Bitcoin is not a Security, but its regulation is imminent.
Former US SEC Chairman Jay Clayton stated that Bitcoin has not been a security for a long time.
Bitcoin is not a security – however, it doesn’t mean that it won’t be regulated, former US Securities and Exchange Commission (SEC) chairman Jay Clayton stated recently.
Clayton, now the advisor of One River Asset Management on cryptocurrency, stated that Bitcoin wasn’t a security even before he joined the SEC. But the regulation of the asset will still come, he continued.
“Bitcoin not being a security, does not mean that it should not be regulated,” he said.
“In fact, where digital assets land at the end of the day, which is very much a wide-ranging question, will be driven in part by regulation—both domestic and international—and I expect, and I’m speaking as a citizen now, that regulation will come in this area both directly and indirectly whether it’s through how these are held by banks, security accounts, taxation and the like.”
Clayton’s comments come as Ripple asks the SEC to re-examine Bitcoin and Ethereum. Ripple particularly wants a court to compel the SEC to share its internal discussions about Bitcoin and Ethereum with the hopes that it could improve its own case for XRP.
Ripple now faces a billion-dollar lawsuit from the SEC, which filed its complaint right before Clayton stepped down as a chairman. The Commission alleged that the company had illegally raised $1.3 billion through the unregistered sale of XRP, which the SEC states was a type of security known as an investment contract.
However, Ripple says that XRP is not a security, but a cryptocurrency. The company is in the process of fighting the SEC’s lawsuit on the grounds.
As a part of its defense, Ripple asserts that the SEC shall class XRP as a virtual currency, like it classes Bitcoin and Ethereum virtual currencies and not securities.
The lawsuit has proven to be detrimental for the firm and for XRP: top crypto exchanges like Coinbase, Binance, and Kraken have stopped all XRP trading. The price of the currency also dipped, and it dropped down the list of the top cryptocurrencies by market cap – falling from third to seventh in just a matter of months.
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