But, at least Jay Clayton swears his darnedest to protect investors from the bad actors, pirates and hackers that lurk the inter-webs. Essentially, the SEC has showed up to a knife fight, three hours late, weilding a fork.
** Here is what you need to know about the SEC's Testimony on “Virtual Currencies: The Oversight Role of the U.S. Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission” by Jay Clayton, Chairman, U.S. Securities and Exchange Commission. This was before the Committee on Banking, Housing, and Urban Affairs United States Senate - February 6, 2018
The testimony opened with a reminder that the SEC's missions is to "protect investors, maintain fair, orderly and efficient markets and facilitate capital formation." They watch over the approximate $75 trillion in securities traded annually, $31 trillion in market capitalization and 26,000 registered players.
Clayton declares (again, he reminded us) that crypto-currency in retail is to be treated like cash. "...these market participants should treat payments and other transactions made in cryptocurrency as if cash were being handed from one party to the other."
Which means you are to declare exceeds of $10,000 on the portions you are declaring.
Read more about reporting cash transactions and foreign financial accounts from the Internal Revenue Service (IRS) here: https://www.irs.gov/pub/irs-utl/reporting_cash_transactions_and_foreign_financial_accounts.pdf
Read more about the definition of a security: https://supreme.justia.com/cases/federal/us/328/293/case.html
Chairman is "optimistic" about developments in financial technology to "help facilitate capital formation" and provide opportunities for investment to institutions and Main-Street, alike. He continues that "utility" is an inadequate claim in attempting to absolve crypto-coins from being classified as securities. All promotions of investment for profit, blockchain/distributed-ledger technologies, or not, are a security, as defined by the Securities Act of 1933.
It is curious the market would treat crypto-coins like securities, rather than services, but this is what happened in 2017. Maybe the change in behavior is because of the scalability issues. Block-chain tokens were first branded as quick transactions, anonymous, secure and off the record. Now they are being branded as secure investment. Or maybe it was distraction. There are plenty enough conspiring in the field, and I'm not yet convinced that this wasn't an elitist invention to protect from the wiping the world's current financial records. Too much is yet to unfold, and the future cannot be predicted.
Does it matter what cryptos are branded as? Suppose I make a coin and promote its function, but not its' future value. However, the demand increases, and the value increases. Am I honorably thwarting the SEC? More interesting is a good function of crypto - comment below if you've thoughts worth sharing.
Beyond those basics, it should be noted that Clayton gives a shout to Zuckerberg's gang "I do want to recognize that recently social media platforms have restricted the ability of users to promote ICOs and cryptocurrencies on their platforms. I appreciate the responsible step."
At the end of the day, SEC is taking a no-tolerance stand on ICOs that don't file properly and subject themselves to regulation. "I have asked the SEC’s Division of Enforcement to continue to police these markets vigorously and recommend enforcement actions against those who conduct ICOs or engage in other actions relating to cryptocurrencies in violation of the federal securities laws."
How well one can defend and attack with a fork must depend on the wielder. I'd take Bruce Lee with a cotton ball over myself with a machete 6 days of the week. All we can do is figure out the rules of this game, written and hidden, and play or sit the sidelines. No guts - no glory, no risk - no gain, better safe than sorry - go big or go home - what more cliches can I say?
READ SOURCE CONTENT FOR YOURSELF: https://www.banking.senate.gov/public/_cache/files/a5e72ac6-4f8a-473f-9c9c-e2894573d57d/BF62433A09A9B95A269A29E1FF13D2BA.clayton-testimony-2-6-18.pdf
