Former SEC Chairman Jay Clayton has come under criticism for supporting Gary Gensler over crypto token classification. Clayton argued that courts are not an efficient way to resolve classification issues around securities and commodities, and that many cryptocurrencies currently appear to be securities. He also said that securities can eventually become commodities, but early investors in crypto projects are currently benefiting from a first mover advantage. Clayton's comments followed Gensler's failure to answer whether Ethereum is a security or commodity during a recent House Financial Services Committee hearing. The crypto community criticized Clayton's comments, as they had hoped legal proceedings would clarify regulatory issues. Meanwhile, US regulators are facing more pressure after the European Union passed the Markets in Crypto-Assets (MiCA) regulation, the first comprehensive rules for digital crypto asset service providers.

(By Anvesh Reddy)