SEC’s Senior Advisor for Digital Assets Valerie Szczepanik: Stablecoins May be Securities
William Suberg's original article for cointelegraph.com reduced by 56%
Senior advisor for digital assets at the United States Securities and Exchanges Commission Valerie Szczepanik reportedly noted that stablecoins could experience issues under current securities laws. Szczepanik, also known as the Crypto Czar, was appointed to the new position of associate director of the Division of Corporation Finance and senior advisor for Digital Assets and Innovation for Division Director Bill Hinman in June of 2018. When Szczepanik reportedly made the statement concerning securities at Austin's SXSW conference on March 15, she also broke stablecoins into three categories.
One kind of stablecoins are the ones tied to real assets such as gold or real estate, and another type are the ones tied to fiat currency held in reserves, in Szczepanik's classification. "I've seen stablecoins that purport to control price through some kind of pricing mechanism, whether it's tied to the issuance, creation or redemption of another type of digital asset tied to it, or whether it is controlled through supply and demand in some way to keep the price within a certain band." Szczepanik reportedly said that since a central party controls the price fluctuations over time, that last kind of stablecoins "Might be getting into the land of securities." According to her, if buyers are promised that somebody else will be holding or guaranteeing a profit or controlling the price, the token could be a security. More recently, SEC's chairman Jay Clayton seemed to confirm that Ethereum and cryptocurrencies like it are not securities under U.S.
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