‘Blatant’ Securities Abuses With Crypto Waning, SEC Chair Says

The SEC is seeing fewer instances of “blatant violations” of securities laws in the cryptocurrency space, agency Chairman Jay Clayton said.

The crypto community has made progress in understanding how securities laws may apply to digital assets, Clayton said at a financial technology conference in Washington on Oct. 23.

The Securities and Exchange Commission observed a “ton” of problematic crypto investment opportunities during the initial coin offering boom of 2017 and 2018, according to Clayton. Many crypto ventures once thought they could raise funds by blasting out a description of their project and asking for money without verifying information about their investors, he said.

“I don’t think there’s anybody who has looked at the securities laws, looked at our website” who would now think that it is appropriate to get investments that way, Clayton said.

The SEC supports entrepreneurs using ICOs and other crypto fundraising tools so long as they register their digital assets with the agency or get an exemption, Clayton said.

“You can’t have wide distribution to the retail public with trading and not have the protections of the Securities Act,” he said.