What has happened?
The Chairman of the Securities and Exchange Commission (SEC) has said the agency will not be adjusting the definition of what is deemed a security to suit the cryptocurrency community.
What does this mean?
Speaking to CNBC last week, Jay Clayton said that the SEC will not change its approach to securities regulation to take account of cryptocurrencies.
Reiterating what he had already explained on other occasions, Clayton added that be believes that most initial coin offerings (ICOs) fall within the definition of securities.
"A 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 'you can get a return' that is a security and we regulate that," Clayton said.
"We regulate the offering of that security and regulate the trading of that security."
According to the SEC head, the sale of security-tokens must follow the law.
"If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules… If you want to do an IPO with a token, come see us, file financial statements, file disclosure, take the responsibility our laws require and we're happy to help you do that public offering."
Clayton declined to comment on whether individual cryptocurrencies, such as Ripple or Ethereum, constitute securities.
When pressed on whether the SEC might change its position in respect of ICOs and cryptocurrencies, Clayton repeated:
"We are not going to do any violence to the traditional definition of a security that has worked for a long time… We've been doing this a long time, there's no need to change our fundamental approach."
On distributed ledger technology, Clayton said that this showed "incredible promise", as it can drive efficiencies in many markets.
Clayton's comments follow the appointment last week of Valerie Szczepanik, who joined the agency in a newly created role in which she will co-ordinate efforts across all SEC divisions and offices regarding the application of securities laws to emerging digital asset technologies and innovations.
Szczepanik previously led the SEC's distributed ledger group.
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