The U.S. Securities and Exchange Commission (SEC) held its “town hall meeting” last Wednesday at the University of Georgia in Atlanta. The public meeting was billed as an informal reunion of the public with members of the SEC to discuss the future of cryptocurrencies and blockchains in the U.S., while giving the SEC a chance to receive feedback and opinions from attendees. The meeting, which was also live-streamed on the SEC website, had been marketed well and many expected significant revelations from the regulatory body. To the disappointment of most, the meeting was anything but eye-opening.
The meeting did little more than to acknowledge what the SEC has already reiterated time and time again. It invites innovation in the blockchain space, but is concerned with fraud. Initial coin offerings (ICO) are, still, securities.
SEC Commissioner Kara Stein commented, “[Cryptocurrency] has the potential to reduce the cost of investing. It could decease the cost of capital allocation. We are being challenged, we are being disrupted like everybody else is… and one of the things we’re thinking about is how embrace the innovation and make sure it’s used effectively. One thing we are thinking through is how to ideally anticipate and prevent problems before they arise.”
She continued her diatribe, stating, “I think remaining competitive requires, both us as regulators and market participants, to thoughtfully evolve with the innovation and not react to it after the fact. For example, there are increased risks for pump and dumps and Ponzi schemes, perhaps, because it’s so easy to now invest in that hotel resort community in some African nation.”
Jay Clayton, chairman of the SEC, was on hand as well, and echoed his previous statements that he believes in blockchain technology. He stated, “Blockchain technology has incredible promise for securities and other industries. I think we all can agree on that… It greatly reduces transactions costs, including the costs of verification. It’s a powerful technology… That technology, people have used to apply to fundraising… we’ve had pretty clear…rules on how to conduct fundraising when you’re offering securities. Much of what I have seen in the ICO or token or ICO space, is a security offering… I don’t know how much more clear I can be about it.”
Notably absent from the meeting was any mention of specific tokens, projects, coins or cryptocurrency companies. The SEC has repeatedly said that it recognizes the need for regulations for cryptocurrency and blockchains, and that it is empowered with the responsibility to look out for the best interests of the consumers. However, the U.S. is no closer to governing the space, which is the only true way to protect the consumers. As long as you keep one foot on land and one foot on the deck of the boat, the boat will never be able to set sail.
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