Jay Clayton, the chairman of the US Securities and Exchange Commission, is coming under fire from Republican lawmakers amid growing concerns over his harsh approach to regulatory enforcement — which critics claim strangles the free market and inhibits technological innovation.

In 2018, the SEC launched a massive crackdown on the crypto industry, which has been roiled by high-profile ICO scams and suspicions of market manipulation.

Clayton was appointed SEC chair in 2017 by President Trump, with a mandate to enforce securities laws while ensuring that regulations are pro-business and promote the free market.

But critics say Clayton lacks the “vision of market-driven change” that Republicans had hoped for on issues relating to cryptocurrencies and emerging technologies, Reuters reported.

As a result, some lawmakers and lobbyists say the US crypto industry has been stalled in its progress toward mainstream adoption and its bid to become a preeminent market leader.

‘Clayton Lives In an Ivory Tower’

“Jay Clayton has shown the industry that he lives in an ivory tower with his resistance to approve registration statements for token offerings,” said Anthony Tu-Sekine, head of the blockchain and crypto group at law firm Seward & Kissel. “It is frustrating.”

One lobbyist said he doesn’t understand why the pro-business Trump Administration hired Clayton, whom they feel has adopted a draconian approach to regulation.

How did we end up with this guy? We can’t get anything out of him.

SEC chair Jay clayton
Jay Clayton says he won’t support a bitcoin ETF until there is regulatory clarity. (YouTube)

In August 2018, the SEC rejected 9 bitcoin ETF applications, citing the applicants’ failure to demonstrate how they could prevent fraud and market manipulation, as CCN reported.

Diego Zuluaga, a policy analyst at the libertarian Cato Institute, called the rejection “most disappointing.”

In March 2017 and again in June 2018, the SEC rejected the bitcoin ETF (exchange-traded fund) applications submitted by the Winklevoss twins, Tyler and Cameron.

And two weeks ago, the SEC once again delayed making a decision on VanEck’s bitcoin ETF application until February 27, 2019. It was the second or third such postponement this year.

Clayton: Strict Enforcement Helps Industry

In February 2018, Clayton signaled that his agency would investigate cryptocurrencies when he testified before the US Senate Banking Committee. At the time, he said: “I believe every ICO I’ve seen is a security.”

Weeks later, the SEC targeted ICOs by issuing “dozens of subpoenas” to crypto-related tech companies and advisors to investigate how ICOs are structured.

The SEC’s rampant crackdowns on the virtual currency market has led many in the community to conclude that Clayton is anti-crypto. But he insisted that he’s not.

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