The Chairman of the US Securities and Exchange Commission (SEC), Jay Clayton stated that not all cryptocurrencies are securities, especially bitcoin. While Ethereum and Ripple have been proposed for this category in 2017, the chairman of the SEC, disclosed that bitcoin would fall into a different category.
During an SEC hearing on April 26, Jay Clayton discussed the future regulations for cryptocurrencies and initial coin offerings (ICOs). At the start of the conference, he presented the progress that the Commission has made the past months.
Regarding Bitcoin, Clayton declared that it is a “complicated topic” since there is a multitude of crypto classes. However, he stated that he managed to place bitcoin in the category of “pure medium of exchange” since a currency substitute is not considered to be a security.
If bitcoin would be listed in this category, others could follow. While the SEC announced that ethereum and ripple could be securities, the crypto market contains a lot of coins similar to bitcoin. Litecoin, bitcoin cash, monero, and dash are the most popular.
Regarding tokens, the chairman of the SEC declared that the cryptocurrencies which are not “pure” like bitcoin would be placed in the category of crypto-assets for financing projects.
“I’ve been on the record saying there are very few, there’s none that I’ve seen, tokens that aren’t securities[…]”
“[…] to the extent, something is a security, we should regulate it as a security, and our securities regulations are disclosure-based, and people should follow those and provide the information that we require,” said Clayton.
If the Commission approves Clayton’s proposal and definition for crypto-assets in the future, we will see ethereum and ripple in the securities category.
However, we have to mention that his interpretation is not 100 percent accurate since ethereum did not launch the cryptocurrency with an ICO but with a pre-sale. After the product was launched, the cryptocurrency was distributed through mining; an aspect that disqualifies it because the network became fully decentralized.
Last year the SEC requested for additional funds to hire 100 more employees, reporting that the budget increase would help the regulators to engage better in this ecosystem.