The SEC commissioner Hester Pierce wants the blockchain space and the regulators to work on an eased juridical framework for ICOs in the next three years.
During the recent industry conference in Chicago, the SEC Commissioner Hester Peirce proposed a new regulatory framework for ICO companies and unqualified investors.
Current securities laws don’t allow numerous ICO startups and similar firms to collect money from U.S. citizens. According to the law, almost any cryptocurrency, coin or token is almost a security. On Thursday, the SEC’s Hester Pierce added a proposal to extend the definition of ”accredited investor” to allow more trading among ordinary Americans.
The plan originally went live on 18 December 2019, in Washington D.C. It is not in the final version and must show whether digital assets fit into the securities definition. Over time, the properties of digital cash change, and Peirce thinks the regulation must include all the possible diversions.
The proposal comes after the SEC officially claimed that some of the digital assets have properties of securities. Traditional security investment is a risky deal, with lots of underwater rocks and tricks. However, the regulatory framework for ICO, IEO and even STO companies is only a matter of time and development.
The ICO Law Should Make it Through the Commission
According to Peirce, she sees the regulatory draft as the first sketch of many others, and seeks for community help:
“I see this proposal as a path forward that achieves the objective of getting token purchasers the information they need, but it is also just a sketch – a work in progress – that requires productive engagement from the public”
Thus the proposal is not official, it must gather formal opinions from other SEC Commissioners, including Chairman Jay Clayton. The current draft claims that the blockchain firms should receive a three years development term.
The goal is to create conditions where tokens are “distributed to and freely tradable by potential users, programmers and participants in the network”.
The SEC already deals with dozens of ICO startup founders. These include small-scale ICO scammers and the mastodons of the Internet market.
SEC Regulation Puts ICO Fraudsters to Prison
Yes, the SEC likes to double-check even people like Pavel Durov or Mark Zuckerberg. In the next three years, the market participants should decide on creating a central blockchain that will facilitate ICO’s. According to the plan, it is up to the blockchain startups and other businessmen to build conventional accounting. It can emerge as a usual database or a blockchain, but it must protect investors.
The ICO authors will have to publish their anti-fraud plan and understand the needs of their token’s buyers. Here, the money masters will enter information about fiduciary duties, the source code, its clarity, and quality. They will have to write lengthy posts about the company’s inner workings, milestones, etc.