President of the SEC: investors should consider the lack of “safeguards” before investing in cryptocurrencies

The chairman of the Securities and Exchange Commission of EE. UU ( SEC ), Jay Clayton, reiterated his cautious vision regarding the crypt markets during an interview. His discussion with New York Times columnist Andrew Ross Sorkin took place at The Times Center in New York City on November 29. Halfway through the interview, Clayton told Sorkin that the securities regulator had worked hard to educate investors about the risks.

Participating in an emerging and unpredictable market for which regulation is still taking shape, can because of concern. While expressing his concerns, Clayton continued regarding how they try to get the word out that, even if the crypto-trading is similar to the trading that would be seen on Nasdaq or the New York Stock Exchange, still these markets do not have the same types of safeguards for investors.

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Clayton added how they worked during seventy years to try to avoid manipulation in those [traditional] markets, to try to prevent people from taking advantage of the small investor.
The president also acknowledged the limitations facing the regulator in the context of the sales of tokens abroad.

He noted that he has “tried to make it clear” that if investors buy digital assets from the countries abroad, in case something goes wrong, “Very little [the SEC] can do to recover them as a practical matter.” The interview went from the action of the market to the mere structure and innovation of the technology that supports most of the digital assets, blockchain.

In response to Sorkin’s point that the ideology of the cornerstone of an ecosystem based on blockchain is that it has “no real arbitrator.” Neither judge nor jury, Clayton implied that this principle was at variance with existing regulations.

Clayton Unwilling to change the traditional definition of value

In comments after the interview in the “Squawk Box” segment of CNBC, Sorkin reflected on his views on the situation. He had previously hoped that the “next turning point” for the cryptocurrency was a form of “positive regulation” by the government regulator. However, he now felt that it was unlikely that the SEC would change its position to adapt and “work with” the emerging space.

Clayton’s effective observation, argued Sorkin, was rather that “cryptocurrencies would have to change their technology to work with the law.” In another interview earlier this week, Clayton emphasized the SEC’s hardline stance on digital tokens that are considered securities offers that “do not meet” – that is, not registered with the agency.

Clayton has previously stated that, while cryptocurrencies that purport to act as “sovereign currency replacements” – especially Bitcoin (BTC) are not securities, most are sold through the Initial Coin Offers (ICO). He also emphasized that the agency would not “harm the traditional definition of value” to accommodate the new sector.

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