The chairman of the United States Securities and Exchange Commission (SEC) – Jay Clayton said that bitcoin is not a security due to the fact that it serves as a replacement for sovereign currencies and because it is a decentralized asset.
Clayton, when talking about the “fascinating promising” of DLTs (Decentralized Ledger Technologies) driving efficiencies in the markets, clarified his thoughts on digital currencies that serve as replacements for sovereign currencies – he clarified this during an interview with CNBC earlier this month.
Mr. Clayton said: “a digital currency (Bitcoin) that can replace the euro, dollar, yen, is not security.” He said based on how the network is built coupled with its decentralized structure, Bitcoin is not a security. While he did not talk about other digital currencies or Initial Coin Offerings apart from Bitcoin (BTC) regarding their securities status, he went ahead to explain that what he believes to be securities are digital currencies or ICOs that act as digital assets.
When Clayton was asked by the interviewer at CNBC – Bob Pisani to make his statement clear on whether ICOs are securities, Clayton said it is when you give your money to an enterprise and they go off and make a venture with it, and in return for giving them your money, all they say to you is that “they will give you a return.”
SEC Rules Are Stricter
He further stated that the SEC will not support altering the meaning of a security just to favor the Initial Coin Offering community, as they aren’t “going to do any violence in the conventional meaning of a security which has been doing just fine over the years.”
The chairman of the US SEC had previously commended distributed ledger technology during the SEC and Commodity Futures Trading commission digital currency hearing back in February this year. At that time, the chairman (Clayton) noted that every Initial Coin Offering that’s been seen by the SEC so far would be considered as a security.
Ripple and Ethereum were also up for questioning, but Ethereum has also been declared a non-security asset earlier today.