Jay Clayton, the chairman of the Securities and Exchange Commission (SEC), has told senators that regulators have taken a “measured yet proactive approach” to cryptocurrency regulation, a process that has aided both retail and institutional investors. In written testimony before a hearing in front of the Senate Committee on Banking, Housing, and Urban Affairs, Clayton proclaimed to be “optimistic” on the future of blockchain technology and the opportunity it presented.
SEC Does Clayton’s Talking for Him
Clayton has commented a number of times on cryptocurrencies during his tenure at the top of the SEC tree, most notably back in June 2018 when he posited his belief that cryptocurrencies were intended to be “replacements for sovereign currencies”. However, 2019 has been the year when Clayton seems to have let his agency do the talking for him, with the SEC prosecuting dozens of cryptocurrency companies and projects this year, only being defeated once along the way.
Clayton “Optimistic” Over Distributed Ledger Potential
Clayton alludes to the SEC’s busy year in his testimony, making mention of the “potential violations involving distributed ledger technology” it has prosecuted against, while also praising the agency’s actions against ICOs, particularly Telegram’s ICO which they halted in October:
…these actions reflect the Commission’s commitment to policing these markets vigorously and to taking enforcement action, as appropriate, against those who engage in misconduct related to digital assets that violates the federal securities laws.
Despite the agency’s prosecutorial activities grabbing the headlines, Clayton stated his belief that the agency’s work was helping form a pathway through the morass of securities laws in relation to cryptocurrency to create a framework from which legitimate blockchain projects can work in the future:
As I have previously stated, I am optimistic that developments in distributed ledger technology can help facilitate capital formation, providing promising investment opportunities for both institutional and Main Street investors. Overall, I believe we have taken a measured, yet proactive regulatory approach that both fosters innovation and capital formation while protecting our investors and our markets.
Clayton’s comments are in opposition of ‘Crypto Mom’ Hester Pierce, the SEC commissioner who in May warned that the agency’s “heel dragging” could stifle innovation in the sector. They also seem to be at odds with the facts – the SEC still hasn’t given a clear indication which types of tokens it considers securities and which it doesn’t, leading to innovators leaving the country for more crypto-friendly nations and potentially putting America at risk of falling behind in the forthcoming blockchain race with the likes of China.