Former SEC Chairman Says Bitcoin Could be Regulated Soon

Key Takeaways

Jay Clayton warns bitcoin and crypto asset regulation is likely to arrive soon
Regulatory talk is increasing as banks and investors call for rules over crypto assets

Bitcoin’s Regulatory Status

The former US Securities and Exchange Commission Chairman Jay Clayton recently commented on bitcoin and its regulatory status, or the lack of it, particularly in the US. Speaking to CNBC, the ex-SEC Chairman warned that regulations for bitcoin are expected to arrive.

“Bitcoin was decided to be not security before the time I got to the SEC. Therefore, the SEC’s jurisdiction over Bitcoin was rather indirect, and its integration into the securities regulatory. That does not mean it should not be regulated,” Mr. Clayton said.

A Challenging Road Ahead?

Jay Clayton stressed that regulation in and outside the US will be challenging and demanding. He went on to say: “Where digital assets land at the end of the day will be driven in part by regulation both domestic and international, and I expect 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.”

A couple of weeks prior to the interview, Jay Clayton took on an advisory role at bitcoin-focused hedge fund One River Digital Asset. Jay Clayton served as the SEC Chairman under the Trump administration from 2017 to 2020, right at the onset of the first massive crypto frenzy fueled by the retail community.

SEC Chairman has Crypto High on the Agenda

In April 2021, the US Senate confirmed the new SEC Chairman, Gary Gensler. Mr. Gensler, a veteran regulator, and banker have bitcoin and crypto-assets high on his agenda. He is expected to hit the ground running and deal with a host of hot issues exposed this year in places ranging from the stock market to cryptocurrencies and Bitcoin exchange-traded funds (ETFs).

Bitcoin and crypto space regulation is an increasingly discussed topic. Previously, investment professionals have raised their concerns that the crypto market should be regulated. Among them, Ray Dalio, founder of the world’s largest hedge fund with over $150bn in assets, JPMorgan CEO Jamie Dimon, and Goldman Sachs boss David Solomon.