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The US government has been dancing around cryptocurrency regulation in recent months, somewhat chaotically making decisions about which existing rules apply to crypto and which rules need to be created for crypto.

US SEC Chairman Jay Clayton has been one of the most outspoken figures on cryptocurrency regulation. Because the regulatory climate is shifting so quickly in the United States, it can be difficult to keep up with exactly where the tip of the regulatory arrow is pointed. Here are some of the latest statements that Clayton has made with regard to cryptocurrency regulation.

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Cryptocurrencies Exist on a Continuum

In a recent speech on ‘Cryptocurrency and Initial Coin Offerings’ delivered at Princeton University, Clayton stressed several important points.

First of all, Clayton demonstrated an understanding of the fact that not all blockchains are the same, and therefore should not all be regulated in the same way. In the speech, he described a sort of continuum along which all blockchain-based tokens exist. On the one side are speculative and volatile assets like Bitcoin; on the other side are more stable assets (ie tokenized securities.)

Clayton also suggested that a cryptocurrency’s functionality can occupy different places along the continuum at different stages in its “life cycle” depending on the context of how it is used and traded.

Clayton illustrates an example using bitcoin as one end of a spectrum, and stocks stored on a blockchain as the other: “The question is, where does our jurisdiction begin?”#ClaytonCrypto

— CoinDesk (@coindesk) April 5, 2018

”Fraudsters” Will Have the Last Laugh if US Doesn’t Regulate Soon

During the speech, Clayton also stated his belief that “distributed ledger technology has incredible promise for the financial industry,” and that he hopes that Washington’s approach toward crypto regulation is helping to protect the future of blockchain technology.

He explained that he would prefer that the government sets regulations sooner rather than later: “I think if we don’t stop the fraudsters, there is a serious risk that the regulatory pendulum – the regulatory actions will be so severe that they will restrict the capacity of this new security.”

Clayton further expressed his concern about the behavior of “fraudsters” within the cryptocurrency space at a Chicago conference on Tuesday, April 10th. “The fraudsters flocked to the new and attractive space. I guess that shouldn’t surprise me, but it does.”