Latest U.S. SEC's Views on ICOs
Many of the world's regulators are studying how best to govern ICOs. But most industry insiders know that there is only one regulator in this space that sets the tone on this conversation: the US SEC.
Yesterday, Jay Clayton the Chairman of the US SEC appeared before the House Committee on Financial Services Wednesday, October 4, 2017, to testify on a hearing: “Examining the SEC’s Agenda, Operations, and Budget." He was asked several questions directly on ICOs. Please see video attached below.
Congressman Patrick McHenry asked Clayton to describe the decision making process in regulating the ICO market. In response Clayton replied:
“Here is how to behave well. And here are some things that trouble us...[t]hat was the intent of that … to notify people in this space there is a way to do this right and there are some things that trouble us. If you do it right, we are all for it. If you do it wrong, you are going to have some explaining to do.”
The Congressman then asked Clayton how the SEC will ensure that token issuers are following the SEC's view of ICOs. Clayton replied:
“First ask yourself if it is a security. In most cases it is … whatever exemption works for you, go through that exemption."
McHenry then asked whether Congress needed to pass a law on creating certain exchanges to trade cryptocurrencies. Clayton replied:
“The fair answer is I don’t know enough about how they are going to trade yet to know if we can do it with what we have or if we need your help."
This is a developing area. Will monitor and update accordingly.