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Do SEC regulations apply to:

  • Exchange of Bitcoin for US dollars
  • Investing in companies with Bitcoin
  • An exchange that sells shares of company stock for Bitcoin
  • Bitcoin futures contracts
4

Is a Bitcoin a security? The SEC hasn't said that it believes it is and not communicated with or taken action, formal or informal, asserting that a miner is issuing securities or that exchanges are engaging as brokers of a security, which is a regulated activity.

Is a Bitcoin an asset or commodity? Does your grocery store need SEC approval to sell bananas? Or, more similarly, does a coin dealer need SEC approval to sell gold and silver bullion?

Now a broker where gold bullion is speculated on is regulated in the U.S., just not by the SEC. The Commodity Futures Trading Commission (CFTC) is the regulatory body that addresses that. To-date, there are no bitcoin-related services offering futures contracts, options, or anything similar which operate from the U.S.

Now issuing shares in a company is exactly the activity the SEC addresses. There are no bitcoin-related services issuing company securities or operating a secondary market for shares that operates from within the U.S. The regulators may still assert jurisdiction though if securities are offered to investors from the U.S.

Now there may be registration requirements for an organization that holds deposits or where an exchange interacts with the banking system they may need to register as a money transmitter, but that is not something under the SEC's purview.

0

That is in the eye of the beholder! Luckily, the SEC itself has let on that they have a view on the issue. I would summarize it as a resounding maybe. Here's my source:

Whether a virtual currency is a security under the federal securities laws, and therefore subject to our regulation, is dependent on the particular facts and circumstances at issue.

SEC Chairman Mary Jo White, in writing, as reported on Bloomberg.

If you'd rather read my summary than go to the source, let me just point out that she went on to explain that lots of finance-like things you might do with virtual currencies would automatically fall under SEC regulations, regardless of whether the virtual currency used for it does or does not by itself.

I believe this letter was in preparation of a US government hearing in November. If I remember correctly, it was reported somewhere that the SEC then took the view that it could regulate Bitcoin, if it wanted to, but I cannot find a source. If you're willing to trust what may be a niche news site, then "[the SEC] made the case that the increasingly popular cryptocurrency, the Bitcoin, was actually a security and should be regulated." (New American article)

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