• Latest
Hester Peirce: Tell Me How to Improve My Safe Harbor Proposal

Hester Peirce: Tell Me How to Improve My Safe Harbor Proposal

Februar 18, 2020
6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine

6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine

März 31, 2023
Judge denies SEC motion to keep Hinman docs secret in Ripple case

Judge denies SEC motion to keep Hinman docs secret in Ripple case

März 31, 2023
The ultimate guide to Miami – Cointelegraph Magazine

The ultimate guide to Miami – Cointelegraph Magazine

März 31, 2023
Dr. Jane Thomason – Cointelegraph Magazine

Dr. Jane Thomason – Cointelegraph Magazine

März 31, 2023
1658007797 celsius is bankrupt with 12b balance sheet hole su zhu.jpg

Celsius is bankrupt with $1.2B balance sheet hole, Su Zhu returns to Twitter and OpenSea purges 20% of employees: Hodler’s Digest, July 10-16

März 31, 2023
6 Questions for Lisa Fridman of Quadrata – Cointelegraph Magazine

6 Questions for Lisa Fridman of Quadrata – Cointelegraph Magazine

März 31, 2023
Jed McCaleb empties XRP wallet after eight-year selloff

Jed McCaleb empties XRP wallet after eight-year selloff

März 31, 2023
Celsius has finally filed for bankruptcy: Law Decoded, July 18-25

Celsius has finally filed for bankruptcy: Law Decoded, July 18-25

März 31, 2023
The ‘godfather of crypto’ risked lifetime in jail, laying foundation for Bitcoin – Cointelegraph Magazine

The ‘godfather of crypto’ risked lifetime in jail, laying foundation for Bitcoin – Cointelegraph Magazine

März 31, 2023
SEC objects to XRP holders aiding Ripple defense

SEC objects to XRP holders aiding Ripple defense

März 31, 2023
Blockchain technology is transforming the real estate market – Cointelegraph Magazine

Blockchain technology is transforming the real estate market – Cointelegraph Magazine

März 31, 2023
1658612147 nfts banned in minecraft sec lists 9 tokens as securities.jpg

NFTs banned in Minecraft, SEC lists 9 tokens as securities and 3AC founder blames cockyness for company meltdown: Hodler’s Digest, July 17-23

März 31, 2023
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
CoinNewsDaily
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
CoinNewsDaily
No Result
View All Result
Home Tech

Hester Peirce: Tell Me How to Improve My Safe Harbor Proposal

coinnewsdaily by coinnewsdaily
Februar 18, 2020
in Tech
0
Hester Peirce: Tell Me How to Improve My Safe Harbor Proposal
189
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Hester Peirce is a Commissioner at the Securities and Exchange Commission. The views here are her own and do not necessarily reflect the views of the SEC Commission or her fellow Commissioners. She can be contacted at [email protected].

Earlier this month, I proposed a securities law safe harbor for token distributions. My motivation was the fear that many crypto entrepreneurs have: that a token distribution might be deemed by my agency – the SEC – to be a securities offering.  How, then, is a would-be network supposed to mature into a functional or decentralized network? Network effects are unlikely to take hold until tokens are distributed to, and freely transferable, among potential users, developers and participants of the network. The securities laws cannot be ignored, but neither can securities regulators ignore the conundrum our laws create.

Related articles

Bankman-Fried faces down roomful of futures industry insiders at CFTC roundtable

Bankman-Fried faces down roomful of futures industry insiders at CFTC roundtable

Mai 25, 2022
Central African Republic to launch official crypto hub ‘Sango’

Central African Republic to launch official crypto hub ‘Sango’

Mai 24, 2022

The safe harbor seeks to balance the objectives of protecting token purchasers and providing the regulatory flexibility that allows innovation to flourish. Accordingly, the safe harbor protects token purchasers by requiring disclosures tailored to their needs, preserving the application of the antifraud provisions of the securities laws, and enabling purchasers to participate in networks of interest. The safe harbor also provides network entrepreneurs the time and regulatory flexibility to build their networks. 

Underlying the three-year grace period is a premise that the nuances and ambiguities in determining whether a token transaction represents a security transaction exist primarily in the earlier stages.

The safe harbor would provide network developers with a three-year grace period – exempted from the registration provisions of the federal securities laws – within which they could facilitate participation in and the development of a functional or decentralized network, so long as the following conditions are met:

  • The team must intend for the network to reach network maturity –defined as either decentralization or token functionality – within three years of the first token sale and undertake good faith and reasonable efforts to achieve that goal.
  • The team would have to disclose key information on a freely accessible public website.  
  • The token must be offered and sold for the purpose of facilitating access to, participation on, or the development of the network.  
  • The team would have to undertake good faith and reasonable efforts to create liquidity for users.  
  • The team would have to file a notice with the SEC to rely on the safe harbor.

