SEC Chairman Clayton Comments On ETF and ICO Regulations

Wilfred Michael 

Wilfred Michael

News reporter

28 November 2018,
SEC Chairman Clayton Comments On ETF and ICO Regulations

The recent clampdown on ICOs is not expected to end soon after the U.S SEC Chairman; Jay Clayton told CNBC reporters that the regulators’ definition of Initial Coin Offerings ICOs) remain the same and projects who fail to meet up to their requirements will still be considered “non-compliant.”

He was speaking in line with this month’s enforcement action against two ICOs, Paragon and Airforce which included an order for the startups to return funds to investors and register their tokens as securities with the SEC.

Clayton underlined the fact that ICOs should follow a similar pattern (registering) or face enforcement action.

“To the extent that an ICO is being conducted offshore or pursuant to a private placement exemption, fine; to the extent that you’ve conducted a public offering in an ICO, it’s non-compliant,” he said, reiterating a stance maintained by the SEC for a long time now.

The SEC head also pinpointed that Bitcoin is not a security but said about ICOs, “many of the ICOs that you see and talk about – they are securities.”

Moving forward, he failed to reveal when the next batch of enforcement actions would be sent to ICOs, but one can be sure that the SEC will go after ICOs, maybe not yet.


Tight-Lipped Over Bitcoin ETF

For the most of 2018, the crypto community had looked forward to the approval of a Bitcoin Exchange Traded Fund (ETF), so it came as little surprise when reporters queried Jay Clayton on what their stance on the matter is.

Surprisingly, he failed to give a clear-cut answer on whether approval was coming or not. Instead, he told the audience,

“I’m not going to comment on timing or anything like that, but we’ve been clear on some of the issues that are of concern to us.”

Primarily, one of the issues hindering the approval of a Bitcoin ETF according to Clayton includes “whether people who hold those assets (Bitcoin) can count on those assets to be there in the same way you can with other assets that underline ETF”.

In a nutshell, he is suggesting that Bitcoin still lacks some features that could lead them to approve it to exist as an Exchange Traded Fund.  He also mentioned concerns such as what constitutes “trading in bitcoin and whether there is reliable price information on trading markets and as well as custody”.

The crypto industry will now have to wait for the next wave of action from the U.S regulators while hoping that somehow it doesn’t worsen the current market performance in any way.