On April 26, the US House of Representatives Committee on Appropriations held a hearing with the participation of representatives of the Securities and Exchange Commission (SEC), which dealt with the regulation of the cryptocurrency sector. At the hearing, the SEC Chairman Jay Clayton spoke. This writes CCN.
Congressman Chris Stewart described how his son invested $17 in a cryptocurrency, which he preferred not to mention, but admitted that his son currently has more net assets than his own. However, without proper regulation, “people will not have enough information to make good decisions,” he said, referring to Clayton.
Clayton called the сryptocurrency a “complex area” and narrowed the line between bitcoin as a currency and ICO. According to Clayton, “many people don’t consider bitcoin a valuable paper.”
However, with the tokens used to finance ICO projects, the situation is different.
“I didn’t see a single token that would not be a security,” Clayton said. “And if something is a security, then we should regulate it as a security.”
Currently, regulators focus on these new tokens, and the SEC is waiting for the issuing companies to “grow up”. Clayton also stressed that “the regulation of securities requires disclosure of information,” and added that “people must follow these rules and provide information that the department requires.” When Stewart asked whether the issuing companies were transparent with regard to information about themselves, Clayton, without hesitation, replied “no.”
At the same time, Clayton acknowledged that cryptocurrencies are a “promising” phenomenon with “economic utility”. However, legislators were more interested in how to regulate this area of the economy.
Only in the 1st quarter of 2018 with the help of the ICO was collected 6.3 billion dollars. Clayton said that growth occurs against the backdrop of “the absence of the customary respect for the law that could be expected in financial markets.”
As for bitcoin as a means of payment, it is beyond the competence of the SEC, Clayton said.
“Our laws are not designed for cryptocurrencies. Our laws are designed for sovereignly secured currencies. These currencies are not sovereignly secured,” the SEC chairman said.
Although Stewart seems to want to strengthen the supervision of the cryptocurrency market, he also seeks to avoid an impulsive reaction.
“We have been overdrawn many times when we created regulations at the time of the crisis,” he said, citing Dodd-Frank’s law and the Law on Combating Terrorism as an example.
“I would like to focus on this, rather than wait for something that will attract somebody’s attention, after which Congress and others will take up the matter, and we will not be prepared for it at all,” concluded Stewart.
Chairman Clayton agreed and said that “concentrating” is exactly what the SEC is currently doing.