SEC: ICO Tokens To Be Regulated As Securities – And Not Bitcoin

The main role of cryptocurrencies was thrust into the spotlight two days ago at the hearing between the Congress and the US Securities and Exchange Commission (SEC). The hearing was held with the Wall Street regulator on April 26th, and different possibilities were laid out.

The SEC Chairman Jay Clayton was looked as an authority during the event – especially when the topic of cryptocurrencies came into action. One of the congressmen, Chris Stewart, told how his son invested in a cryptocurrency and earned more than his net worth at the moment.
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However, the topic of cryptocurrencies needs regulation, as the congressmen concluded. Without that, “people don’t have the information they need to make good decisions”.

The Chairman Clayton, on the other hand, described the entire cryptocurrency regulation process as a “complicated” one. He divides Bitcoin as a currency and ICOs, as wel as tokens used to finance projects – as entirely different. According to Clayton:

“There are none that I’ve seen that aren’t securities. To the extent something is a security, we should regulate it as a security.”

The tokens later became the focus of the event. Chairman Clayton pointed out that the “Securities regulations are disclosure-based” and that “people should follow these and provide the information required”.

He also recognized the “economic utility and great promise” that cryptocurrencies bring – however policymakers are still torn on how the market should be regulated. As for Bitcoin, Clayton said:

“Our laws didn’t anticipate [cryptocurrencies.] Our laws anticipated sovereign-backed currencies. These currencies are not sovereign-backed. With a sovereign-backed currency, I would argue that the need for regulation to give people comfort is less than it is for something that is not sovereign-backed,”

Representative Stewart, on the other hand, was one of the more-confident people regarding Bitcoin. As he concluded:

“I would like us to lean into this rather than wait for something that gets someone’s attention and then draws upon Congress and others to respond to it when we’re really not prepared,”

Chairman Clayton agreed to this and said that the SEC has been “leaning in” on the issue for some time now.