SEC Chairman Trying to Find A Way Forward for Crypto and Securities Markets


For quite a while now, the U.S. Securities and Exchange Commission has been wrestling with how to deal with Initial Coin Offerings, and cryptocurrencies in general.

Today, William Suberg at Cointelegraph is reporting on remarks made by SEC Chairman Jay Clayton a few days ago at a Washington conference.

“Speaking at the SEC Speaks conference in Washington, chairman Jay Clayton highlighted the digital currency space while giving a broad overview of the organization’s activities and roles,” Suberg wrote. “Clayton chose to touch principally on instances where existing laws had been used to deal with noncompliance from crypto entities.”

The gist of Clayton’s remarks seems to be positive, as Suberg quotes:

In the digital assets space, […] the Division of Enforcement has brought cases that demonstrate that there is a path to compliance with the federal securities laws going forward, even where issuers have conducted an illegal unregistered offering of digital asset securities,… “This path includes appropriate disclosures to investors so they can make a more informed decision as to whether to seek reimbursement or continue to hold their tokens.”

Going over what he called “a persisting commitment to crypto and its impact on areas such as securities regulations,” Suberg described U.S. regulators, in his words, “taking slow but comprehensive steps to formalize status …at the national level.”

The issue of cryptocurrencies as securities goes back several years to the origin of these digital assets and their first treatment by regulators like the SEC.

“I believe that initial coin offerings – whether they represent offerings of securities or not – can be effective ways for entrepreneurs and others to raise funding, including for innovative projects,” Clayton wrote in a public statement archived at the SEC in December of 2017. “ However, any such activity that involves an offering of securities must be accompanied by the important disclosures, processes and other investor protections that our securities laws require.”

Elaborating on the nature of crypto assets, Clayton made the disclaimer that a certain consistency works in the philosophies of regulators.

“Replacing a traditional corporate interest recorded in a central ledger with an enterprise interest recorded through a blockchain entry on a distributed ledger may change the form of the transaction, but it does not change the substance,” Clayton wrote.

Keep an eye on news coming out of the SEC to see how the body will treat crypto this year, whether that means formalizing securities rules, or greenlighting the much-awaited Bitcoin ETF.