SEC Chairman, Jay Clayton, is of the view that not all ICOs are bad. This statement came as a reference to the agency’s enforcement actions against the founders of projects that have run into problems with the U.S. Securities laws his agency oversees.
This statement does not come as a surprise. In February, Clayton claimed that every ICO he has come across qualifies as a security. In February, Clayton had testified before a U.S. Senate committee regarding blockchain technology, and in his opening speech, he told the assembled students that blockchain technology offers a promising future for the financial industry. In defense of the distributed ledger technology, the SEC Chairman argued that the steps the agency has undertaken so far are meant to help the industry mature well.
Clayton emphasized the need to curb fraud-related activities within the crypto environment to avoid letting the regulatory actions be so punitive that the creativity of the industry will be stifled.
The SEC Chairman is of the view that if token sales are classified as ‘’utility tokens’’, then they will avoid being designated as security and this will put them out of SEC’s radar. It is this approach that all token sales have taken, yet their full description qualifies them as securities.
According to Clayton, if a startup is offering something that is dependent on the efforts of others, then it should be classified as a security and therefore regulated.
In his closing remarks, Clayton sees the crypto space as dynamic, able to evolve with time. Nations can start by experimenting with sovereign cryptocurrencies while startups may consider developing different kinds applications with the underlying technology.