Jay Claton, the chairman of the Securities and Exchange Commission (SEC) of the US Government, took the limelight at Consensus: Invest Conference - an investor based conference that brings public and expert opinion on a common subject organised by Coindesk. Claton acknowledged that it would not speak directly on issues that are pending with the SEC, but gave an honest and frank insight to his views and understanding of the cryptocurrency tokens.
The conference was held in New York; THE SEC chairman expressed his thoughts regarding digital currencies and their regulation. He went on to say that,
“THIS DISTRIBUTED LEDGER TECHNOLOGY HAS INCREDIBLE PROMISE IN INFRASTRUCTURE BEYOND SECURITIES MARKET LIKE SHIPPING… THE GOVERNMENT CAN ALSO MAKE USE OF DISTRIBUTED LEDGER TECHNOLOGY”
On Bitcoin, he said that there are many agencies including the CFTC (Commodity Futures Trading Commission) that can regulate the things around Bitcoin. However, he also shunned the possibility of Bitcoin being a security because of its decentralisation. He went on to say that,
“IT (BITCOIN) IS AKIN TO YEN, EURO… IT WORKS LIKE A PAYMENT SYSTEM, AND HENCE IT IS NOT A SECURITY
ITS DIFFERENT FROM THE DOLLAR, YEN OR FIAT CURRENCIES BECAUSE IT IS NOT SOVEREIGN BACKED AND IT’S NOT A LIABILITY OF THE BANK. IT IS NOT THE SAME AS SOVEREIGN CURRENCY…”
The SEC chairman also reaffirmed that his priority as securities commission head would be investor confidence and the current exchanges need to regulated because they do not come under sufficient surveillance to deter market manipulation.
On ICOs he mentioned that they are securities even if they have utility as well. This comes in the light of the fact that the ICO public offerings have been left unaccounted by the SEC where in fact, they are securities. Moreover, he also encourages entrepreneurs to contact the divisions at SEC if they want to do an ICO as well. He said,
” LET ME TRY THIS ANALOGY, LET’S SAY YOU’RE A PRODUCER OF A PLAY, AND YOU INVITE 10-15 INVESTORS TO INVEST IN THAT PLAY FOR A CERTAIN AMOUNT OF TICKETS FOR THE PLAY… THAT IS A SECURITY…
WE’RE HAPPY TO ENGAGE WITH ENTREPRENEURS… OR BUSINESS VENTURE FUNDING BY ISSUING TOKENS, YOU SHOULD START WITH THE ASSUMPTION THAT IT IS A SECURITY. “
He also spoke on various other issues regarding centralised cryptocurrencies like Ripple, however, also confirmed that these tokens or currencies could evolve. A security today can become a commodity tomorrow. The exchanges can expect more stringent regulations and surveillance to avoid market manipulation in due time.