As the United States government begins to crack down on ICOs, the head of the Division of Corporation Finance at the Security and Exchange Commission (SEC) doesn’t believe ether (ETH) should be classified as a security.

While speaking at the Yahoo Finance All Markets Summit: Crypto, William Hinman stated that ether is not the type of centralized actor that characterizes securities offerings and that it is unlikely that the SEC will look to regulate it in such a way.

When we think about how ether today is operating, at least, we see a highly decentralized network…In its current state, we don’t see value regulating it.

Last month, the Wall Street Journal reported that US regulators are currently examining whether ether and similar cryptocurrencies are securities under federal law. The piece focused on a recent speech by Gary Gensler, former chairman of the Commodity Futures Trading Commission (CFTC), in which he opined that ETH and Ripple (XRP) are unregistered securities. The article suggests that the SEC is conflicted about the determination of Ether’s legal status.

The ongoing debate’s fundamental question is whether Ethereum (ether) passes the Howey test. This test, named after a 1946 Supreme Court decision involving orange groves, decides whether an instrument qualifies as an investment contract. It defines an investment contract under securities law as a contract that involves an investment of money from an expectation of profits arising from a common enterprise depending only on the efforts of a promoter or third party.

While the latest statement by Hinman suggests that the SEC is likely not considering ether under securities regulations, the token sales that occur on the Ethereum blockchain infrastructure are certainly under scrutiny.

Time will tell whether this was just a passing remark or the official position of the SEC.