New regulations for bitcoin according to former SEC official

The fact that bitcoin is not recognised as a security does not mean that it should not be controlled by regulators, according to Jay Clayton.


Mr. Jay Clayton, who has served on the US Securities and Exchange Commission (SEC), says bitcoin and other cryptocurrencies will face more regulatory action in the future.


In an interview with CNBC’s Squawk Box, he said:

I expect regulations in this area to come in both direct and indirect.


Clayton, who recently took over as a cryptocurrency consultant at investment firm One River Asset Management, stated that the fact that bitcoin is not considered a security “does not mean that it should not be regulated.”


In fact, where digital assets are located is largely a broad question, will depend in part on regulations – both domestic and international,” Clayton said, adding, “I speak as a citizen now, I expect regulations to come in this area both directly and indirectly. Whether it is the way they are kept in banks or in bond accounts, for taxation and all that.”


Clayton commented on the question, amid ongoing legal disputes between the US Securities and Exchange Commission (SEC) and Ripple Labs, the company behind the distinctive XRP. The regulator filed a $1.3 billion lawsuit last December (shortly before Clayton resigned from the SEC), claiming that Ripple, as well as executives Brad Garlinghouse and Chris Larsen, had earned hundreds of millions of dollars from illegal XRP sales, dating back to 2013.


The main objection was that XRPs undoubtedly have certain characteristics of securities, but have not been registered as such. At the same time, during Clayton’s term, the SEC had made it clear that neither bitcoin nor Ethereum could be considered securities.


According to a Ripple spokesman, “The SEC clearly selected two winners and ignored a rugged emerging industry that is bigger than both bitcoin and Ether.”