Last week, SEC Chairman Jay Clayton gave an interview during which he provided his thoughts on initial coin offerings (“ICOs”) and cryptocurrencies. He applauded the “incredible promise” of distributed ledger technology as a driver of efficiencies, and also attempted to clarify the SEC’s position on its role in regulating ICOs and token offerings.

Chairman Clayton explained:

“A token, a digital asset, where I give you my money and you go off and make a venture, you have some company you want to start…and in return for me giving you my money, you say, ‘you know what, I’m going to give you a return, or you can get a return in the secondary market by selling your token to somebody,’ that is a security and we regulate that. We regulate the offering of that security and we regulate the trading of that security. And that’s our job and we’ve been doing it for a long time.”

Clayton encouraged individuals intending to have an ICO to “come see us” and make the required filings with the SEC. He added that if individuals planning a public token offering “take the responsibility our laws require…we’re happy to help you do that public offering.”

In addition to his comments on ICOs, Clayton distinguished cryptocurrencies, like bitcoin (BTC), as a type of currency and not a security. However, the Chairman refused to comment on other individual cryptocurrencies like Ripple (XRP) and Ethereum (ETH).

When asked, Clayton said he would not support the SEC changing the definition of a security to accommodate the ICO community. He stated, “We are not going to do any violence to the traditional definition of a security, which has worked well for a long time, and I believe will continue to work well.”