The former SEC chairman warns that oversight will be implemented both directly and implicitly.
Former SEC Chair Jay Clayton noted that Bitcoin has not been listed as a defence for a long time.
However, in an interview with CNBC’s Squawk Box on March 31, Clayton cautioned that its status as a non-security would not shield it from the imposition of new legislation, which he warned could be enforced soon.
“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,” says Former SEC Chairman Jay Clayton on #bitcoin. pic.twitter.com/voWcgCFqOH
— Squawk Box (@SquawkCNBC) April 1, 2021
Host Andrew Ross Sorkin pointed out that under Clayton’s watch the SEC did not take a position on Bitcoin regulation. Clayton responded that was because the asset was declared not to be a security before he even took up his position as the head of the regulatory body.
“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.”
Clayton has stayed in the business since leaving the SEC in December 2020, and he now advises One River Wealth Management on cryptocurrencies.
While he admits to have little unique insight into what new regulations are on the horizon as a result of his tenure as SEC chairman, he feels the regulatory climate is in need of a shake-up.
“Where digital assets land at the end of the day […] will be driven in part by regulation—both domestic and international—and I expect, and I’m speaking as a citizen now, that regulation will come in this area both directly and indirectly whether it’s through how these are held at banks, security accounts, taxation and the like. We will see this regulatory environment evolve.”
Clayton’s remarks came just a week after billionaire hedge fund manager Ray Dalio cautioned that the United States could outright ban Bitcoin, as it did gold in the 1930s.
His statements on Bitcoin’s role as a non-security are also notable in view of Ripple’s demands to the SEC for documents relating to the agency’s decision that Bitcoin and Ethereum were not securities.
The organisation and its proponents have consistently suggested that XRP is not a defence, but the SEC claims it is dramatically different due to its decentralised existence. Former SEC counsel Marc Powers told Cointelegraph that the SEC is going too far with its investigation into Ripple and its executives.
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