SEC’s Jay Clayton, the chairman of the commission, is open to new ideas about tokenized stocks, or an exchange-traded fund. This would be a tokenized stock which will represent an index but the recent clampdowns only suggest that the offerings don’t cut it just yet. In our latest cryptocurrency news, we find out more about his ideas.
SEC’s Jay Clayton said that the US Securities and Exchange Commission struggled to keep up with the pace of the innovation in the Defi space but he is open to its potential. In a webinar with the Chamber of Digital Commerce, Clayton said:
“It may very well be the case that […stocks] all become tokenized.”
The tokenized stocks will form a new financial product that will fall under the Defi umbrella while others include non-custodial loans and decentralized stabelcoins. Clayton’s even open to the idea of exchange-traded funds or stocks whose price tracks an index:
“We’re willing to try that; our door is wide open. If you want to show how to tokenize the ETF product in a way that adds efficiency, we want to meet with you, we want to facilitate that.”
Back in July, the SEC along with some of the other regulators took Abra, the company offering tokenized stocks to the cleaners and at that time, the SEC alleged that the tokenized stocks constitute a “security-based swap subject to the US Securities laws.” The startup then had to pay a fine of $300,000 and stop offering these products. The SEC later rejected a few other attempts of a Bitcoin ETF that can track the price of Bitcoin, explaining that Bitcoin’s price is prone to manipulation. Without referencing Abra or the BTC ETF, Clayton said:
”We got off on the wrong foot in this innovation. There was the theory that because it was so efficient, because it could have had so much promise, we could toss aside some of those principles of responsibility and transparency. You have to stay true to the principles, which is people who are distributing stock. People who are insiders of the companies for which the stock has been issued—they have responsibilities.”
The SEC has gone after many crypto companies that run ICOs claiming that they were exempt from securities regulations because they were creating a payment system, not offering speculative investments.
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