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6 December 2023
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SEC is working on new guidelines for cryptocurrency projects

A speech by a committee member of the US Securities and Exchange Commission (SEC) shows that the regulator is working on new guidelines. The guidelines should help cryptocurrency projects and investors to determine in which category a token falls.

Hester Peirce, committee member of the SEC and often positive about cryptocurrency, confirmed during a speech at the University of Missouri that the SEC is working on “additional guidelines”. It is often unclear whether a token should be considered as an effect or not, since the existing guidelines of the SEC have not yet been adapted to new developments such as the crypto industry.

With the Howey test, crypto projects can already determine whether their token should be considered an effect, but according to Peirce this has to be looked into. Not all crypto projects can be compared with issues of traditional effects (for which the test was originally intended).

During her speech Peirce also said that the SEC is investigating whether it should introduce new regulations specifically for crypto. Pierce said, for example, that the regulator must be careful not to introduce too many regulations:

If we act appropriately, we can enable innovation in this new industry without compromising the objectives of our securities laws – protecting investors, facilitating capital formation and ensuring fair, orderly and efficient markets.

According to Peirce, the lack of clear regulations for the crypto industry at the moment is especially beneficial for the crypto community. Because there are few guidelines and there is ambiguity, there is, according to her, a certain degree of freedom that many projects benefit from.

In July 2017, the SEC declared for the first time that securities legislation can be applied to certain tokens. It has since then been unclear in some cases which cryptos should and should not be regarded as effects. The new additional guidelines must put an end to this. Peirce did not mention an exact date when these new guidelines will be published.

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