The 6 Big Takeaways From SEC Chair Clayton’s Crypto Remarks
The SEC's chairman, Jay Clayton, was swirling the next day, a few months and a few years later, when the US regulatory authorities narrowed down the implications of what they could do in cryptographic space.
Clayton chatted on the sidewalk in front of a packed room at CoinDesk's Consensus: Invest event in Manhattan yesterday afternoon.
And Clayton made it clear that he had a lot of thought about cryptocurrency in the past year, but he still read a lot about the idea of an exchange ecosystem and the issue when ICO-extracted tokens are considered securities.
Following the conversation on stage, three long-time experts in cryptography dissected the nuances of what Clayton said during taping on CoinDesk Live (see below). We joined Caitlin Long of the Wyoming Blockchain Coalition. Stephen Palley of Anderson Kill, Lewis Cohen, DLx Act.
While this panel of experts covered a variety of topics, there were a few key takeaways to be collected from Clayton's story. What they say is:
1. There is no bit coin ETF at any time.
First of all, the Securities and Exchange Commission is unlikely to open a bitcoin exchange-traded fund any time soon.
"I know there are a lot of people who want the ETF to be approved, but I do not think it is likely to do so," Long said.
She pointed to two obstacles to the stock exchange, custodial assets and custody of third parties on market manipulation.
In detention, Long criticized the rule itself, saying, "If all the assets are actually in a block chain, I think there is a real question as to whether a custodian is needed."
2. Regulated exchange is required.
Clayton has made it very clear that he does not trust existing password exchanges to prevent price manipulation.
The panel seemed to suggest that there was a move by Clayton, the chairman of the New York Stock Exchange, Jeff Sprecher, to point out that a panelist who was mentioned earlier could bring bit coins to the regulatory exchange.
Cohen, however, said Bitcoin was a "beast," and the regulators insisted it would not be hard to tame.
Clayton also made it clear that anti-money laundering devices must be installed for password transactions to tamper with passwords.
Pali wondered what it means today for the implications of active private investors in the market.
"My question is this," Palley said. "There are a lot of institutional funds, if you regulate it and monitor the market, will retail profit stay the same?"
If she borrowed the term for Andreas Antonopoulos, Long described it as the future of "CorpoCoin."
"If this is too organized, what will happen, the encryption community will just be forked off."
4. ICO funded start-up is SEC, as soon as possible
Clayton repeatedly stressed his story, and Cohen insisted that a Crypto start-up company, funded in 2017 and 2018, should now appear in regulatory authorities.
Cohen quotes Clayton saying, "People who come to see us can do one transaction, and people we find can do other transactions."
Earlier this month, the SEC issued its first civil penalty for two startups that did not properly register their securities offerings.
Palley said that using these "templates" the SEC is getting ready to move much faster in ICO.
5. No action for "No action" character
One of Clayton's messages from the stage is that the door of the SEC is open to start-ups working in the industry, especially those issuing their own tokens. To this end, government agencies have recently launched a new fintech-focused department with the explicit goal of facilitating communication with ICO startups.
The Panel is in this space what the startup wants to do is a so-called "no action" letter (a letter confirming that the SEC will not move against a company based on the business model).
The letter has been expected for a long time, but Long says it has not received a start-up.
"If that's what 19459002 is what we want," she said, "the US is already behind and we are far behind to get a letter that people have taken no action."
6. Courts may view ICO differently.
There is another area where regulators can already judge the feasibility of a new funding mechanism for block-start-ups.
Palley asked, "What will the court do when it begins to parse token sales?" In fact, it has already begun.
Pali said he would look at the US Supreme Court once in ten years (perhaps even less).
In general, Clayton found that the SEC is willing to help US cryptographic start-ups find ways to comply with the law, but the panel of regulatory experts has proven that this is actually much more difficult and costly than the chairman.
Click the link below to view CoinDesk LIVE full panel.
#CoinDeskLIVE #ConsensusInvest Unraveling Jay Clayton's views at https://t.co/YyiF2Ah2Qo.
– CoinDesk (@coindesk) November 27, 2018
Photos of Noelle Acheson
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