Former US SEC Chairman Jay Clinton Says Bitcoin Will Soon be Regulated
Former Chairman of US Securities and Exchange Commission, Jay Clayton, has clarified that although the government has not categorized Bitcoin as a security, there will soon be direct and indirect ways of regulating the leading cryptocurrency. While addressing Squawk Box’s stakeholders, a CNBC program on Wednesday, Clayton said, despite not been classified as a security, Bitcoin and other cryptocurrencies have not yet escaped the regulatory scrutiny, which should be expected any moment.
Meanwhile, the program’s host, Andrew Sorkin, explained that during Clinton’s term, the SEC had not yet taken a definite stance on Bitcoin regulation. But Clayton replied that during his reign as the SEC chair, Bitcoin was not categorized as security even before he assumed his position. He added that the SEC had only limited jurisdiction regarding the regulation of Bitcoin because of the above reason.
Regulations will determine where digital assets are heading, says Clayton
Having left the SEC chairmanship position, Clayton joined the crypto community in 2020 and is now an adviser to One River Asset Mgt cryptos.
While he claims that he is not privy to the details of the new law that will be made on Bitcoin, he suggests that this is the time for the regulatory body’s overhaul.
“Regulation will determine where digital assets are heading to, both local and international,” he stated, adding that he expected, as a US citizen, that the government will regulate either directly or indirectly ways Bitcoins are held, used as securities, or even as taxation. “We will soon witness the evolution of the regulatory environment,” he maintained. Clayton’s remarks are coming a few days after Ray Dalio, a billionaire hedge fund manager, said that the US might prohibit Bitcoin transactions in a similar way that they placed an embargo on gold in the 30’s.
Besides, Clayton’s remarks on Bitcoin as a non-security asset are coming when Ripple is asking the SEC to present it with documents that made it conclude that Bitcoin and Ethereum were no securities. Ripples and its promoters have often claimed that XRP is a no security, but the SEC insists that it is relatively different. In a statement made available to reporters by former SEC attorney Mark Powera, the SEC is going into extremes with his lawsuits against Ripple and its management.
The crypto world is international, making it difficult to ban
Meanwhile, Bloomberg published an article in January on whether it was imperative to ban cryptocurrency or not. The site referred to Janet Yellen, the Treasury Secretary’s confirmation hearing, when he noted that people use cryptocurrencies “mainly for illegal financing,” She deemed it fit to regulate the digital assets. Her submission, despite inferring that the government still needed to encourage the citizens to use cryptos, was explicit that there was a need to enforce strict regulations on the crypto industry.
Hence, such statements could be regarded as proposed regulations and the that are now being looked at to ensure transfers from wallets are reported and monitored. But the problem is that most aspects of cryptocurrencies are difficult to regulate. The contents of blockchains, which are abstract ledgers, are not accessible for governments to control. Besides, the crypto world is global and never depends on any US regulatory body or government. This is, indeed, a vital feature of the crypto world. But a better alternative will be to integrate the crypto world into the banking system.