SEC: “Bitcoin is not a security”

The U.S. Securities and Exchange Commission (SEC) has officially reiterated that it does not consider Bitcoin a security.

In a letter to Cipher Technologies Bitcoin Fund dated October 1, the SEC rejected an application to register an investment company on the grounds (among other things) that bitcoin is not a security. According to the letter, Cipher tried to register an “investment company” under the Investment Companies Act of 1940, implying that bitcoin is considered a security.

SEC employees dispute Cipher’s allegations citing digital asset analysis concept published
regulator in April. The letter says:

“We do not believe that current Bitcoin buyers rely on other people’s significant managerial and entrepreneurial efforts to make a profit. Accordingly, since Cipher intends to invest almost all of its assets in Bitcoin in the form in which it is currently structured, it does not meet the definition of assets of an “investment company” according to the Law on Investment Companies. ”

In addition, the SEC noted that if Bitcoin was a security, “it would provoke other significant problems.” More precisely, the cryptocurrency in question would be “an unregistered, publicly offered security, and would potentially make the proposed fund a guarantor of the placement of bitcoins.”

Finally, the regulator noted that Cipher does not properly comply with legal and investor protection standards. The letter concludes that SEC employees “will not conduct an additional Cipher audit.”

Recall that last summer, SEC Chairman Jay Clayton stated that “Bitcoin is a currency, not a security.”