The Commissioner of the SEC has proposed to make preferential a 3-year period for bitcoin startups

Commissioner securities and exchange Commission (SEC) Hester pierce, nicknamed the “scriptorama”, put forward the idea of creating a “safe Harbor” for ICO-projects, in accordance with which cryptotoken will not be considered as securities. However, the initiative will be time limited to avoid abuse.

At the International Congress of the block chain in Chicago, the pier has offered a three-year grace period for startups, specializing in bitcoin, so during this time they can debug the model of the fundraising token-based.

This proposal frees the developers of the block chain from certain requirements for licensing and registration that apply to other financial brokers, resulting in new deals tokens can be performed in the alternative mode.

ICO-projects created in this safe Harbor must meet certain requirements to disclose information. For example, any proposal must contain clear details about the source code and functionality of the token, including mechanisms to change the rights of owners and an explanation of how the funds are to be used. Only then, the Issuer may qualify for an exception to the General rules.

According to Pearce, the set of information includes data on the “team” that will monitor the life cycle of the project, until it reaches the “network maturity”.

Team members must also report their “names, relevant experience, qualifications and skills” as well as its assets in the tokens, including those that they made as part of any rewards programs or incentives.

SEC Commissioner added that “analysis of whether the proposed token as securities or not, is not static, and is not strictly relevant to the digital asset”.

Failure to comply can have serious consequences for the Issuer of the token and those who participate in the offer, provides investors with a right of cancellation.

“Enforcement of the SEC has played an important role in the fight against fraud in connection with the sale of tokens. Safe Harbor does not provide immunity from such actions”, — said pierce.

The provision is not directed at the teams who presented the network development plan and worked hard on its development, but for one reason or another are unable to implement their ideas. The objective of the position is to provide SEC an opportunity to file a lawsuit against the team, which intends to deceive buyers of tokens by distortion of key information.

Being one of the five members of the Supreme Executive body of the United States, a prominent advocate of cryptocurrency Pearce has called on fellow regulators to abandon its suspect approach and allow innovation to develop. Some of her suggestions are contrary to commonly accepted opinion of the SEC that Howie needs test applies to cryptocurrencies just like any other investment.

Howie test determines whether an asset is securities, according to three criteria:

  • First, the investment product can be exchanged for money.
  • Second, investments carry some risk.
  • Third, the assets must be traded.

Publication date 08.02.2020
Share this material on social networks and Express their opinions in the comments below.

Rate publication

Author: Vitalik

Leave a Reply

Your email address will not be published. Required fields are marked *