Former SEC Chairman Jay Clayton Believes ‘Vast Majority’ of Crypto Tokens Are Securities

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But there is hope: something that was once labeled a security, “might not always be a security.”

Jacquelyn Melinek 10 hours

Former SEC Chairman Jay Clayton has reiterated his position that many cryptocurrencies could be defined as securities, even as the crypto industry continues to battle the US Securities and Exchange Commission. United on the prohibitive position of regulators towards the industry.

I’ve been saying this for a long time: I think the market has moved on, but many, if not the vast majority, of the tokens that were sold for cash would fall within the definition of a security in America, Clayton, now senior adviser in politics and a lawyer at Sullivan & Cromwell LLP, said Wednesday at the R3 CordaDay conference.

The definition of a title is intentionally broad and flexible, Clayton noted. But, he added, there is a chance that something once labeled as security may not always be security.

So what could be causing this change? Current utility versus future utility, Clayton said.

Clayton cited the example of Broadway show tickets: if someone buys 1,000 tickets for $10 and tells friends and family that they can resell those tickets for $100 or $1,000, then that It’s a security, he said. But if you just bought the ticket 10 years later, it’s just a ticket.

The confusion around this and the horrible legal advice [thats been] given led to bitter and emotional fights over classification, Clayton said.

For the former SEC chairman, the big question is how to trade these notes when they are not securities. For example, Taylor Swift tickets, which have caused a bit of chaos for fans and Ticketmaster in recent months, can resell for thousands of dollars more than originally purchased, but that wouldn’t be securities trading, Clayton said. But we should have a digitized market for that.

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