Approval of spot bitcoin exchange-traded funds may necessitate the release of a third iteration of the Token Safe Harbor Proposal, Hester Pierce, a commissioner with the U.S. Securities and Exchange Commission, has said. The commissioner argued that it’s illogical to subject a nascent token project to the same disclosure rules applicable to a company with a 15-year history.
Recent Approvals of Spot Bitcoin ETFs May Prompt Release of Third Iteration of ‘Token Safe Harbor Proposals’ – Hester Pierce
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Token Safe Harbor Proposal 3.0
Hester Pierce, a Commissioner with the U.S. Securities and Exchange Commission (SEC), recently suggested that the approval of spot bitcoin exchange-traded funds could necessitate a third iteration of her Safe Harbour plan. Pierce, who has already released two versions of the Safe Harbour Proposal — the first in February 2020 and an updated one in April 2021 — did not directly confirm if she is planning to release a third version of her Token Safe Harbor Proposals.
Although she did not confirm or deny the rumors of a planned release of another revised version, Pierce acknowledged the importance of addressing the concerns of crypto skeptics. However, Pierce, who is also known as the crypto mom, also emphasized the importance of understanding the progress of legislation in this area.
As explained in her April. 13, 2021, statement, the Token Safe Harbor Proposal 2.0 sought to “provide network developers with a three-year grace period.” During this period, developers would be able to “facilitate participation in and the development of a functional or decentralized network.” Developers would also be exempted from federal securities laws on registration.
A few months after Pierce announced the release of the revised proposal, U.S. Representative Patrick McHenry introduced a bill embodying the SEC Commissioner’s proposals. Since then Pierce’s Safe Harbor proposal has not made much headway. However, the SEC’s recent spot bitcoin ETF approvals have reignited interest in Pierce’s proposal.
Importance of Addressing Innovators’ Concerns
Meanwhile, beyond addressing critics’ concerns, the SEC Commissioner also emphasized the importance of assuaging the fears of innovators who are ready to comply with regulations. The Commissioner argued that it’s illogical to subject a nascent token project to the same disclosure rules applicable to a company with a 15-year history.
“There is just a real mismatch between the expectations that some people would like to put on these token projects and the reality. And the result is that we end up with the worst of both worlds, we don’t get any disclosure and we get companies moving outside the United States,” Pierce argued.
She also noted that when entrepreneurs find themselves subjected to such regulations, it compels them to allocate an excessive amount of time contemplating these rules rather than focusing on innovative solutions.
What are your thoughts on Hester Pierce’s latest comments on her Safe Harbor Proposals? Let us know what you think in the comments sections below.
