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Outgoing SEC Chairman Jay Clayton, who oversaw the rejection of nine Bitcoin ETFs during his tenure, told CNBC that the “inefficiencies” of current payment systems continue to drive Bitcoin’s popularity.
Appearing on CNBC’s Squawk Box yesterday Clayton, who is due to step down by the end of the year, confirmed his agency’s general assessment that Bitcoin was not a security but a payment mechanism and a store of value.
“We determined that bitcoin was not a security, it was much more of a payment mechanism and a stored value,” said Jay Clayton, chairman of the SEC. #btc. “Our current payment mechanisms – have inefficiencies, those inefficiencies are the factors driving the rise of bitcoin.” pic.twitter.com/3r1mxzfgpi
– Squawk Box (@SquawkCNBC) November 19, 2020
The president has been widely criticized by the Bitcoin community for keeping tight control over Bitcoin and cryptocurrency. However, during his years as chairman of the SEC, Clayton was never a strong opponent of Bitcoin in principle, but regularly expressed fears that average investors might be subject to unnecessary risk when investing in a Bitcoin ETF.
This risk is due to the SEC’s perception that the largely unregulated nature of some Bitcoin exchanges makes it too easy to manipulate the price of BTC. With Clayton as SEC chairman, some Bitcoin supporters believe the chance that a Bitcoin ETF will be approved is now greater than ever.
Just in: SEC Chairman Jay Clayton will resign in December.
This is a big deal for crypto regulation.
Clayton’s successor will ultimately approve or deny a Bitcoin ETF.
Hope the new chair includes innovation
– Yano (@JasonYanowitz) November 16, 2020
Clayton believes Bitcoin will continue to grow as regulations evolve.
What we are seeing is that our current payment mechanisms, nationally and internationally, are ineffective. These inefficiencies are the factors behind the rise of Bitcoin … and we’ll see more. We will see this mature and we will see more regulation around the digital payments space.
Clayton was the first member of the SEC to issue a warning about the potential pitfalls of investing in ICOs during the ICO craze of 2017, reminding the public that these products were generally viewed as securities offerings and subject to the regulations that accompanied them.
“We didn’t regulate Bitcoin as security,” Clayton said, explaining that BTC was “much more of a payment mechanism and stored value” than security.
When people use crypto assets as securities to raise capital for a business, the SEC regulates that. And what was going on in the ICO craze was that people were using ICOs and basically bidding on government securities without registering them with the SEC.
Clayton was nominated for the presidency of the SEC by President Donald Trump in January 2017 and is stepping down as one of the agency’s longest-serving presidents. In June 2020, Clayton was appointed by Trump to replace the outgoing United States attorney for the Southern District of New York, a position he says he sought out of a strong desire to continue his career in public service.
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