit future regulatory flexibility.
These disclosures provide insight on the difficulties in regulating cryptocurrencies and the current debates inside regulatory organizations about how to classify them and regulate them.