The SEC Would Publish A Guide To Help Crypto Startups Understand Cryptocurrencies Classification

The director of Corporate Finance of the US Securities and Exchange Commission (SEC), William Hinman, announced the intention of the Commission to publish a guide on the classification of cryptocurrencies to facilitate the work of entrepreneurs to identify if digital assets behave as values and when they do not.

Hinman announced on November 5th, during the DC Fintech Week conference, which will be held until November 8 in Washington. He explained that the purpose of publishing this guide is to provide developers of Initial Coin Offerings (ICOs) with sufficient information to help them identify the classification of their tokens.

Although William Hinman did not give details about the date the guide will come out, he said the idea is to develop a material with simple language that would allow crypto token issuers to understand how the SEC makes the classifications. In that regard, Hinman said that among the essential considerations in determining whether or not a crypto token is a value, is the factor related to expectations of return on investment.

The US SEC Would Publish A Guide To Help Crypto Startups Understand Cryptocurrencies Classification

“If someone is offering an instrument for money or other consideration to a third party, and that third party expects the bidder to generate a return or something that will increase the value of the currency or token, or whatever it is they want to call, and there is that expectation of return, we will generally see that as an offer of securities,” explained William Hinman, Director of Corporate Finance at the US Securities and Exchange Commission (SEC).

Hinman also advised crypto companies to consult with the Strategic Center for Financial Innovation and Technology (FinHub), launched by the agency last October. Both the guide and the FinHub are part of the SEC strategy to guide startups in the development of their ventures, an action that has also been accompanied by a series of pressures to regulate the cryptocurrency market and prevent fraud with cryptocurrencies.

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