Former SEC Chair: A Security Today May Not Be a Security Tomorrow

Jay Clayton agrees with Gary Gensler that “securities cover a very wide swathe of crypto,” but says courts are not the place to resolve asset classifications

article-image

DarkDiamond67/Shutterstock modified by Blockworks

share

Former SEC Chairman Jay Clayton believes crypto tokens that might be deemed securities today might not be in the future. 

Clayton’s comments during a Friday interview on CNBC come as the SEC and CFTC fight for jurisdiction over crypto assets, and perhaps further mystifies industry folk seeking clarity on whether various tokens are securities or commodities. 

Current SEC Chairman Gary Gensler has said in interviews in the past year that while he views bitcoin as a commodity, most other crypto assets are securities.

“I do agree with Gary [Gensler] that securities cover a very wide swathe of crypto,” Clayton told CNBC Friday. 

When asked if ether (ETH) is a security or a commodity during a House Financial Services Committee meeting earlier this week, Gensler did not give a clear answer

CNBC asked Clayton the same question, to which he responded: “Things can go from being a security to not a security.”

The Howey Test — named for the 1946 Supreme Court case SEC v. W.J. Howey Co. — is used to determine what is deemed an “investment contract,” therefore falling under securities laws.

In a 2018 speech by William Hinman, then-director of the SEC’s division of corporation finance, he said looking at the way a crypto asset is sold is the best way to tell whether it is a security or not, noting that “current offers and sales of Ether are not securities transactions.”

Clayton seemed to agree with Hinman’s stance, saying in the Friday interview that Broadway tickets received for investing in a yet-to-be-produced play, for example, would be securities. Tickets bought years later to see that show, however, would not be. 

“[Ether] has many more hallmarks of just being a ticket than it does being a means to raise money,” he added.

The CFTC — in an action filed last month alleging that Binance and its CEO broke trading and derivatives laws — labeled bitcoin, ether and litecoin as commodities

The SEC is still tied up in a years-long lawsuit with Ripple Labs about whether XRP is a security. The regulator has more recently targeted Coinbase, for example, via a Wells notice related to potential alleged securities violations. 

Coinbase claimed in a blog post at the time that the company “doesn’t list securities.” 

“The courts are not an efficient place to resolve classifications around securities, commodities and the like,” Clayton argued. 

“Right now, we’re not in a spot where … the technology is going to come into the traditional financial system in any kind of smooth way,” he added later in the interview. “That’s what we should focus on.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates (1).jpg

Research

Jupiter has emerged as the undisputed liquidity backbone of Solana, commanding over 90% of spot DEX aggregation and 80% of perp trading volume. But behind the numbers lies a far more ambitious play: a cross-chain, vertically integrated super-app spanning swaps, synthetics, NFTs, memecoins, and launchpads. This report explores Jupiter’s rapid rise, the monetization upgrades reshaping its revenue profile, and the risks that could unwind its dominance, from token dilution to competition. With annualized revenues nearing $300M, the upside is undeniable, if it can navigate the turbulence.

article-image

Curve founder Michael Egorov is working on a new protocol designed to eliminate impermanent loss, rethink token emissions, and capture BTC-native yield

article-image

Mining outfits have gone bust in the wake of prior halvings. Not so this time around.

article-image

Zora’s announcement that its token is for “fun only” sparked a debate about the need for such tokens

article-image

In recent weeks, Helium has hit new all-time highs while passing major protocol milestones

article-image

Financial advisers in a January survey said equity ETFs were their top choice for gaining crypto exposure in 2025

article-image

“Why put a target out there that’s really speculative, not knowing exactly where this environment is going to go?” CarMax CEO Bill Nash said