Jay Clayton, former elite bankers’ lawyer now Chairman of the Securities and Exchanges Commission (SEC), has effectively closed the debate on Initial Coin Offerings (ICOs) as far as SEC is concerned in a very brief Questions and Answers session during a Town Hall meeting in Atlanta yesterday.
“Does the SEC have any official position that relates to Blockchain technology because right now, without clear guidance, a lot of new technologies are moving overseas. How will you keep those technologies here in the U.S?”
So asks a member of the audience who said he was from the Blockchain Chamber of Commerce. “Blockchain technology has incredible promise… powerful technology,” Clayton said to then add:
“We’ve been very clear for a long time on how to conduct fundraising when you’re offering securities. Much of what I have seen in the ICO space is a securities offering.
It is raising money for a project where I give you my money, you give me some type of right back that reflects a return on a project, that’s securities offering. I don’t know how much more clear I can be about it.”
Applying a nearly century old act as interpreted by a case in the 1940s, the Chairman effectively said he won’t adapt the law to very new technology and a fast moving innovative space.
“There’s two ways to do it. You can do a private placement or a public offering. We’ve built a 19 trillion dollar economy, an economy that’s the envy of the world, following those rules. I expect people to follow them,” he said.
With that statement, this one way “discussion” now appears to effectively close the non-debate this space had with the unelected government agency. An agency which appears to not appreciate the many differences between a for-profit company and an open source computer program or network.
In response to a member of the audience asking whether SEC plans to do anything about the cumbersome and very complex securities requirements, a somewhat dismissive Clayton said he will be short, adding “yes” in reply. We lack resources, he then added, we have priorities.
So indicating they feel very content with exactly how things are, and although the digital revolution is changing much they appear to think they’re above it all.
Leaving Congress now with the only avenue to change what many find as extremely stifling, or other more friendly jurisdictions, as Silicon Valley might well give way to the Crypto Valley unless they can run fast enough and let Clayton catch up.