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The President of the SEC Admits That Not All the ICOs Are Scams

Jay Clayton, the Chairman of the US Securities and Exchange Commission (SEC) defended the initial coin offerings (ICOs) during a discussion held at Princeton University. Clayton pointed out that not all the ICOs were scams and the possible scams could be tackled with adequate regulations, which would also strengthen the cryptocurrency market.

The details of this conference were published by various local news agencies in the United States of America. Clayton said the regulatory measures introduced by the SEC and approved by him personally could bring considerable benefit to the blockchain industry and become its best ally.

In this sense, the Chairman of the SEC also said that despite the recent criminal charges against the founders of the CentraTech platform, Shorah Sharma and Robert Farka, the investigations of the initial coin offering organized by Overstock and the measures taken against the executives of Longfin, the commission does not consider the ICOs to be a fraudulent activity.

Beyond a proactive stance when it come to the ICOs, Clayton pointed out the necessity to tackle the scam models in the cryptocurrency world, but without generating negative consequences for the development of the cryptocurrency sector and the blockchain technology.

When it comes to the ICOs, Clayton explained that one of the main problems is the attempt to classify the token sales as the so-called “ utility tokens”, which is different than the traditional ecosystem. The Chairman of the SEC said: “Is the approach taken in Washington by the SEC adversely affecting distributed ledger technology in other areas? My quick answer is that my hope is that it’s actually helping – because this technology is being used for fraud and to the extent that it’s being used for fraud, history shows that government comes down harshly on that technology later. I think if we don’t stop the fraudsters, there is a serious risk that the regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security.”

Clayton used an example to demonstrate the difference between a utility token and a security token: “If I have a laundry token for washing my clothes, that’s not a security. But if I have a set of 10 laundry tokens and the laundromats are to be developed and those are offered to me as something I can use for the future and I’m buying them because I can sell them to next year’s incoming class, that’s a security. What we find in the regulatory world [is that] the use of a laundry token evolves over time. The use can evolve toward or away from a security. Just because it’s a security today doesn’t mean it’ll be a security tomorrow, and vice-versa.”

 

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