SEC Commissioner Robert Jackson has recently revealed that consumer protection is the body’s number one priority. Speaking in an interview for CNBC on April 30th, he shared his concerns over the "troubling developments’" that are currently plaguing the crypto market, and gave an insight into how the commission intends to resolve them.
Protecting investors from fraudulent ICOs
Much of Mr Jackson’s interview revolved around initial coin offerings (ICOs) - and the problems arising from these - with the commissioner suggesting that it can be difficult for investors to separate viable investments from their worryingly prevalent fraudulent counterparts.
Speaking on initial coin offerings, Mr Jackson said:
“I haven’t seen one of these yet that’s not a security. One of the things about ICOs that are interesting is if you want to know what our markets would look like with no securities regulation, the answer is the ICO market. We are focused on protecting investors who are getting hurt in this market. Down the road, we will be thinking about – we should be thinking about – ways to make those investments work consistent[ly] with those security laws.”
Clarifying his views on the topic, the commissioner said that he neither suggested SEC regulations nor a blanket ban as viable measures to resolve the issue; however, he did note that his views are in line with SEC Chairman Jay Clayton with regards to viewing all ICOs as securities.
A lack of consensus concerning crypto
In light of these and other comments, it’s fair to say that uncertainty remains a ubiquitous part of the crypto market, with no real consensus over what cryptocurrencies actually are. It is this in particular that makes it so hard to regulate them in any way.
This is perfectly exemplified by the recent actions of a number of key Silicon Valley firms, which have been lobbying against the classification of cryptos as securities. Led by Andreessen Horowitz, these bodies have a view that directly opposes that of the SEC.
With regards to crypto and blockchain start-ups themselves, many argue that their initial coin offerings should most accurately be classified as utility tokens – coins that are used to access a decentralised network.
Investors can only wait and see how their investments will eventually be categorised: as securities, utility tokens, or as something else entirely.