When is a cryptocurrency a security?

When is a cryptocurrency a security? The cryptocurrency industry has been looking for clear guidance from regulators for some time. Recently, SEC Chairman Jay Clayton in an interview with CNBC has clarified this question.

In a CNBC interview, SEC Chairman Jay Clayton was as clear as anyone from the SEC has been to date. While Clayton would not categorically say that Ether is not a security, he did note that digital currencies like Bitcoin are treated as a commodities and do not fall under the aegis of the SEC. Clayton provided helpful guidance to issuers as to when a cryptocurrency is a security:

A token, a digital asset, where I give you money and you go off and start some venture…and in return for giving you my money, you say, You know what? I’m going to give you a return,or you can get a return in a secondary market by selling your token to somebody. That is a security and we regulate that. We regulate the selling of that security and we regulate the trading of that security. That’s our job, and we’ve been doing it for a long time.

This short interview with Clayton is well worth listening to. Those of us in the industry are weighing his words closely.

SEC Boss Jay Clayton Says Cryptocurrency Used to Fundraise & Traded are ALWAYS Securities and Thus Regulated

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Lisa Bragança recovers losses for investors all over the country, protects whistleblowers, and defends individuals and businesses in government investigations. As a Branch Chief with the SEC Division of Enforcement, Lisa investigated a wide range of investment fraud and Wall Street misconduct. Lisa represents investors and participants in the digital asset space.

You can reach Lisa at (847) 906-3460 or Info@SECDefenseAttorney.com. www.SECDefenseAttorney.com

Disclaimer: This information is for general purposes only and should not be interpreted to indicate a certain result will occur in your specific legal situation. The information on this website is not legal advice and does not create an attorney-client relationship.