SEC Internal Deliberations on Ethereum: Hinman Email Hints at Exclusion

• Hinman’s email highlights SEC’s selective regulation, raising fairness concerns.
• SEC’s Ether stance involved top officials, suggesting a high-level regulatory decision.
• Ether’s non-security status provided it regulatory freedom, unlike other cryptos.

The SEC’s internal deliberations over cryptocurrency regulation have come under the banner from an email sent by William Hinman, former Director of the Division of Corporation Finance. Dated June 4, 2018, the email, titled “Ether speech,” shows a selective approach by the SEC, raising concerns about potential favoritism.

The email reveals the SEC’s desire to exclude Ether (ETH) from securities regulation while remaining ambiguous about other cryptocurrencies. Hinman stated in his email that he planned to publicly clarify Ether’s regulatory status.

This approach to crypto regulation raises questions about the SEC’s inconsistent treatment of digital assets, especially given the lack of clarity provided for other cryptocurrencies.

Hinman’s Email and Ether’s Securities Exclusion

Hinman’s email provides insight into the SEC’s plans to officially clarify Ether’s regulatory status. The draft of his speech, included as an attachment, argued that Ether did not require regulation as a security at the time. This distinction proved crucial for Ethereum, as it allowed the platform and its cryptocurrency to operate with fewer regulatory constraints.

Additionally, Hinman scheduled a call with Vitalik Buterin, Ethereum’s co-founder, to gain a better understanding of Ethereum’s structure and operations. This interaction suggests that the SEC took considerable steps to understand Ether’s background before publicly declaring it outside the securities classification.

Internal SEC Communication on Ether’s Regulation

Hinman sent the email to several senior SEC officials, including Lucas Moskowitz, Sean Memon, Raquel Fox, Brett Redfearn, and Dalia Blass, as well as other colleagues involved in the SEC’s corporate finance division.

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He asked for feedback on the draft, inviting comments and ideas from these high-ranking officials. The email also stated that relevant language about Ether’s status appeared within the draft, showing transparency within the SEC on how it planned to treat Ether. The involvement of multiple senior officials reveals that Ether’s exclusion from securities classification was a high-level decision, not a casual or isolated opinion.

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