Safe Harbor Bill Proposed by US Lawmaker, Echoing SEC Commissioner Peirce

  • The Clarity for Digital Tokens Act, passed in 2021, would effectively formalize SEC Commissioner Hester Peirce’s Token Safe Harbor proposal
  • McHenry said, that unfortunately their present regulatory structure threatens to drive the technology, and the jobs produced by the fast-developing industry, abroad
  • The regulatory ambiguity has been suffocating innovation for years, resulting in an outflow of innovators from the US to nations with a clear legal framework

A leading Republican in the House of Representatives wants to make it simpler for crypto companies to seek funding without violating securities laws in the United States, making it easily attainable and safe. On Tuesday, a ranking member of the HFSC, Rep. Patrick McHenry, introduced a safe harbor bill ahead of a meeting with Gary Gensler, the Chair of the SEC. The Clarity for Digital Tokens Act, passed in 2021, would effectively formalize SEC Commissioner Hester Peirce’s Token Safe Harbor proposal, a pitch the regulator made in 2020 and 2021 to provide a framework for crypto companies to conduct token sales without fear of SEC’s action.

In a statement, McHenry said, that unfortunately, their present regulatory structure threatens to drive the technology, and the jobs produced by the fast-developing industry, abroad. His bill, which relies on the excellent work of the SEC Commissioner, Hester Peirce, would assist digital asset enterprises in gaining the legal clarity they require when they launch.

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McHenry has secretly introduced a number of crypto-friendly proposals, including one that calls for government agencies to form a working committee to clarify crypto laws in detail. According to the Peirce plan, these companies would have three years to register with the securities regulator or fulfill a series of standards to demonstrate that they are truly decentralized. McHenry’s bill follows Peirce’s tenets, including sections addressing when startups must register and how they may demonstrate that their initiatives no longer satisfy the government definition of security. 

The law includes a variety of disclosure measures, such as mandating companies to publish information about transactions and the secondary platforms where their tokens are traded. A section also says businesses attempting to raise money through an ICO must notify investors that the acquisition of tokens carries a significant degree of risk and the danger of losing money.

On Tuesday, industry supporters hailed the initiative in remarks. According to Perianne Boring, head of the Chamber of Digital Commerce, the law has the potency to check the threats to provide a way for crypto companies. According to Jerry Brito, executive director of Coin Center, the measure would change existing laws to account for the new realities for coping with the technologies. The regulatory ambiguity has been suffocating innovation for years, resulting in an outflow of innovators from the US to nations with a clear legal framework, safeguarding the employees in this domain, stated by the director of the Blockchain Association, Kristin Smith.

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Andrew Smithhttp://thecoinrepublic.com
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing

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