{"id":5130,"date":"2018-09-24T16:16:50","date_gmt":"2018-09-24T20:16:50","guid":{"rendered":"https:\/\/abovethelaw.com\/?p=513607"},"modified":"2018-09-24T16:16:50","modified_gmt":"2018-09-24T20:16:50","slug":"how-will-the-sec-treat-crypto-heres-whats-been-said-so-far","status":"publish","type":"post","link":"https:\/\/abovethelaw.com\/legal-innovation-center\/2018\/09\/24\/how-will-the-sec-treat-crypto-heres-whats-been-said-so-far\/","title":{"rendered":"How Will the SEC Treat Crypto? Here\u2019s What\u2019s Been Said So Far"},"content":{"rendered":"

\"\"Because of my interest in blockchain technology, I\u2019ve become the default \u201ccryptocurrency person\u201d in my immediate circle. Blockchain (which is different from\u00a0cryptocurrency) is such a <\/span>new and exciting industry<\/span><\/a>, and it seems like everyone wants to know more.<\/span><\/p>\n

Specifically, professionals often ask me to predict what the SEC will do in the future. This can be a difficult question to answer directly. While reading minds is not my virtue and I don\u2019t have a crystal ball (though one would be very handy on occasion), I often share a few quotes that I think summarize the SEC’s current thinking.<\/span><\/p>\n

Is Ether a Security?<\/b><\/p>\n

Some SEC officials say no. On June 14, William Hinman, Director of the Division of Corporate Finance, <\/span>spoke<\/span><\/a> at the Yahoo Finance All Markets Summit: \u201c[Putting] aside the fundraising that accompanied the creation of Ether, based on my understanding of the present state of Ether, the Ethereum network and its decentralized structure, current offers and sales of Ether are not securities transactions.\u201d<\/span><\/p>\n

Does Everyone Agree? <\/b><\/p>\n

Maybe not. On June 6, Jay Clayton, chairman of the SEC, told <\/span>CNBC<\/span><\/a>: \u201cA token, a digital asset, where I give you my money and you go off and make a venture, and in return for giving you my money I say \u2018you can get a return\u2019 that is a security and we regulate that,\u201d Clayton said. \u201cWe regulate the offering of that security and regulate the trading of that security.\u201d\u00a0<\/span><\/p>\n

Is Crypto Safe?<\/b><\/p>\n

Clayton appears to be more hesitant about crypto in general. <\/span>Testifying<\/span><\/a> before the Senate Banking, Housing, and Urban Affairs Committee on February 6, Clayton said: “[T]here are significant security risks that can arise by transacting in these markets, including the loss of investment and personal information due to hacks of online trading platforms and individual digital asset \u2018wallets.\u2019 A recent study estimated that more than 10% of proceeds generated by ICOs — or almost $400 million — has been lost to such attacks. And less than two weeks ago, a Japanese cryptocurrency market lost over $500 million in an apparent hack of its systems.\u201d<\/span><\/p>\n

Will There Be Any New Regulations?<\/b><\/p>\n

Clayton doesn\u2019t seem to think that the definition of security will change. In the same June 6 interview, Clayton also told CNBC: \u201c[The SEC is] not going to do any violence to the traditional definition of a security that has worked for a long time. We\u2019ve been doing this a long time, there\u2019s no need to change the definition.\u201d<\/span><\/p>\n

Wait, Does Everyone Agree On That?<\/b><\/p>\n

With the recent nomination and confirmation of Elad Roisman, a new commissioner, we may also see movement toward approving at Bitcoin ETF. Roisman has already signaled his desire to focus regulatory attention on cryptocurrency\u2019s fair treatment. <\/span>Speaking<\/span><\/a> at a Senate Banking Committee hearing in July, he said, \u201cthe SEC must examine and re-examine its rules, regulations, and guidelines to ensure that they are still working as intended to accomplish the SEC\u2019s mission.\u201d He also added, \u201cIt is essential that the SEC approach these new challenges in a fair and transparent manner, provide clarity and certainty to the markets and investors, and enforce the laws and regulations that hold market participants accountable.\u201d<\/span><\/p>\n

Based on these quotes, there may be a few different opinions about the future of cryptocurrency. I\u2019d like to know — what do you think? Whose word are you taking, if any? And, bonus points if you share your favorite SEC quote!<\/span><\/p>\n

\n

\"\"Olga<\/span>\u00a0V. Mack<\/a>\u00a0is a blockchain strategist, public speaker, and adjunct professor at Berkeley Law. She is Vice President of Strategy at Quantstamp, the first decentralized security auditing blockchain platform. Most recently, she served as General Counsel at ClearSlide<\/i>\u00a0and\u00a0she has held legal and operational roles at Visa, Zoosk, Pacific Art League, Wilson Sonsini, and Yahoo.\u00a0Olga\u00a0<\/span>founded the\u00a0<\/i>Women Serve on Boards<\/a><\/i>\u00a0movement that advocates for women to serve on\u00a0<\/i>the\u00a0<\/i>corporate boards of Fortune 500 companies. You can email\u00a0Olga<\/span>\u00a0at\u00a0<\/i>olga<\/span>@olgamack.com<\/a><\/i>\u00a0or follow her on Twitter\u00a0<\/i>@olgavmack<\/a><\/i>.<\/i><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s clearly a few different opinions about the future of cryptocurrency, even within the SEC itself. <\/p>\n","protected":false},"author":27805,"featured_media":428802,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1455],"tags":[148,3048,674,22,232,1588,7],"class_list":["post-5130","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-blockchain","tag-cryptocurrencies","tag-finance","tag-in-house-counsel","tag-olga-v-mack","tag-securities-and-exchange-commission","tag-technology"],"acf":[],"yoast_head":"\nHow Will the SEC Treat Crypto? 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