SEC and CFTC Mandarins Cautious Views on Cryptocurrencies


On 4th February 2018, the Chairman of the Securities and Exchange Commission (SEC), Mr Jay Clayton and the Chairman of the Commodity Futures Trading Commission (CFTC), Mr Christopher Giancarion appeared before the Senate Committee on Banking and Finance where they shared their thoughts on cryptocurrencies. This open session provided observers with very valuable glimpse on the thinking of the key regulators in the USA.

While Mr Giancarion expressed a more optimistic note on the value of cryptocurrencies such as allowing the CFTC see into underlying markets and spots market which they would otherwise not have been able, he was very clear on those he said were engaged in “semantic gymnastic or elaborate restructuring exercises in an effort to avoid having a coin be a security are squarely in the crosshairs or our enforcement”,

The chairman of the SEC was more cautious and expressed his doubt on cryptocurrency possible replacement of fiat as a mean of exchange sighting its volatility. He key priority was the protection of the mainstreet investor stressing the SEC effort to inform and warn the small investors on ICOs.

The emerging common thread tying the views of the two gentlemen with their colleagues across the globe is the complexity regulating agencies are grappling with in relations to the emerging disruptive technology and its associated tokens and businesses.

On one hand, as both chairmen shared, regulators are increasingly concerned with the protection of average investor from risks of frauds associated with ICOs and unregulated Exchanges. Their differing prognosis and outlook on where the technology points to the fact that regulators will not be rushing in before they have fully considered understanding of the emerging industry.

Read the full statements of the SEC Chairman Here and the Chairman of the CFCT, Here

Ahmed Ali