In an interview, today on CNBC, U.S. Securities and Exchange Commission Chairman Jay Clayton made it clear they won’t bend the rules for cryptocurrency when it comes to the definition of a security.

“Cryptocurrencies: These are replacements for sovereign currencies, replace the dollar, the yen, the euro with bitcoin,” Clayton said. “That type of currency is not a security.”

“A token, a digital asset, where I give you my money and you go off and make a venture, you have some company you want to start, and in return for me giving you my money, ‘you can get a return’ in the secondary market, that is a security and we regulate that,” Clayton said. “We regulate the offering of that security and regulate the trading of that security.”

With their strong stance, the SEC continues to hinder the common person from readily participating in the early-stage investment community. I believe this will hurt the growth of US business in particular startups. The SEC’s positioning will only encourage startup growth to move or foster outside the US.

On the flipside, with clear guidelines from the SEC and less “grey-area,” we will undoubtedly see larger, more established companies leverage the ICO marketplace with “security tokens.” ICOs may be a clear alternative to additional rounds of fundraising from VCs or the ever-elusive IPO. Having a path to funding and liquidity can make them more attractive to accredited investors who normally don’t have access to early-stage companies.