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Ether doesn’t fall under SEC rules

Is Ether the new bitcoin?

Ether Cryptocurrency Coin
NurPhoto / Getty Images

The price of Ether surged roughly 11 percent to $526 a coin on Thursday after a Securities and Exchange Commission official said the cryptocurrency doesn't have to adhere to the agency's rules.

William Hinman, an SEC director, said the agency doesn't view Ether as a security. The SEC made the determination after deciding the Ethereum network is "sufficiently decentralized," Hinman said at the Yahoo Finance All Markets Summit.

The comments may be reassuring news to digital money investors, who have seen the value of  bitcoin, their favorite cryptocurrency, plunge by more than half amid a series of issues that eroded confidence in the coin. Bitcoin hit a high of roughly $19,000 a coin in December.

Later in December, NiceHash, a cryptocurrency mining marketplace, said it had been hacked to the tune of $62 million, pushing prices lower. Earlier this month, bitcoin prices plunged after hackers stole about 30 percent of the coins traded on South Korean cryptocurrency exchange Coinrail.

"The [Ethereum] Foundation is pleased by the SEC's opinion and statements," said Joseph Schweitzer, external relations lead at Ethereum, in an email statement.

First published on June 14, 3:32 p.m. PT.

Update on June 15, 7:40 a.m. PT: Adds Joseph Schweitzer statement.