Commissioner Peirce of the SEC, who is often referred to as “Crypto Mom” in the community, has a plan for the crypto community. She recently proposed a regulation-free grace period for the crypto community.
Peirce is the fiercest crypto advocate in the SEC and she wants to give firms the ability to sell their crypto tokens while being exempt from the SEC’s tough rules. However, the current head of the SEC is unlikely to back this ambitious plan.
Crypto Regulation - More Conservative Approach
According to Bloomberg, Hester Peirce made the remarks on Thursday. She is a Republican commissioner and has been an ardent supporter of crypto tokens for years. Her plan would allow firms to trade their crypto tokens for three years before most of the securities laws governing their operations would apply. Additionally, crypto exchanges and brokers would be given far-reaching exemptions from the laws that govern trading in securities and stocks.
This plan is contrary to the sentiments of Jay Clayton, the chairman of the SEC who is the man responsible for steering the SEC agenda. His policies at the helm have frustrated the ICO sector in the US due to his stringent regulation of token sales. In past statements, Clayton has said there is a need to regulate the crypto industry aggressively due to the prevalence of fraud. Numerous token issuers have been given cease and desist orders or prosecuted in court for holding unregistered token sales. One of the most notable examples is the Telegram token sale. The SEC is currently embroiled in a legal tussle with Telegram over its token sale.
Crypto Startups Struggle Under Current Regulations
The remarks by Peirce were made at an International Blockchain Congress conference, which took place on Thursday in Chicago. According to her speech, applying the traditional regulation used by the SEC to the nascent crypto sector had made it difficult for honest startups to raise funds to get their projects going. To counter this problem, she wants the SEC to limit its jurisdiction over token sales to just anti-fraud monitoring and full disclosure rules.
She said that the existing rules prevent innovation in the digital assets space. Peirce said that the fear of breaking securities laws was real. Based on the recent activities of the SEC in this sector, this fear was merited.
According to Peirce, her proposed three-year break would provide businesses with the time they needed to get their projects off the ground without the risk of breaking the law. However, the grace period would only be extended to firms in the crypto sector. Those selling traditional securities would not enjoy such protection.
Possible But Unlikely
Commissioner Peirce’s proposal is unlikely to see the light of day during Chairman Clayton’s tenure. However, it is encouraging to see that there are crypto supporters within the upper echelons of the SEC. With time, such a proposal could gain traction as the crypto sector matures and its benefits to the global economy become obvious. While the SEC’s change of tact would be good, the real positive impact for the crypto sector in the US would be felt if Congress passed a supportive bill to regulate crypto.
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