SEC chairman Jay Clayton has defended cryptocurrencies and clarified the steps towards regulating the market. He emphasized that the goal is not to halt the market, rather to strengthen the industry.
Jay Clayton who serves as the highest ranking official with the US Securities and Exchange Commission (SEC) said to a group at Princeton University that many ICO’s were excellent and that the SEC’s reasons for regulation will only help the industry. His response came after he was asked if all ICO’s were fraudulent.
On April 2, the SEC charged the co-founders of Centra Tech and halted the ICO from being issued. The agency charged Sohrab Sharma and Robert Farka with fraud but, before they were stopped, the two were able to raise ~$32 million dollars by producing false marketing material, including a slew of fake executives and paid celebrity endorsements to the likes of boxing icon Floyd Mayweather.
The SEC chairman emphasized that it is in the industry’s best interest to have a government group working as a watchdog. Clayton told the Princeton audience, “I think if we don't stop the fraudsters, there is a serious risk [of a] regulatory pendulum -- the regulatory actions will be so severe that they will restrict the capacity of this new security.”