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SEC Chairman: Bitcoin [BTC] is a replacement for sovereign currencies

Priya

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SEC Chairman: Bitcoin [BTC] is a replacement for sovereign currencies
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Jay Clayton, the Chairman of Securities and Exchange Commission [SEC], spoke about the reason behind why Bitcoin is not classified as a security, in an interview with CNBC. He also spoke about the much-awaited Bitcoin ETF and the pre-requisites for its approval.

Clayton started by speaking about the areas wherein the investors are being taken advantage of and the markets the SEC finds a need to act on. According to the Chairman, one of the areas is the Initial Coin Offering [IOC]’s market. The ICOs have been the key focus of the regulators since the beginning of the year with several being cracked down such as EtherDelta, and Paragon Inc.

He also spoke about whether ICOs are definitely a security and about the exemptions. The Chairman began by saying that the technology behind cryptocurrencies, i.e., the distributed ledger technology has an “incredible promise” and that it can drive efficiencies in not just the financial markets but also various other markets.

Clayton further stated that the area in the financial markets wherein the distributed technology is prominent is the cryptocurrency market. He went on to say:

“These are replacements for sovereign currencies, replace the dollar, the yen, the euro with Bitcoin. That type of currency is not a security. Let me turn to what’s a security. A token, a digital asset, where I give you my money and you go off and make a venture, […] and in return […] you say […] I’m going to give you a return or you can get a return in the secondary market by selling your token to somebody.”

He further spoke about the Bitcoin ETF, which has been so far rejected by the commission for various reasons including market manipulation. Clayton stated that the Division of Investment Management has been “very clear” with the cryptocurrency space regarding the pre-requisites for the approval of an asset class product. He added that one of those pre-requisites is the pricing that investors can rely on and asset verification. Clayton went on to say:

“those hurdles are the hurdles that we think the main street investor expects if they’re going to invest in a product. I understand that there’s a great deal of discussion about these crypto assets. But again, we’re not gonna, we’re not gonna relax our wounds based on the level of discussion, we need to know that the pricing”




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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.

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