The United States Securities and Exchange Commission (SEC) Chairman, Jay Clayton, recently released a statement concerning exceptions for cryptocurrencies in current securities law. According to Clayton, “[A] lot of people got excited that somehow we would change the rules to accommodate the technology and they invested their time and effort thinking that would happen […] I have been pretty clear from the start, that ain't happening.”
However, Clayton is not against any innovations that cryptocurrencies present, as long as “the basic principles of securities law is not sacrificed.” Furthermore, Clayton does not see all cryptocurrencies as identical, as the SEC has determined many initial coin offerings (ICOs) to be acceptable for securities regulation.
This stance could impact Facebook's Libra, as Clayton believes Libra resembles an exchange-traded fund (ETF), and "if something is like an ETF . . . and operates as an ETF, it should be regulated like an ETF." As many have stated that Libra functions like an ETF, it would require SEC approval before it could be traded.
This stance represents a continued frustration shared among companies that have halted their cryptocurrency plans and services, awaiting potential regulation.
