Ethereum spikes after the SEC declares it's not a security

MI

• Ethereum was trading up over 7% after an official for the US Securities and Exchange Commission said the agency does not view the crypto as a security.
• Such a designation would put the token under the agency's authority.
• Watch Ethereum trade in real time here.

Ethereum spiked Thursday after an official from the US Securities and Exchange Commission said the agency does not view the crypto as a security.

Speaking at Yahoo Finance's All Market Summit, William Hinman, the SEC's director of corporate finance, said the agency does not view bitcoin and ethereum as securities. Such a designation would require certain exchanges facilitating trading of the cryptos to register with the agency. Thursday's announcement was the first time the agency provided regulator clarity on specific coins.

"Based on my understanding of the present state of ether, the Ethereum network and its decentralized structure, current offers and sales of ether are not securities transactions," Hinman said.

Bitcoin has long been viewed by market participants as a commodity, which falls under the auspices of the Commodities and Futures Trading Commission. But it has been less clear whether regulators would deem ethereum, which some view as being more centralized than bitcoin, as a security.

Just last week, SEC head Jay Clayton didn't provide additional clarity during an interview Wednesday with CNBC.

"I'm not going to comment on specific crypto assets and whether they are a security or are not a security," Clayton told CNBC's Bob Pisani.

Crypto watchers, such as trade group Coin Center, cheered Thursday's news.

"With this guidance, the SEC is showing that taking a pro-innovation approach does not have to come at the expense of protecting investors," Coin Center Executive Director Jerry Brito said in a statement.

Ethereum was trading up close to 7% at $512 a coin just before 1 p.m. ET, according to data from Markets Insider.