US SEC Changes Its Head, Will It Change Its Stance on Cryptocurrency?

Jay Clayton, the Chairman of the US Securities and Exchange Commission (US SEC) resigns from his post in front of New Year. Jay threw in the towel after putting pressure on Ripple Inc. accusing the company of involving itself in the sale of unregistered digital asset securities worth $1.3 billion.

The Chairman had worked for SEC, an independent agency responsible for protecting investors, implementing the federal securities regulations and regulating the country’s securities industry for over 3 years and his contract was soon ending. His day at the agency’s office led to the selloff of major cryptocurrencies especially Bitcoin (BTC), Ethereum (ETH) and XRP, and this left a cost of over USD 50 billion to the digital currency market due to the ongoing lawsuit against Ripple.

Digital currency industry suffered a great deal from Clayton’s suspiciousness

During his term of office, the US SEC tried to protect investors and users against criminals and many unlicensed digital currency businesses and this resulted in the massive fines, charges and bans imposed on many companies involved in fake cryptocurrency offering such as Telegram, Unikrn Inc., Kik Interactive, Block one, and many others.

The agency has also denied justice to many applications of Bitcoin and crypto exchange-traded funds (ETFs) including NYSE ARCA Inc., Cboe BZX Granite Shares, Wilshire Phoenix and many others. According to CoinIdol, a world blockchain news outlet, over 20 applications were rejected.

Jay Clayton is known for its cautiousness about cryptocurrency. Despite his leadership being known for many achievements, the cryptocurrency industry suffered a great deal from his suspiciousness. For instance, the current with Ripple made XRP decline in value.

Several cryptocurrency exchanges like CrossTower, OSL, and Beaxy, feared being fined for trading XRP and they started delisting it from their platforms.

A heavy blow to XRP price

Due to that uncertainty, the price of XRP has plummeted by over 59% for the past 7 days and has also dropped by more than 32% for the last 24 hours. 

Currently, XRP/USD is trading at $.198301, with a market cap of $9.037 billion (-32.48%) and a 24-hour volume of $9.352 billion, as per the data by CMC. Looking at the charts, XRP could even decline and touch below the $0.1 cap any time soon.

Following the SEC crash on Ripple, the exchanges operating from Japan did not accept to treat XRP coin as a security but rather the coin is continuing to trade in the country as a cryptocurrency in line with the country’s Funds Settlement Act. Japanese exchanges have not yet delisted XRP from their platforms.

The Chairman subjected much pain to several startups and killed innovations in the cryptocurrency industry. However, under his administration, Bitcoin was recognized as a payment system and emphasized that the prevailing payment mechanisms still have some flaws that need to be solved.

What might happen if the new head of the SEC is crypto-friendly?

If Clayton doesn’t return to the SEC, the agency might be convinced to appoint another person who has a background in blockchain and cryptocurrency. Andrew Yang, a Bitcoin advocate who wanted to stand as the US president, could be one of the perfect people to replace Clayton.

Since Yang is crypto-friendly, the industry could experience significant relief if he is appointed. Verdicts on Bitcoin ETFs will be produced under the watch of a new crypto-friendly leader.

Yang has been calling for regulatory clarity on cryptocurrency, so if Jay replaces Jay, an effective regulatory framework could be drafted and implemented, hence a massive growth in the use of cryptocurrency and blockchain technology.