Jay Clayton, former chairman of the US SEC, commented on the agency’s current treatment of crypto in a call at Bloomberg Invest on June 8.
As of June 5, the US Security and Exchange Commission filed charges against Binance and Coinbase. Bloomberg’s Carol Massar asked Clayton if he would have taken the same actions as current SEC Chairman Gary Gensler.
Clayton responded by saying:
“Look it is [Gensler’s] leadership now. He has held this position for more than two years. … I’m not going to be the person who throws bombs or doubts from the sidelines.
Clayton said he supports the SEC, noting that during his tenure he was known as a “crypto hawk” who stopped the “ICO craze”. That trend took place in the first half of 2018, when initial coin offerings (ICOs) raised a record-breaking $7 billion. Around that time, Clayton stated that ICOs should be regulated like securities.
SEC’s ‘blunt talks’
Clayton told Bloomberg that blockchain, as a new technology, was expected to reform old regulations. But in practice, early blockchain technology broke investor protections — something that shouldn’t have happened, he said.
Despite his previous attempts to regulate the industry, Clayton said regulators are now having “very blunt conversations” about blockchain and cryptocurrency, noting that it is something that is “nuanced” and that applications of blockchain in the financial system “should not be controversial.” are”.
“Real stablecoins”
Clayton then expressed his support for what he called true stablecoins, stating:
“I am remarkably impressed with the functionality of real…stablecoins. Not the algorithmic stablecoin, not the liquidity transformation stablecoin, but a real one [stablecoin] backed by the same with which we support bank accounts.
He said stablecoins are a “remarkable technology” for international retail value transfers. He suggested that compared to paper currencies, stablecoins offer a much greater capacity to comply with KYC/AML regulations.
Clayton has not specified which stablecoins are eligible for this. His co-panelist, Dan Morehead of Pantera Capital, suggested that USDC was proving its support by recovering from a depeg following the collapse of Silicon Valley Bank in March. Clayton did not dispute that point.
Clayton further expressed support for asset tokenization, noting that other countries are engaging in blockchain-based sovereign debt issuance.
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