That agency’s chairman, J. Christopher Giancarlo, late last year allowed two exchanges to offer Bitcoin futures, arguing the move would help the CFTC gain insight into the largely unregulated markets where the cryptocurrency is traded.

ETF Apprehension
Although many expected the futures would hasten SEC approval for mutual and exchange-traded funds based on digital coins, it has not. Instead, the agency said this month such offerings raise a number of investor-protection questions. In the interview, Clayton made clear that he’s in no hurry to sign off on the funds, saying such a move would be seen as “a tacit endorsement” that he is not yet ready to make.

Though some of the legal and jurisdictional issues are novel or are still being worked out, the CFTC claims some authority over actual digital currencies -- which it classifies as commodities -- and derivatives, such as futures, tied to them. The SEC is responsible for regulating securities that are comprised of digital tokens. That includes so-called initial coin offerings, which were used to raise an estimated $3.7 billion last year even though some of the companies behind them have laid out scant business plans.

In an ICO, a firm sells digital tokens that can eventually be redeemed for goods or services. The coins can be traded in a secondary market -- which the SEC says makes them securities and subject to its oversight. In the case of an ICO, that would mean filing extensive documents detailing plans for the offering. The exchange it trades on would also have to be registered with the SEC. Thus far, no trading venue or ICO has taken those steps.

At the moment, the main way the SEC is trying to ensure compliance is through its enforcement arm. Already, the agency has formed a special group to dig into potential fraud and filed several high-profile lawsuits. Just this week, the SEC sued to halt a Texas-based ICO that claimed to have raised more than $600 million, using celebrities like former boxing champ Evander Holyfield to tout the offering.

‘More Cases’
“We have brought cases, and if people don’t change their ways we’re going to be bringing more cases,” Clayton said.

But there are limitations on the SEC’s reach, a problem that’s particularly vexing because there have been a spate of thefts across the globe involving hackers, who if they could be found, are likely to ignore U.S. subpoenas.

“If a U.S. person sends their money to a foreign country through the internet and it gets taken, there’s not much I can do about it,” he said.

For now, Clayton said the agency has all the power it needs to regulate crypto products. He added that SEC oversight will ultimately help the industry flourish.

“There’s no doubt in my mind that our regulatory framework is not holding back the promise of this technology,” Clayton said. “In fact, it could be the other way around.”