Securities and Exchange Commission chairman Jay Clayton recently defended the agency’s regulatory initiatives while acknowledging the legitimacy of initial coin offerings (ICOs) during a talk at Princeton University.
CoinDesk reported that Clayton responded “absolutely not” to a question about whether ICOs are fraudulent, in relation to the agency’s recent regulatory actions against ICOs such as charging Centra Tech’s ICO with fraud.
Sohrab Sharma and Robert Farka of Centra Tech were charged with fraud after they raised $32 million by selling unregistered securities.
Clayton made remarks during his talk at “Cryptocurrency and Initial Coin Offerings.” He made headlines during his last public statements when he said he believes that “every ICO” he has seen qualifies as a security.
Chairman Clayton contended that regulatory steps being taken by the agency could actually help the industry mature.
Clayton said to the attendees:
“Is the approach taken in Washington by the SEC adversely affecting distributed ledger technology in other areas? My quick answer is that my hope is that it’s actually helping – because this technology is being used for fraud and to the extent that it’s being used for fraud, history shows that government comes down harshly on that technology later.”
He continued, “I think if we don’t stop the fraudsters, there is a serious risk that the regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security.”
Currently, cryptocurrency regulations vary state by state and federal plans are not yet clear. However, one certainty is the SEC is not backing away from its plans for ICO regulations, although the Chairman of the SEC hasn’t wavered in his support for the future of blockchain technology.
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