Why Bitcoin Cannot Be Regulated

Why Bitcoin Cannot Be Regulated

SEC Chairman, Jay Clayton recently clarified how cryptocurrencies are seen by the agency, clearly differentiating between cryptocurrencies that can be regulated those that can’t.

There’s been a lot of debate of recent about how cryptocurrencies would be regulated. But a recent interview with the SEC Chief has revealed how the Securities and Exchange Commission views cryptocurrencies. From his statement, it’s clear the agency is only focused on regulating “securities” not “cryptocurrencies.”

Clayton said, “Cryptocurrencies – these are replacements for sovereign currencies,” in an interview with CNBC. He then added that “they replace the dollar, the yen, the euro with bitcoin. That type of currency is not a security.”

In a bid to differentiate one from the other, he explained what securities are.

“A token, a digital asset where I give you my money, and you go off and make a venture – you have some company you want to start… and in return for me giving you my money, you (are given) a return or you can get a return in the secondary market by selling your token to somebody, that is a security, and we regulate that. We regulate the offering 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.”

From his statement, we can deduce that cryptocurrencies that have had ICOs, which have given members of the public an opportunity to invest in their project have fallen under the “Security” category. This means Bitcoin and other cryptocurrencies, coins or tokens, which didn’t have an ICO cannot be regulated.

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Ethereum, on the other hand, had an ICO and from his detailed explanation falls under being a coin that could be regulated. When asked about this, Clayton left himself out of the topic.

That’s a question that is out there and will be answered in the specific facts and circumstances,” he replied.

John McAfee doesn’t seem to be pleased with the explanation Clayton gave. He then challenged the SEC Cheif to a TV debate similar to the one he had with FBI about data privacy.

This seems to be good news for Bitcoin, and for those who are interested in investing in the virtual currency.

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