Market Rebound Hits Altcoins First; Bitcoin Gets Mixed Messages From SEC
The global crypto market underwent a 6% upswing leading into Tuesday evening, with the majority of the value finding its way to the altcoin market. This looks like just another fluctuation, with the new global high of $126 billion still lower than yesterday’s peak of $131 billion.
SEC Says Bitcoin Is Not a Security
During the conference, Clayton filled revealed the SEC’s stance towards Bitcoin’s possible classification as a security. Judging by Clayton’s words, it appears that crypto enthusiasts are out of the woods as far as securities go:
“Bitcoin is decentralized… It is designed to be a payment system replacement for sovereign currencies. We’ve determined that doesn’t have the attributes of a security…. A far as I am concerned, that’s designed to be akin to the dollar, the yen, the euro… and operates that way… People who purchase it expect it to operate that way. And it’s not centrally created or distributed…”
That takes care of Bitcoin, but Clayton’s further comments on token issuances make the future of the ICO less certain.
Token Issuances Should Be Considered Securities
On the subject of token issuances, Clayton said:
“If what you are doing is starting a venture and you are funding that venture by issuing tokens, you should start with the assumption that you are conducting a securities offering. I think that’s a better way to look at it. Start with that assumption, and say ‘Am I conducting a private placement or am I going to do a public offering?’ I have to understand that comes with significant obligations.”
Bitcoin ETF… Only When Risk Has Been Assessed
Clayton said that the prospect of a Bitcoin ETF would only be truly feasible once the asset has become free from risk and manipulation.
It may surprise crypto enthusiasts to learn that the SEC have very little interest in the technical complexities of Bitcoin. Rather, they simply want it to have the same basic characteristics as other assets they oversee, that is, fiat currencies.
“What investors expect is that the trading in that commodity that is underlying the ETF is trading that makes sense, is free from the risk or significant risk of manipulation… that it’s not going to disappear, that the risk in the ETF is truly the risk in the value of the underlying asset, it’s not the risk of theft or disappearance.
The SEC have stated in the past that comments made by commission members at external events are not to be taken as official pronouncements. That said, Chairman Clayton appeared to be speaking quite freely and openly, and one would expect his comments to hold true.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.