{"id":21990,"date":"2018-06-07T19:23:34","date_gmt":"2018-06-07T19:23:34","guid":{"rendered":"http:\/\/ci027cfe77400d26c3"},"modified":"2018-06-07T19:23:34","modified_gmt":"2018-06-07T19:23:34","slug":"sec-chairman-cryptocurrencies-bitcoin-are-not-securities-most-icos-are","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/sec-chairman-cryptocurrencies-bitcoin-are-not-securities-most-icos-are","title":{"rendered":"SEC Chairman: Cryptocurrencies Like Bitcoin Are Not Securities, but Most ICOs Are"},"content":{"rendered":"
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U.S. Securities and Exchange Commission (SEC) chairman Jay Clayton states that the SEC will not be bending the rules anytime soon when it comes to cryptocurrencies and that while bitcoin remains a commodity<\/a>, all initial coin offering (ICO) tokens \u2014 or coins offered through a fundraising process \u2014 classify as securities.<\/p>\n

\u201cWe are not going to do any violence to the traditional definition of a security that has worked for a long time,\u201d he explained to CNBC<\/a>. \u201cThere\u2019s no need to change the definition. A token, a digital asset, where I give you my money and you go off and make a venture, and in return for giving you my money I say \u2018you can get a return\u2019[;] that is a security and we can regulate that. We regulate the offering of that security and regulate the trading of that security.\u201d <\/p>\n

The fight has been ongoing since April of this year, when the Venture Capital Working Group<\/a> \u2014 an association of lawyers, traders and crypto enthusiasts alike \u2014 gathered to meet with the SEC and assist regulators in viewing virtual currencies as \u201cutility tokens\u201d rather than securities. <\/p>\n

Utility tokens often garner more practical uses than securities and allow customers direct access to a company\u2019s products or services. While utilities are generally exempt from SEC rules, securities, on the other hand, often represent stakes in a company\u2019s offerings. Users can garner capital or profit by investing in securities, which makes them subject to strict regulatory scrutiny. <\/p>\n

One of the biggest questions crypto-investors have had is whether ether \u2014 the world\u2019s second-largest cryptocurrency \u2014 would fall under this category. In its earliest days, ether was originally offered<\/a> as a presale (now ICO) token, but it has since become highly decentralized, which could potentially bar it from \u201csecurity status.\u201d <\/p>\n

Clayton says that contrary to popular belief, the SEC is willing to assist ICOs to enter a plane of legitimacy, granted their organizers are willing to comply with the organization\u2019s rules. <\/p>\n

\u201cIf you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,\u201d he explained. \u201cIf you want to do any IPO with a token, come see us.\u201d <\/p>\n

Nigel Greene \u2014 CEO and founder of the investment firm deVere Group \u2014 says Clayton\u2019s stance on ICOs and cryptocurrencies is a positive sign<\/a> that digital assets are becoming more mainstream. <\/p>\n

\u201cThe SEC is right to insist that the digital coins, such as bitcoin, which are replacement for sovereign currencies, such as the dollar, sterling, yen and euro, are not securities,\u201d he said. \u201cI believe the SEC is also right that tokens \u2014 which [Clayton] did not name \u2014 that act as digital assets are securities. This clarification by the SEC removes some of the uncertainty that has been swirling around the crypto sector and serves to strengthen the overall proposition of many major cryptocurrencies. The SEC\u2019s invaluable and far-sighted work in this area once again highlights how many governments, central banks and regulators around the world are all now recognizing the scale and potential of bitcoin and other cryptocurrencies.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

In an interview with CNBC, Jay Clayton said that while bitcoin remains a commodity, all initial coin offering (ICO) tokens classify as securities.<\/p>\n","protected":false},"author":3479,"featured_media":21991,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[428,2937,2287,1035,183],"class_list":{"0":"post-21990","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-cnbc","9":"tag-devere-group","10":"tag-ico","11":"tag-jay-clayton","12":"tag-sec"},"author_data":{"id":3479,"name":"Nick Marinoff","nicename":"nick-marinoff","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/cropped-bitcoin-schmitcoin-promo-image-1-2-96x96.png"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/sec-chairman-cryptocurrencies-like-bitcoin-are-not-securities.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/21990","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3479"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=21990"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/21990\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/21991"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=21990"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=21990"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=21990"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}