Former SEC chair Jay Clayton says new regulations on Bitcoin are imminent

In an appearance on CNBC’s Squawk Box on March 31, former US Securities and Exchange Commission Chair Jay Clayton warned that Bitcoin’s status as a non-security still does not protect it from the imposition of regulations which, he believes, seems coming.

“Where digital assets land at the end of the day will be driven in part by regulation—both domestic and international—and I expect, and I’m speaking as a citizen now, that regulation will come in this area both directly and indirectly whether it’s through how these are held at banks, security accounts, taxation and the like. We will see this regulatory environment evolve,“ Clayton said.

Clayton, who since his departure with the SEC in December 2020 acts as advisor on cryptocurrencies to One River Asset Management, commented on the lack of regulation during his time with the SEC by saying that the asset was declared not to be a security before he even took up his position as the head of the regulatory body.

“Bitcoin was decided to be not a security before the time I got to the SEC. Therefore, the SEC’s jurisdiction over Bitcoin was rather indirect,” he said

Even though – and perhaps therefore – Bitcoin’s price is hovering around a record high of $60,000 for a few days now and increased mainstream adoption is imminent, regulatory tightening is a reality that might impact the industry. Billionnaire hedge fund manager Ray Dalio recently said that he believes that Bitcoin might even be banned just like gold in the 1930s. While this seems highly unlikely and should be regarded as a worst-case scenario considering the corporate adoption, one can imagine tighter controls to fall within the spectrum of possibilities. Governments and financial task forces worldwide are currently trying to get their heads around it.

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