Ethereum Isn't a Security, SEC Says

This is said by William Hinman, Director of Corporate Finance at SEC, at the All Market Summit: Crypto in San Francisco
15 June 2018   858

The Securities and Exchange Commission of USA (SEC) does not plan to classify Ethereum and bitcoin as securities. This was stated by the director for corporate finance commission William Hinman at the All Market Summit: Crypto in San Francisco, Yahoo Finance reported.

According to the official, if Ethereum and bitcoin were recognized as securities, then, like shares of companies, this would require their registration with the SEC. Nevertheless, Hinmen said, these properties are more characteristic of the product, which, apparently, sends Ethereum to the US Futures Trading Commission (CFTC).

If a cryptocurrency network is sufficiently decentralized and purchasers no longer have expectation of managerial stewardship from a third party, a coin is not a security. Similarly, labeling an investment opportunity as a “coin” or a “token” does not make something not a security.

William Hinman

Director of Corporate Finance, SEC

Earlier head of the SEC Jay Clayton said that bitcoin is not a security.

Constantinople to be Postponed

Ethereum's hardfork will be late due to critical vulnerability found
16 January 2019   180

A scheduled upgrade of the Ethereum network called Constantinople was postponed indefinitely after a critical vulnerability was discovered in one of the improvements, CoinDesk reports.

This is a vulnerability in EIP-1283, which, as identified by the audit company SmartSecurity smart contracts, gave hackers the opportunity to steal user funds.

During a video conference on Tuesday with the participation of Ethereum developers and other clients and projects working on the network, it was decided to temporarily postpone the activation of the hard forks.

In particular, Vitaly Buterin, developers Hudson Jameson, Nick Johnson and Evan van Ness, as well as release manager of Parity Afri Shoedon took part in the meeting. Discussing the revealed vulnerability, they agreed that it would be impossible to eliminate it before the appointed time for hardfork (around 04:00 UTC on January 17).

A vulnerability, called a reentrancy attack, allows an attacker to repeatedly enter the same function and infinitely withdraw funds.

Imagine that my contract has a function which makes a call to another contract… If I’m a hacker and I’m able to trigger function a while the previous function was still executing, I might be able to withdraw funds.

Joanes Espanol

CTO, blockchain analytics firm Amberdata

According to him, this is a lot like the vulnerabilities that were discovered in The DAO in the summer of 2016.

Representatives of ChainSecurity also noted that up to the Constantinople hard fork, data storage on the network cost 5,000 units of gas, which exceeds the 2,300 gas usually needed to call the “transfer” and “send” functions. After the upgrade, “dirty” storage operations will cost 200 units of gas, and an attacking contract can use 2,300 gas to successfully manipulate the variables of vulnerable contracts.

New date of hardfork not yet determined.