On Tuesday, during a hearing before the U.S. Senate, the chair of the Securities and Exchange Commission (SEC), Jay Clayton, said his agency should join forces with federal banking regulators and other agencies to ensure that the trading of cryptocurrencies is better “coordinated”.
Clayton urged even states to join the effort. On Tuesday, he and the head of the Commodity Futures Trading Commission, J. Christopher Giancarlo, testified before a Senate panel about the risks of bitcoin and other digital tokens.
The hearing was scheduled weeks after the virtual coins’ popularity boomed, with bitcoin reaching record values overnight. Virtual coins follow the CFTC’s rules, which considers them commodities. But the markets they are currently being traded on lack regulation.
SEC Chair Blasts ICOs, Wants Them to Be Regulated
The SEC chairman also promised to look into the controversial initial coin offerings (ICOs), which are fundraising campaigns released by companies. Clayton believes most of these digital coins are securities, so the SEC should take care of them.
From what I’ve seen, initial coin offerings are securities offerings,
the SEC boss said.
Clayton added that ICOs are acting just like bonds and shares, but “under a new label”. He unveiled that many ICOs infringe securities laws which makes them illegal despite supporters claims that the laws are not clear enough. “I don’t buy that for a moment,” Clayton told lawmakers.
It is the first time the SEC chief becomes so critical of the virtual coins. His agency is trying to regulate ICOs since it perceives them as securities. Nevertheless, he wants other regulators to join the effort.
Clayton also explained on Tuesday why the commission refuses to approve the exchange-traded funds (ETFs) that are based on virtual tokens. ETFs would enable individuals to invest in the commodities without owning any of them.
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