The sec will not be making any changes to the securities rules for tokens that represent the value of a project or for the majority of initial coin offerings (ICOs) noted SEC Chief Jay Clayton asking several unanswered questions, adding that a majority of ICOs are selling securities.
Clayton expressed that the SEC will not be updating securities framework to provide ICOs with allowances. He confirmed that cryptocurrencies that actually act as currencies used to conduct transfers will not be controlled by the SEC.
“Cryptocurrencies: These are replacements for sovereign currencies, replace the dollar, the euro, the yen with bitcoin,” Clayton said. “That type of currency is not a security.”
Yet according to Clayton, any currencies which represent an investment in a venture impacting the value of the token are simply securities and will be controlled similarly to any other under SEC jurisdiction. This is to say, any significant change in the American and international cryptocurrency markets as exchanges will have to register to operate in those tokens and ICOs or IPOs (initial public offerings) will have to receive a license from the SEC.
“A digital asset where I give you my money and you go off and start a venture, and in return for giving you my money you say you know what, I’m going to give you a return, or you can get a return on the secondary market by selling your token to somebody – that is a security, and we regulate that. We regulate the offering of that security, and we regulate the selling of that security.”
“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules. If you want to do an IPO with a token, come to see us. File financial statements, file disclosure, take the responsibility our laws require,” he added.
Clayton noted that he will not alter the nature of securities to accept the new technology. He did not give any comment on altcoins regarding whether they are securities or not but cited its definition saying anything signifying a growing asset or the value of a project will remain to be considered a security.
Even though he responded to several questions raised during the segment, Clayton did not respond to any question regarding regulation of projects which started out selling securities but later changed to decentralized projects with no leadership.
“That’s a question that is out there and will be answered under specific facts and circumstances, but we’ve been doing this a long time and there’s no need to change our fundamental approach,” he concluded.