SEC Commissioner Peirce Confirms Guidance on Crypto Tokens Is Coming

February 11, 2019
60 Views

The U.S. Securities and Exchange Commission (SEC) plans to clarify when securities laws might apply to crypto token sales, an official said Friday.

In a speech at the University of Missouri School of Law, Hester Peirce, one of the SEC’s commissioners, said that the agency’s staff are working on “supplemental guidance” to help projects determine “whether their crypto-fundraising efforts fall under the securities laws.”

While the Howey test – the U.S. standard for determining whether something is a security – generally provides clarity, she said, there is a “need to tread carefully” as token offerings do not always resemble traditional securities offering.

For instance, capital raised from decentralized token offerings could mean it is not truly owned or controlled by a company or person, unlike with traditional securities which are controlled by issuers or promoters, Peirce explained, citing a report from Coin Center.

The application of Howey test can also be “overly broad,” the commissioner added. She did not provide an idea as to when the guidance might be issued.

In November 2018, William Hinman, SEC director of corporation finance, also said that the regulator intends to release “plain English” guidance for developers on when and how crypto tokens may be classified as securities.

On the subject of cryptocurrency regulations, Peirce continued to say, “ambiguity is not all bad,” and that the delays in bringing regulatory clarity may, in fact, allow “more freedom” for blockchain technology to grow and projects to mature.

The commissioner further said that the SEC is also mulling whether new rules need to be put in place to regulate the crypto space, adding:

“If we act appropriately, we can enable innovation on this new frontier to proceed without compromising the objectives of our securities laws – protecting investors, facilitating capital formation, and ensuring fair, orderly, and efficient markets.”

Peirce argued that the SEC sometimes can be “impulsive” in dealing with crypto project and offerings. “We owe it to investors to be careful, but we also owe it to them not to define their investment universe with our preferences,” she said.

In July 2017, the SEC notably declared that securities laws could apply to some token sales, after an examination of ethereum-based project The DAO, which had collapsed in 2016 losing investors $60 million.

Hester Peirce image via CoinDesk archives

https://www.coindesk.com/sec-commissioner-peirce-confirms-guidance-on-crypto-tokens-is-coming

You may be interested

Blockfi Launches High-Interest Crypto Lending Program in India
Bitcoin
13 views
Bitcoin
13 views

Blockfi Launches High-Interest Crypto Lending Program in India

btcethereumadmin - April 25, 2019

US-based Blockfi has expanded into India, offering a high rate on its interest-bearing account for two cryptocurrencies. News.Bitcoin.com talked to…

How to Use Bitcoin.com’s New Point-of-Sale Solution — Bitcoin Cash Merchant
Crypto News
8 views
Crypto News
8 views

How to Use Bitcoin.com’s New Point-of-Sale Solution — Bitcoin Cash Merchant

btcethereumadmin - April 25, 2019

During the third week of April, Bitcoin.com released a new point-of-sale (PoS) service called Bitcoin Cash Merchant for Android operating…

Binance Singapore Launches But Offers Just One Trading Pair, Report
Bitcoin
46 views
Bitcoin
46 views

Binance Singapore Launches But Offers Just One Trading Pair, Report

btcethereumadmin - April 25, 2019

Users of Binance’s new Singapore platform are reportedly only able to purchase bitcoin using Singapore dollars during the “soft launch.”…

Leave a Comment

Your email address will not be published.