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SEC Chairman: Bitcoin [BTC] is not a security as it is widely distributed and was not controlled by a single entity

Priya

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SEC Chairman: Bitcoin [BTC] is not a security as it is widely distributed and was not controlled by a single entity
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Jay Clayton, the Chairman of Securities and Exchange Commission, recently spoke about the reasons Bitcoin is not a security and the history behind the commission’s securities law, during an interview with Andrew Ross Sorkin at TimesTalk. He also spoke about the commission’s current stance on the blockchain and cryptocurrency space.

Clayton stated that the securities rules, which is divided into two – offering of sale of securities and trading of securities, have stood through the “test of time very well”. He stated that they were not going to change the rules in order to adopt a new technology, whereas, the technology has to fit the rules, adding that the blockchain technology has incredible promise for adding efficiency to the current marketplace.

He went to speak about the history behind the securities law, stating that it was introduced after the 1929 Wall Street crash. The commission said:

“If you are going out broadly and you are saying to people you don’t know, ‘give me your money, I will give you a stock certificate or an investment contract, a warehouse receipt or a token […]’, you are expecting some kind of return from that based on my efforts. That’s a security and we need to regulate it”

Clayton stated that this kind of an exchange is subjected to abuse and fraud, and that it was one of the reason the securities law was introduced. This was followed by him stating that the people doing a public offering wherein they are raising money from other people are required to go through disclosure rules, provide financial statements and other documents. The Chairman added that they created a $20 trillion economy because of these securities rules.



He further spoke about the reason Bitcoin is not treated as a securities transactions. Clayton stated that the reason is that Bitcoin is widely distributed and that it was not controlled by a single entity or other people. He continued to say:

“It’s used as a medium of exchange, you are not looking at the efforts of others to increase your return and that’s why it looks much more like a currency than a security.”

Succeeding this, the Chairman was asked how it could be differentiated from a commodity. To which, Clayton stated that commodities like gold and silver, usually have a industrial use apart from being a medium of exchange. He said:

“It’s [Bitcoin] like a currency. I mean it doesn’t have a sovereign backing so it’s different from sovereign currency. It’s designed as a medium of exchange “





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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.

Bitcoin

Bitcoin prices hit $150 billion market cap for the first time in 2019 as prices pump by 11%

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Bitcoin prices hits $150 billion market cap for the first time in 2019 as prices pump by 11%
Source: Unsplash

Bitcoin’s parabolic rise that started in April seems to be staggering as the increase in price vs. the number of days it took to increase was surprising, considering the prolonged bear market.

The recent pump on May 27 at 23:30 UTC [+5:30] pumped the price from $7.995 to $8,939 in 7 hours with each green candle forming one after another. However, the price reached a peak at 05:30 UTC [+5:30]. After which the price declined by 2.85%.

Source: TradingView

Moreover, at press time, the market cap of Bitcoin has reached a new high, i.e., $154 billion and the price reaching $8,900 is a new all-time high of Bitcoin in 2019. Bitcoin’s total rise YTD was 146% and in a 24-hour time frame, the price of Bitcoin was up by 8.71%.



Meanwhile, altcoins have also followed suit as Ethereum pumped by 7.21%, XRP by 7%, Bitcoin Cash by 9.53%, Litecoin pumped the most in top 10 as it was up by 11.23% in 24-hours. Tron, the eleventh largest cryptocurrency pumped by 13.84%, at press time.

Anthony Pompliano, a well-known Bitcoin enthusiast tweeted:

“Someone check on @nouriel. Bitcoin seems to be coming back with a vengeance ever since he blocked most of Bitcoin Twitter.”





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