According to former SEC Chairman Jay Clayton, cryptocurrencies perform a number of roles and are associated with a variety of sectors, and the SEC should regulate just those industries.
Jay Clayton, a former Securities and Exchange Commission, or SEC, chairman, was nominated to the post in 2017 by former President Donald Trump.
Throughout his tenure as chairman of the SEC, Clayton consistently defended Bitcoin (BTC) as a store of value. Jay addressed bitcoin and how it should be regulated in the future during a Wednesday visit on CNBC’s Squawk Box.
According to the former SEC head, he is a “big believer in crypto technology” and believes that the advantages of its efficiency in the financial industry and tokenization are unfathomable.
Clayton posted on Twitter: “I am a staunch supporter of this technique. The efficiency gains from tokenization in the banking sector and elsewhere are enormous.”
Clayton’s remarks come after the current SEC chairman, Gary Gensler, warned recently that although the watchdog has no plans to prohibit cryptocurrencies, Congress may do so. Gensler emphasized, however, that bitcoin in its present shape is analogous to the wild west in the absence of adequate regulation.
When asked if the current chairwoman is placing too many restrictions on the cryptocurrency business, Jay said that cryptocurrencies serve a variety of functions and are associated with a variety of industries, and the SEC should regulate just those industries.
“Crypto is a diverse range of goods with a diverse range of activities, and the laws governing our financial system are well-defined and well-established. If you are raising cash for a project, you must register with the Securities and Exchange Commission. If you are trading securities, you must do it on a recognised exchange. However, certain crypto sectors, such as stablecoins, are not securities and hence fall beyond the SEC’s jurisdiction.”
The Federal Government Should Regulate Cryptocurrency Appropriately
According to Clayton, cryptocurrency should be permitted, but with sufficient regulation. According to him, the government should be “reactive to those who violate our well-defined regulations, but proactive in pushing the use of this technology throughout our financial system.”
A Bitcoin ETF was not authorized under Clayton’s tenure, but will now be approved in 2021 under Gary Gensler. Since then, the SEC has been lambasted for rejecting applications for spot ETFs while approving applications for Bitcoin futures ETFs. “There is no foundation for the notion that investing in derivatives for an asset is appropriate for investors but not in the asset itself,” Grayscale said in a letter to SEC chairwoman Vanessa Countryman. The SEC was accused of handling the two Bitcoin ETF proposals unequally under the Administrative Procedures Act, or APA.
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