Outgoing SEC chairman Jay Clayton, who oversaw the rejection of nine Bitcoin ETFs during his tenure, told CNBC that “inefficiencies” in current payment systems continue to increase Bitcoin’s popularity.
When Clayton appeared 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 store of value.
“We discovered that Bitcoin is not a security, but rather a payment mechanism and stored value,” said Jay Clayton, chairman of the SEC, on #btc. “Our current payment mechanisms have inefficiencies. These inefficiencies are the factors driving the rise of Bitcoin.” pic.twitter.com/3r1mxzfgpi
– Squawk Box (@SquawkCNBC) November 19, 2020
The chairman has been widely criticized by the bitcoin community for keeping bitcoin and cryptocurrency under control. However, during his years as SEC chairman, Clayton was never, in principle, a staunch opponent of Bitcoin, but regularly voiced his fears that average investors could be exposed to unnecessary risk when investing in a Bitcoin ETF.
This risk stems from the SEC’s view that the largely unregulated nature of some Bitcoin exchanges makes it too easy to manipulate the price of BTC. With Clayton as the SEC chairman, some Bitcoin proponents believe the chance of a Bitcoin ETF getting approved is now greater than ever.
Just in: SEC chairman Jay Clayton will step down in December.
This is a big deal for crypto regulation.
Clayton’s successor will ultimately approve or reject a Bitcoin ETF.
Let’s hope the new chair understands innovation
– Yano (@JasonYanowitz) November 16, 2020
Clayton believes Bitcoin will continue to grow as regulations evolve.
We see that our current payment mechanisms at home and abroad are showing inefficiencies. These inefficiencies are what caused Bitcoin to rise … and we’ll see more of them. We will see this mature, and we will see more regulation in the digital payments space.
Clayton was the first member of the SEC to issue a warning of the potential dangers of ICO investing during the 2017 ICO madness, reminding the public that such products were typically considered securities offerings and are subject to related regulations.
“We didn’t regulate Bitcoin as a security,” Clayton explained that BTC is “much more of a payment mechanism and stored value” than security.
When people use crypto assets as securities to raise capital for a company, the SEC regulates it. And what happened in the ICO craze was that people were using ICOs, essentially offering public securities without registering them with the SEC.
Clayton was nominated for the SEC chairmanship by President Donald Trump in January 2017, leaving the position as one of the agency’s longest-serving chairmen. In June 2020, Clayton was nominated by Trump to succeed the outgoing U.S. attorney for New York’s Southern District, a position he sought out of a strong desire to pursue his civil service career.