Former chairman of the U.S. Securities and Exchange Commission, or SEC, Jay Clayton, was appointed by former President Donald Trump to serve in 2017.
During his tenure as head of the SEC, Clayton often defended Bitcoin (BTC) as a store of value. This past Wednesday, during an interview with CNBC’s Squawk Box show, Jay shared his thoughts on cryptocurrency and how it should be regulated going forward.
The former SEC chair said that he is a “huge believer in crypto technology” and that its efficiency advantages in the financial system and tokenization are enormous.
— Squawk Box (@SquawkCNBC) December 15, 2021
Clayton’s remarks come as the current SEC chair, Gary Gensler, recently confirmed that the watchdog has no plans to ban crypto, but that the United States Congress could. Gensler warned, however, that crypto, in its current form, is comparable to the Wild West without proper regulation.
Related: SEC chair doubles down, tells crypto firms ‘come in and talk to us’
When asked whether the present chairperson is creating too many restrictions for the crypto industry, Jay said that cryptocurrencies have numerous purposes and are connected to a variety of industries, and the SEC should be in charge of regulating only those sectors that are linked to it.
“Crypto is a wide variety of products, with a wide variety of functions, and the rules of our financial system are clear and long-standing. If you are raising capital for a project, you have to register your capital raising with SEC. If you are trading securities it has to be on a registered venue, But there are many crypto sectors like stablecoins that are not securities and outside of SEC purview.”
Related: SEC Chair wants robust crypto regulatory regime for the US
According to Clayton, cryptocurrencies should be implemented but with appropriate regulation. He said that the government should be “reactive to people who are violating our well-defined laws but proactive in encouraging the adoption of this technology throughout our financial system.”
Clayton did not allow the approval of a Bitcoin exchange-traded fund (ETF) during his term —that did not occur until 2021 under Gary Gensler. The agency has since come under fire for rejecting spot ETF applications and approving Bitcoin futures ETFs. Grayscale submitted a letter to SEC’s secretary, Vanessa Countryman, in which it stated that “there is no basis for the position that investing in derivatives for an asset is acceptable for investors but not investing in the asset itself.” The SEC was accused of treating the two Bitcoin ETF proposals unequally under the Administrative Protections Act, or APA.