Bitcoin(BTC) Not a Security Says SEC Chairman Jay Clayton
Bitcoin (BTC) is not a security since it serves as a replacement for sovereign currencies. Jay Clayton, the chairman of US Securities and Exchange Commission, spoke about the “incredible promise” of distributed ledger technologies propelling efficiencies in markets, clarified during today’s CNBC interview his views on cryptocurrencies like Bitcoin that are “replacements for sovereign currencies:”
Mr. Clayton did not reflect on particular assets besides Bitcoin about their status as securities; he went on to clarify that what he thinks to be securities are tokens that serve as digital assets. He said,” Where I give you my money and you go off and make a venture […], and in return for me giving you my money, you say, ‘You know what, I’m going to give you a return.’ That is a security, and we regulate that. We regulate the offering of that security, and we regulate the trading of that security. Replace the dollar, the yen, the euro with Bitcoin. That type of currency is not a security.”
Clayton added that the SEC won’t recommend altering the definition of a security to strengthen the ICO community, as they are not “going to do any violence to the traditional definition of a security which has worked well for a long time.” The SEC chairman had earlier appreciated blockchain as an example, during February’s SEC and Commodity Futures Trading Commission (CFTC) cryptocurrency hearing. Clayton, then, had remarked that every ICO that the SEC had seen so far would be acknowledged as a security.
— Thomas Lee (@fundstrat) June 6, 2018
Altcoins Ethereum (ETH) and Ripple (XRP) have responded to the cryptocurrency security question. Joseph Lubin of Ethereum flatly denying that ETH was ever a security, and Ripple similarly denying a security connotation. SEC chairman’s statement about Bitcoin should prop up the Bitcoin price. Recently, Ripple CEO termed Bitcoin as Napster of the digital asset.
Bitcoin, of late, has been gaining acceptance globally as compared to its counterparts. South Korean Supreme Court ruled that Bitcoin is an asset. Firms like VanEck and SolidX have collaborated to list a physically-backed Bitcoin ETF that will be insured against loss or theft of Bitcoin. A couple of days ago, Trade Ministry’s Futures Exchange Supervisory Board (Bappebti) had declared that cryptocurrencies like Bitcoin. would be future trading subjects or commodities at the bourse. These developments signal a positive price correction for Bitcoin. Tom Lee, of Fundstrat, is still holding on to his prediction that Bitcoin price might reach the figure of $25,000 by end of 2018.
Image via Bloomberg
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