United States Securities and Exchanges Commission (SEC) Chairman Jay Clayton confirmed that Ethereum (ETH) and cryptocurrencies like it aren’t securities under U.S. law, non-profit crypto research organization Coin Center reports on March 12.

Citing a letter written by Clayton, Coin Center reports that the SEC staff has found that ETH is not a security under U.S. law.

In September last year, Coin Center worked with U.S. representative Ted Budd to send a co-signed letter to Clayton asking whether he agreed with the approach to ETH of the SEC’s director of corporate finance, William Hinman. As Cointelegraph reported in June last year, Hinman had stated in a speech that ETH “in its present state” — as opposed to during its distribution via initial coin offering (ICO) — won’t be regulated as a security.

In his answer letter, dated March 7, Chairman Clayton noted that he agrees that a digital asset’s definition as a security is “not static” and thus can change over time.

He further stated that a digital asset that starts as a security may see its designation change over time “if the digital asset later is offered and sold in such a way that it will no longer meet that definition.”

Without ever mentioning ETH directly, Clayton stated that he had been asked if he agrees “with certain statements concerning digital tokens in Director Hinman's June 2018 speech.” He replied with a description of how an asset could transition away from being a security:

“I agree with Director Hinman's explanation of how a digital asset transaction may no longer represent an investment contract [a security] if, for example, purchasers would no longer reasonably expect a person or group to carry out the essential managerial or entrepreneurial efforts.”

At the end of last year, Clayton also said that ICOs “can be effective” but that “securities laws must be followed.” More recently, SEC commissioner Hester M. Peirce argued in favor of self-regulation for cryptocurrency markets when possible.