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The Ledger

SEC Commissioner on Bitcoin: ‘That Space Is Full of Troubling Developments’

By
Polina Marinova
Polina Marinova
By
Polina Marinova
Polina Marinova
April 30, 2018, 10:51 AM ET

SEC Commissioner Robert Jackson has some strong opinions about cryptocurrency and initial coin offerings.

In a CNBC interview Monday morning, Jackson said his personal view on Bitcoin is that it’s a space “full of troubling developments.” He didn’t elaborate but said his concerns center more around initial coin offerings (ICOs), which are a mechanism for startups or online projects to raise money without selling stock or going to VCs.

“Investors are having a hard time telling the difference between investments and fraud,” he said.

The SEC has been cracking down on fraudulent ICOs in recent months. The agency has targeted ICOs they suspect are raising money for businesses that don’t even exist. It issued subpoenas to firms and individuals behind projects it believes are breaking the law.

“We’ve been doing a lot in the ICO space,” Jackson said. “[SEC] Chairman Jay Clayton has been very clear about this. He said he hasn’t seen an ICO yet that’s not a security. And I’m with him — I haven’t seen one of these yet that’s not a security.”

The cryptocurrency market is still in its “Wild West” phase as regulators try to figure out how to proceed. Clayton has previously said that the majority of ICOs should be registered with the agency because the coins trade on secondary markets like other securities the SEC regulates.

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Fortune spoke with Blockchain Capital’s Bart Stephens recently, and he said there is still plenty of regulatory uncertainty when it comes to token issuance. “The SEC has told us a bunch of things that they don’t like, but what they haven’t really told market participants is what is allowable,” he said. “There’s a little bit of ongoing uncertainty, but it’s my hope that they are thoughtful and careful when making these decisions.”

A big part of the uncertainty comes from the fact that many regulatory agencies can’t decide exactly how to define (and in turn, regulate) cryptocurrencies such as Bitcoin. There’s been plenty of debate around whether cryptocurrency assets are commodities, currencies, or securities — and no one seems to be able to agree.

“We are right now focused on protecting investors who are getting hurt in this market,” Jackson said. “And down the road, I think we will be thinking about — I think we should be thinking about ways to make those investments work consistently with our securities law.”

About the Author
By Polina Marinova
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