SEC Won’t Update Securities Framework to Give ICOs Safe Harbor
Clayton clarified that cryptocurrencies which truly act as currencies used for carrying out transactions — such as bitcoin — will not be SEC regulated.
“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.”
However, any currencies which represent an investment in a venture affecting the value of the token are categorically securities according to Clayton, and will be regulated just like any other under SEC jurisdiction. This means big changes in the American and global cryptocurrency markets as exchanges will have to register to deal in those tokens and ICOs or IPOs (initial public offerings) will have to be licensed by 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 any IPO with a token, come see us. File financial statements, file disclosure, take the responsibility our laws require,” he added…