The United States Securities Commission (SEC) is divided among parties over regulating the crypto industry in general and the safe harbor proposal in particular, while a senior White House official says President Joe’s administration Biden is bracing for an even tougher position in the industry. And while two prominent commissioners know the industry well, one lawyer argues that the SEC’s actions are harmful overall.
Following the latest crypto-related remarks from SEC Commissioners Caroline Crenshaw and Hester Peirce, attorney Gabriel Shapiro Noted that, regardless of where the two land on the matter, their respective holds are “extremely knowledgeable”.
That said, while Crenshaw argues that existing laws are sufficient to manage human trust and the possibility of industry exploitation, Peirce argues that new laws are needed to address the risks of autonomous technology design.
And well-researched opinions can be correct from a certain point of view, Shapiro wrote. However, the SEC takes a different and harmful approach, he said:
Commissioner Crenshaw said in her Oct. 12 remarks that the technology that enables crypto – which is “a small but growing part of the economy” – as well as its potential, is positive. But, as expected, this came with a “but”.
“[I]It turns out that few digital asset projects have gone through the registration process. Many operate as if they weren’t subject to regulatory oversight, ”the Democratic Party member said.
Among the proposals that have been raised and against which Crenshaw has opposed is the ‘Safe Harbor’ proposal, which aims to allow crypto companies to offer tokens as part of initial coin offerings (ICOs). in accordance with the rules of the regulator. This proposal was supported by Commissioner Hester Peirce, member of the Republican Party.
“If a safe haven had been set up during the initial coin offering or the initial coin offering (ICO) boom of 2017 and 2018, I think the results would have been even worse for investors and the markets,” he said. said Crenshaw.
His take on crypto comes as SEC Chairman Gary Gensler continues to push for more registrations within the industry. Gensler took on the post in April, while Crenshaw became commissioner in August of last year.
Crenshaw said that,
“I don’t think a safe harbor that allows unlimited capital raising with only limited disclosures, and no registration requirements, is in the best interests of investors. Nor will it be effective in preventing a repeat of the excesses and failures of the recent past. [….] Instead of a port, I hope we can build a bridge.
In response to Crenshaw’s remarks, Peirce tweeted: “If the government wants to impose the law on crypto, it should behave legally.”
In his own remarks, dated October 8, Peirce discussed Gensler calls the crypto industry “Wild West”, offering a different take on it. Like the Old West, she said, the crypto frontier seems “pretty wild” at first glance – but, like the old West, “there is order and discipline to all this jolt and this tumble. Because crypto is built on code, the code itself serves as a regulator of conduct. “
“The safe harbor that I have proposed for token distribution events recognizes that there is uncertainty as to when crypto-asset offerings involve securities laws, but the prevailing attitude to the SEC is that there is clarity, so why bother with a Safe Harbor? The idea that there is clarity as to when cryptoassets are securities must surprise lawyers advising crypto projects that have grappled with this problem for years.
However, Crenshaw appears to have the backing of the ruling administration. Peter Harrell, Senior Director of International Economics and Competitiveness at the National Security Council, Recount The Wall Street Journal which: “You really see the [Joe Biden] the early administration of what we expect will be an ongoing and fairly aggressive effort to ensure that we understand and address all of the risks we see in the cryptocurrency space.
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