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Five important facts about cryptocurrencies from the SEC Chairman


Many have heard of people building their homes and getting rich, or have lost their savings when investing in cryptocurrencies. Naturally, this attracted the attention of regulators, including the Securities and Exchange Commission (SEC), whose chairman expressed his point of view on the situation. Jay Clayton (SEC Chairman) shared his thoughts on the cryptocurrencies and ICO, which are squeezed to five main points.

 1. No one ICO is registered with the SEC

Currently, the SEC does not register any primary location of tokens (ICO), which is currently being launched or is planned to be launched. Clayton notes:

"Investors should understand that to date, no initial coin offerings have been registered with the SEC. The SEC also has not to date approved for listing and trading any exchange-traded products (such as ETFs) holding cryptocurrencies or other assets related to cryptocurrencies."

2. The SEC will not always be able to protect investors

The unregulated market does not know the boundaries and is not officially regulated. Therefore, US financial regulators are limited in their actions. If the exchange you are using is hacked, or the team behind the ICO in which you invested disappears with investor funds, there is a very high probability that money is lost forever. Clayton explained:

"These markets span national borders and significant trading may occur on systems and platforms outside the United States. Your invested funds may quickly travel overseas without your knowledge. As a result, risks can be amplified, including the risk that market regulators such as the SEC may not be able to effectively pursue bad actors or recover funds."

3. Some ICO tokens are shares

There is a common misconception that ICO tokens are not securities and therefore are not subject to federal securities laws. However, it is not. Clayton states:

"The Commission applied long-standing securities law principles to demonstrate that a particular token constituted an investment contract and therefore was a security under our federal securities laws."

4. SEC considers cryptocurrency as currency

In addition, Clayton said that the SEC is not going to stop monitoring of cryptocurrencies. On the contrary, the Commission intends to strengthen its attention by treating cryptocurrencies in the same way as the main fiat currencies of the world market:

"It is clear that just as the SEC has a sharp focus on how U.S. dollar, euro, and Japanese yen transactions affect our securities markets, we have the same interests and responsibilities with respect to cryptocurrencies."

5. SEC believes in cryptocurrency

In addition, the last important thing: the SEC has no particular claims to Bitcoin and other cryptocurrencies. On the contrary, they believe in them, like the players from Wall Street. Clayton admits:

"The technology on which cryptocurrencies and ICOSs are based may prove to be disruptive, transformative and efficiency-enhancing. I am confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and Main Street investors alike."

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