SEC Chairman Releases Statement That Could Change Economic Situation for Ethereum

Jay Clayton, who is the Securities and Exchange Commission chairman, has made recent statements that are causing members of the crypto community to wonder if change is imminent on their policies. Specifically, they are curious about whether their opinion on ether (Ethereum) might be changing. Previously, top officials have noted that ether should not even be regulated as a security token.

Clayton has taken on the role of leading the SEC since last year. In a statement last week on the agency’s website, he noted that the SEC employees have full authorization to advise stakeholders how the different regulations apply to their situations. However, the announcement specifies:

“The Commission’s longstanding position is that all staff statements are nonbinding and create no enforceable legal rights or obligations of the Commission or other parties.”

The chairman also noted that, in his conversations with the directors of other divisions, he encouraged the others to speak with their staff about this policy. Furthermore, he wanted the officials to review any statements that their staff has made, determining if those statements need to be revised or completely withdrawn. He said:

“More generally, our divisions and offices, including but not limited to the Division of Corporation Finance, the Division of Investment Management and the Division of Trading and Markets, have been and will continue to review whether prior staff statements and staff documents should be modified, rescinded or supplemented in light of market or other developments.”

Much of the reason for this release has seemed to correspond with the decision to retract the guidance that the SEC has issued since 2004. This retraction makes consumers wonder if they will rescind their decisions made about cryptocurrency as well, implying that the statement has a bigger message than it seems.

In June, SEC Director of Corporation Finance William Hinman specifically said, regarding crypto:

“In its current state, we don’t see value regulating it.”

On the quote, Patrick Daugherty responded to a tweet that implied that the community decided that Hinman’s quote is the final word on the topic. However, Daugherty said,

Hinman’s remarks are his view of the law when stated. They don’t bind the SEC or any other Div’n (such as DOE). It would be error not to address his analysis when dealing with DCF. Also wrong to infer that DOE or SEC have adopted his analysis or conclusions. #SEC #crypto https://t.co/i0hVUhyhuA — Patrick Daugherty (@daughertylawyer) September 16, 2018

Based on the latest statements from Clayton, there is nothing to imply that the official position of the SEC has changed in anyway. However, it does give permission for the entity to recant their statement later, as Ethereum could evolve past being classified as a security.