Ex-SEC Chair discusses Bitcoin’s (non)security position in light of the XRP lawsuit.

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Morgan Stanley filed a number of mutual funds earlier today that could gain exposure to Bitcoin, especially through shares of Grayscale’s Bitcoin Trust or cash-settled futures. Goldman Sachs recently announced plans to begin investment options in the crypto asset class in the second quarter. These recent technologies demonstrate unequivocally that bitcoin is becoming more common.

However, since Bitcoin continues to be making inroads into conventional markets, the issue of what authorities think of new asset groups arises. Many members of the crypto community have voiced frustration about the lack of regulatory transparency so far. The most noticeable of them all has been the Ripple-SEC situation, in which CEO Brad Garlinghouse took every chance to request a “fair playing field.”

Around the same time, the SEC has yet to reveal critical details on how it determined that Bitcoin and Ether were not shares, while Ripple’s native cryptocurrency, XRP, reportedly is.

Former SEC Chairman Jay Clayton recently shared his thoughts about when regulators could decide to take a stance on Bitcoin and other emerging assets. In an interview with CNBC’s Squawk Box, Clayton said:

“Where digital assets land at the end of the day–will be driven in part by regulation both domestic and international, and I expect that regulation will come in this area both directly and indirectly…. Bitcoin was decided to be not a security before the time I got to the SEC. Therefore, the SEC’s jurisdiction over Bitcoin was rather indirect.”

He said that prior to his tenure, Bitcoin was regarded as a non-security, and therefore the SEC’s authority over the commodity was “indirect.” However, Clayton immediately added that this “does not mean it should not be regulated.”

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Clayton went on to clarify the types of regulations that investors should expect:

“Whether it’s through Howey’s, how these [Bitcoin] are held with banks…taxations and the likes, we will see this regulatory environment evolve but it requires many different regulators, [both] domestic and abroad.”


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