Speaking at the SEC Speaks conference, U.S. Securities and Exchange Commission (SEC) member Hester Peirce has proposed a new regulatory approach to crypto assets, calling for a time-limited “safe harbor” for cryptocurrency projects.
Hester Peirce: A New Regulatory Era for Crypto Assets
Peirce’s proposal suggests that crypto assets considered as investment contracts could be exempt from SEC registration obligations for a limited time if they meet transparency and investor protection requirements. During this period, projects would have the opportunity to enhance functionality or decentralize their networks. Peirce also advocates for exceptions for assets like airdrops, NFTs, and certain stablecoins, arguing that they should not be classified as securities.
As the newly appointed Chair of the SEC’s Crypto Task Force, Peirce emphasized the need for clarity in crypto regulation. She criticized the commission’s past actions for creating uncertainty in the industry and driving entrepreneurs away from the U.S.
“The lack of clarity on when a crypto asset transitions from an investment contract to an independent asset is a major challenge in the crypto space,” Peirce explained, emphasizing the importance of defining clear criteria for this transition.
Peirce highlighted the need for a regulatory framework that balances investor protection with innovation. She suggested that while initial coin offerings (ICOs) may be classified as securities, assets that evolve to become functional or decentralized should no longer be subject to the same regulations.
Under the proposed safe harbor framework, issuers would be required to disclose their commitments publicly and update investors on progress towards technical functionality and decentralization goals. Peirce also called for a specialized exemption regime to prevent token distributions, especially airdrops, from being treated as registered sales.
*Please note that this content is for informational purposes only and should not be considered as investment advice.