SEC commissioners clash over ‘safe harbour’ for crypto

Caroline Crenshaw – United States Securities and Exchange Commissioner (SEC) –  has rejected fellow commissioner Hestor Pierce’s ‘safe harbour’ proposal for new digital tokens.

In her speech to the conference, she refuted the supposed benefits of a ‘safe harbour’ espoused by fellow SEC member Pierce.

Crenshaw argued that the offer of a ‘safe harbour’ for new tokens to be established before requiring regulation could potentially replay the Initial Coin Offering (ICO) boom of 2017 and 2018.

“ICOs and other digital asset offerings raised billions from investors, but most never delivered on their promises,” she said.

“I believe the ICO era excesses, the failure to register, failure to make robust risk disclosures, and failure to ensure fair markets free from manipulation, contributed to investor losses.”

ICOs were a popular method of distribution of digital tokens during the boom of 2017/18. Fewer than half of 2017’s ICOs existed for four months, while almost half had failed by February of 2018.

Commissioner Crenshaw’s rejection of the proposals by Donald Trump-appointed Pierce came after Congressman Patrick McHenry (NC-10) – Republican leader of the House Financial Services Committee – drafted legislation recommending a three year ‘period of grace’ for cryptocurrencies.

Speaking to Coin Rivet at the time, Congressman McHenry said: “The US should be a global leader, not a global follower when it comes to digital assets.

“Unfortunately, our current regulatory framework threatens to push this technology – and the jobs created by this rapidly growing industry – overseas.

“[The Clarity for Digital Tokens Act] is a pivotal first step toward embracing innovation and technology here at home, rather than playing catch-up to our competitors.”

The SEC clashes around cryptocurrency seem unlikely to end any time soon. The chief of the SEC Gary Gensler has chosen not to regulate cryptocurrency – going so far as to leave it off the regulatory agenda for the year.