When I announced the safe harbor, I emphasized that it is a work in progress, one that would benefit from the power of decentralized wisdom. The thoughtful discussion I had hoped the proposal would prompt has begun already. Reactions have ranged from enthusiastically supporting it, to dismissing it as unnecessary.  Suggested improvements include clarifying how the safe harbor interacts with the laws of other domestic and foreign jurisdictions, allowing issuers to provide liquidity directly rather than through a third-party trading platform, and recasting the safe harbor around specific contractual obligations. Briefly, I will address two emerging themes in the conversation.  

First, some commentators have worried that the proposal would reignite the 2017 ICO craze. The safe harbor is designed to provide a safe path forward for legitimate projects and to make attracting funds more difficult for fraudulent projects. The safe harbor requires the disclosure of specific information about the project and development team, preserves the SEC’s antifraud authority over safe harbor token sales, and excludes bad actors.  

“If this is it, please let me know . . . if this is it, I want to know.” If this is not it, I want to know that too.

A second area of concern is the lack of a bright-line test for whether a token is a security at the end of three years.  To avoid the securities classification at the end of the safe harbor period, the network would have to be decentralized, which means it is not controlled and is not reasonably likely to be controlled, or unilaterally changed, by any single person, group of persons, or entities under common control.  Alternatively, the network could be functional, which means holders can use the tokens in a manner consistent with the utility of the network.  

Underlying the three-year grace period is a premise that the nuances and ambiguities in determining whether a token transaction represents a security transaction exist primarily in the earlier stages of a development of a network. The lack of control over the network or the functionality of the network should be demonstrable within three years, and if not, the development team must be willing to take a clear-eyed look at the viability of the project as originally envisioned in light of our existing regulatory structures.  

My preliminary responses to these early concerns should not be taken as discouraging further dialogue on these and related issues. I continue to urge people – this time in the words of Huey Lewis and the News – “if this is it, please let me know . . . if this is it, I want to know.”  If this is not it, I want to know that too. Give me a call, send me an email, stop by my office, provide feedback at the SEC’s FinHub webpage, or post your comments online so that everyone else can see them too.  

Disclosure Read More

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.



Credit: Source link

Tags: Crypto Tech
Share76Tweet47
Previous Post

DeFi Project bZx Exploited for Second Time in a Week, Loses $630K in Ether

Next Post

Preston Byrne: Peirce’s Safe Harbor Proposal Would Be Hilarious If It Weren’t So Serious

coinnewsdaily

coinnewsdaily

CoinNewsDaily.com is an online Crypto Coin News Website that aims to provide latest trendy news from market and around the world.

Related Posts

Bankman-Fried faces down roomful of futures industry insiders at CFTC roundtable
Tech

Bankman-Fried faces down roomful of futures industry insiders at CFTC roundtable

Mai 25, 2022
Central African Republic to launch official crypto hub ‘Sango’
Tech

Central African Republic to launch official crypto hub ‘Sango’

Mai 24, 2022
South Korean police request exchanges freeze LFG related funds
Tech

South Korean police request exchanges freeze LFG related funds

Mai 24, 2022
Bitcoin stands apart from other crypto, and what that means for US public policy
Tech

Bitcoin stands apart from other crypto, and what that means for US public policy

Mai 22, 2022
Needed: A massive education project to fight hacks and scams
Tech

Needed: A massive education project to fight hacks and scams

Mai 21, 2022
Commonwealth Bank puts crypto trading trial on ice as regulators dither
Tech

Commonwealth Bank puts crypto trading trial on ice as regulators dither

Mai 20, 2022
Load More
Next Post
Preston Byrne: Peirce’s Safe Harbor Proposal Would Be Hilarious If It Weren’t So Serious

Preston Byrne: Peirce's Safe Harbor Proposal Would Be Hilarious If It Weren’t So Serious

Kategorien

  • Alt Coin
  • Bitcoin
  • Business
  • Ethereum
  • ICO
  • Litecoin
  • Mining
  • NFT
  • Ripple
  • Tech
  • Trading

What New here?

  • 6 Questions for Rene Reinsberg of Celo – Cointelegraph Magazine
  • Judge denies SEC motion to keep Hinman docs secret in Ripple case
  • The ultimate guide to Miami – Cointelegraph Magazine
  • About Us
  • Contact Us
  • Privacy & Policy

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

Please enter CoinMarketCap Free Api Key to get this plugin works.
✕
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev