05-15-2018: Ether, Commodity or Security?

A financial regulator at the Consensus cryptocurrency conference commented that the Securities and Exchange Commission (SEC) and other federal agencies should swiftly decide if Ether should be treated as a security or commodity, Brian Quintenz, a commissioner at the Commodity Futures Trading Commission (CFTC), said officials at the agency have been meeting with the SEC about whether Ether falls under the SEC as a security or under the CFTC as a commodity. Quintenz stated “There are a lot of big issues to sort out, we’re sorting them out, but I don’t have a timeline. I wouldn’t say days, but I wouldn’t say months.”

Securities include investments in stocks, bonds, debt and other company interests, while commodities are resources and goods such as oil, gas, coal and agricultural products. Proponents of Ether argue the cryptocurrency should be treated as a commodity, citing the decentralized nature of the network and how it’s held by many different people for different reasons. The CFTC regulates derivatives from commodities, which it says cover cryptocurrencies like Bitcoin. In December, the CFTC allowed Bitcoin to be traded as futures on exchanges run by Cboe Global Markets and CME Group (bitcoinist).

Coinbase announced four major products geared entirely towards facilitating and encouraging institutional investment. Coinbase has partnered with an SEC-regulated broker-dealer to created Coinbase Custody, which the company claims is the most secure cryptocurrency storage solution on the market today. Coinbase Custody is a a service that couples Coinbase’s cryptocurrency security with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer. Some of Coinbase Custody’s launch partners include MetaStable, Autonomous Partners, Polychain Capital, Scalar Capitan, WaldenBridge Capital, and others (coinbase).

The U.S. Attorney for the Southern District of New York announced Monday that the three co-founders of cryptocurrency firm Centra Tech have all been indicted by a grand jury  Raymond Trapani, Sohrab Sharma and Robert Farkas have all been accused of planning to defraud investors through their company’s token sale. The U.S. Attorney further announced that authorities had recovered more than $60 million in funds from the co-founders. All three are being charged with counts of conspiracy and the commission of securities and wire fraud, according to the release. Centra reportedly offered “cryptocurrency-related financial products,” and its founders allegedly created “a scheme to induce victims to invest millions of dollars’ worth of digital funds for the purpose of unregistered securities,” according to the release (coindesk).

Taiwanese electronics maker HTC unveiled the Genesis smartphone, which would serve as both a mobile connecting point to the world of decentralized networks and a storage device for those who want to carry their crypto in their pocket. According to Phil Chen – who previously founded HTC’s Vive virtual reality product line and recently returned to the company to spearhead the Genesis project – the company aims to start distributing the device in short order. HTC is looking to ship by the end of this year (coindesk).

Gemini exchange, the American exchange that is run by the Winklevoss twins, has added a fiat trading pair for Zcash. Josh swihart, Marketing Director for Zcash stated“Exchanges are the #1 on-ramp from fiat to cryptocurrency so to the extent that someone can use USD to safely purchase Zcash in an exchange is good for consumer confidence.” Gemini has had approval from the New York State Department for Financial Services to be able to list the cryptocurrency and will begin trading on the 22nd of this month. This is the 3rd cryptocurrency to be listed on Gemini exchange, behind BTC and ETH (Bitcoin Magazine) (Coindesk).

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