The U.S. Securities and Exchange Commission Chairman Jay Clayton spoke at Stanford University’s Stanford Rock Center for Corporate Governance and discussed his first eight months at the SEC and his enforcement, examination, market, and capital formation priorities. His comments on cryptocurriences were revealing.
SEC is clearly monitoring Initial Coin Offers (ICO) , and is concerned about the lack of protection for investors. There is significant risk of price manipulation, yet the underlying blockchain technologies offer significant opportunity.
“What I see happening in the ICO market today is ‘let me have all of the disclosure freedom of a private placement and all of the secondary activity and ability to market this of a public offering. We decided in 1934: that [having both of these at once] led to a lot of problems.”
“I think we can say that wherever the date is, it’s passed,” he said when asked whether his commission has made ICO rules clear enough yet.
“There are a lot of protections in the way stock trades on exchanges… these platforms that you’re seeing where people are trading cryptocurrencies — there are none of these rules… The opportunity for price manipulation is at orders of magnitude.”
“Blockchain, distributed ledger tech — I don’t think any of us think it’s a fad… it clearly has a applications that are gonna add efficiencies.”
“If this market continues as it is, this will not be the last enforcement actions that we take,” he said of the three ICOs the S.E.C. has moved against so far.
“Some of the offerings that we’re seeing, if the lawyers are telling them it’s OK, they’re just plain wrong,” he said, adding that taking action against lawyers knowing giving advice to ICO issuers that is against current laws is a possibility.
Source: Axios
