SEC Chairman Jay Clayton says Bitcoin is not a security

Jay Clayton, the SEC Chairman, says he believes that Bitcoin is not a security.

The head of the US Securities and Exchange Commission says Bitcoin is not classed as a security since it acts as an alternative to fiat currencies, according to a report by CNBC.

Speaking about the “incredible promise” of Blockchain technologies driving efficiencies in markets, the SEC chairman called cryptocurrencies “replacements for sovereign currencies,” saying:

“Replace the dollar, the yen, the euro with Bitcoin.

“That type of currency is not a security.”

While Clayton didn’t elaborate on specific digital assets besides Bitcoin regarding their status as securities, he did explain that he considers tokens that act as digital assets to be securities:

“Where I give you my money and you go off and make a venture […] and in return for me giving you my money, you say, ‘You know what, I’m going to give you a return.’

“That is a security, and we regulate that.

“We regulate the offering of that security, and we regulate the trading of that security.”

ICO status seems clear

When asked to clarify whether Initial Coin Offerings (ICO) are securities, Clayton told CNBC’s Bob Pisani, “Bob, I just did.”

Clayton adds that the SEC won’t consider changing the definition of a security to support the ICO community.

The SEC Chairman explains that the “traditional definition of a security has worked well for a long time.”

Mr. Clayton has previously praised Blockchain technology.

During February’s SEC and Commodity Futures Trading Commission (CFTC) cryptocurrency hearing, he spoke positively about distributed ledger tech.

Clayton noted at the time that every ICO that the SEC had looked at so far was considered a security.

Ethereum and Ripple are frequently called into question over whether they could be classed as securities.

Joseph Lubin of Ethereum absolutely denies that ETH was ever a security.

Ripple similarly rejects a security classification.

In other news, a disgruntled investor is launching a class action lawsuit against Ripple over claims that XRP is an unregistered security.

Ripple has appointed a former SEC chair to represent the firm in court.