The head of the SEC explained how its agency defines what is or is not a security, saying that the tokens are in initial currency offers are used

SEC Statement of Securities, ICO's

Jay Clayton, Head of the US Securities and Exchange Commission (SEC) reassured CNBC listeners that the agency will not change the rules for how it describes what is and what is not considered security if it deals with cryptokurrency.

"We will not violate the traditional definition of a security that has long worked," Clayton said. "We've been doing it for a long time, it's not necessary to change the definition."

He added that the US $ 19 trillion effect market is an envy of the world under the current guidelines.

In this connection, the chairman also said that the agency would not adjust the rules for ICOs. The fundraising method has so far found investors of over $ 9.6 billion this year. Compared to the first quarter of 2017, combined ICO investments amounted to just under $ 40 million. The big increase in just a year's time shows how popular IKOs have become, and fortunately, the SEC is not going to grow by changing any rules as to how it is classified.

In fact, the SEC is happy to help you with the public offer & # 39; If issuers comply with the SEC's laws, Clayton said.

"If you have an ICO or stock, and you want to sell it in a private placement, follow the private placement rules , "he said.

Security or Not?

The second thing that Clayton discussed was another explanation. This time about how the agency Determine which cryptocurrency falls under its jurisdiction. He compares Bitcoin to compare currencies such as the dollar and euro, and says:

"Cryptocurrencies: These are substitute for sovereign currencies, replacing The dollar, the euro, the yen with bitcoin

To explain, characters or digital assets used in ICOs are effects by Clayton's definition:

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"A Token, a digital asset, where I give you money, and you're going to go down and make a business , and in exchange for giving my money, I say & # 39; you can get a return & security, and we'll regulate it, "Clayton said. "We regulate the offer of that security and regulate the trading of that security."

What determines whether an asset is a security follows what is called the & # 39; Howey Test & # 39; which comes from a 1946 US Supreme Court case that classified securities. Last month, the SEC created its fake HoweyCoins.com website that traced the red flags of fraudulent fundraisers to of potential victims .

Earlier this year, the financial watchdog launched a joint suppression of potential disruptive IKOs. The agency, together with counterparts at the US Commodity and Future Trade Commission (CTFC), was proactive to warn consumers about pump and dump schemes . They even issued summons even though it goes so far that they charge multiple cryptocurrency projects with fraud .

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