Many have heard about people pawning their houses and wealthy, or have lost their life savings when investing in cryptocurrencies. Naturally, this attracted the attention of regulators, including the securities and exchange Commission (SEC), whose President expressed his point of view on the situation.
The head of the SEC, Jay Clayton (Jay Clayton) shared
my thoughts about cryptocurrency and ICO, which are reduced to five main points.
1. No ICO is not registered with the SEC
Currently, the SEC is not registered none of the initial placement of tokens (ICO), which is running now or scheduled to run. Clayton says:
«Investors should understand that to date the SEC has not been registered, no ICO. The SEC has also not yet approved the listing and trading of any exchange-traded products (such as ETFs), or assets associated with cryptocurrencies».
2. The SEC may not always be able to protect investors
Unregulated cryptocurrency market knows no borders and is not officially regulated. Therefore, financial regulators in the U.S. are limited in their actions. If the exchange you use is hacked, or the team behind the ICO, in which you have invested, disappearing with investors ‘ funds, there is a very high probability that the money is lost forever. Clayton explained:
«These markets are easily transcend national borders, and most of the trade may occur in systems and platforms outside the United States. Your investment can travel abroad without your knowledge. The result is increased risks, including the risk that market regulators such as the SEC, will not be able to effectively prosecute criminals or to return your money».
3. Some token-ICO shares
There is a common misconception as to what the ICO tokens are not securities and therefore not subject to the Federal securities laws. But it is not. Clayton says:
«The Commission has applied time-tested principles of securities legislation to demonstrate that a particular token is an investment contract and, therefore, is action in accordance with the Federal securities laws».
4. The SEC is considering cryptocurrency as a currency
In addition, Clayton said that the SEC is not going to stop monitoring the cryptocurrency. On the contrary, the Commission intends to strengthen its focus, considering cryptocurrency as well as the underlying Fiat currency world market:
«It is clear to us that in the same extent that the SEC monitors the transactions in US dollars, euros and Japanese yen and their impact on our securities markets, the Agency is obliged to observe similar operations with cryptocurrencies».
5. SEC believes in cryptocurrencies
One last important point: the SEC is no special claims to bitcoin and other cryptocurrencies. On the contrary, they believe in them as players on wall street. Clayton admits:
«The technology behind cryptocurrency and the ICO, may be revolutionary, innovative and increasing efficiency of financial operations. I am sure that the development in the industry of Finance will help facilitate raising capital and to provide promising investment opportunities for institutional investors and for ordinary people.»