The US Securities and Exchange Commission (SEC) already has a cryptocurrency task force, and now it's designated a crypto advisor. The Wall Street regulator has named Valerie A. Szczepanik to spearhead the application of securities laws to "digital asset technology and innovation" across cryptocurrencies and initial…
The US Securities and Exchange Commission (SEC) already has a cryptocurrency task force, and now it’s designated a crypto advisor. The Wall Street regulator has named Valerie A. Szczepanik to spearhead the application of securities laws to “digital asset technology and innovation” across cryptocurrencies and initial coin offerings (ICOs).
Her appointment seems apropos, considering that Szczepanik was the maiden SEC official to comment on ICO projects about a year ago when she urged ICO startups that if they wanted the industry to flourish, to keep investor protection at the forefront.
It’s a newly created position, with her official title being “Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation for Division Director Bill Hinman,” and it’s yet another sign of the resources that the SEC is pouring into the cryptocurrency space despite a lack of any specific regulatory framework.
“With her demonstrated skill, experience, and keen awareness of the importance of fostering innovation while ensuring investor protection, Val is the right person to coordinate our efforts in this dynamic area that has both promise and risk,” said SEC Chairman Jay Clayton in a press release.
Szczepanik is already leading the SEC’s distributed ledger technology (DLT) working group and is a cybersecurity veteran. The SEC is no doubt looking to harness her veteran status in securities laws and her knowledge about the cryptocurrency space. With her appointment, the SEC is either moving closer to announcing regulation or stalling.
Kathryn Haun, who is on the board of directors at Coinbase, said at the Code Conference in recent days that cryptocurrency and blockchain regulation remain years away, saying in a panel discussion: “We don’t want regulation to outpace understanding.” Chairman Clayton and lawmakers have echoed that sen timent, suggesting that they don’t want to issue any knee-jerk regulation that would interfere with innovation. Clayton has also said he hasn’t seen an ICO token that doesn’t fit the bill of a security.
Haun’s point appears to be that any early regulation is likely to become obsolete given the nascent nature of the blockchain and cryptocurrency space. But regulation can be updated, and to do nothing in the name of innovation could do more harm than good. Institutional capital has been sidelined until there are fewer grey areas in the cryptocurrency space, and some market watchers expect that regulation will be the catalyst for a market rally this year.
In the interim, the SEC is not waiting on the sidelines and has launched probes into ICOs and cryptocurrency exchanges alike. In recent days, the agency thwarted a fraudulent ICO dubbed Titanium Blockchain Infrastructure Services, which already raised $21 million in the United States and abroad.
The securities regulator is also dedicating a breakout session at its upcoming investor conference in mid-June to fintech including cryptocurrencies.
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Last modified: January 24, 2020 11:07 PM UTC