As a commissioner of the U.S. Securities and Exchange Commission (SEC), Hester Peirce, nicknamed 'Crypto Mom', clearly stated at the SEC Speaks annual conference on May 19 that most crypto assets, including stablecoins, meme coins, and NFTs, are fundamentally not securities. Peirce also proposed a Safe Harbor system to provide new crypto projects a compliance period, allowing operators breathing space to develop product functionalities and decentralization without being deemed as illegally issuing securities from the start.
New SEC Chair Atkins strongly supports, and the Crypto Task Force is taking proactive actions.
Currently under the support of new SEC Chair Paul Atkins, the 'Crypto Task Force' led by Peirce has initiated the following actions:
Held 4 roundtable discussions, with the 5th scheduled for June.
Received over 100 written comments from the industry.
Conducted over a hundred meetings with industry representatives and scholars.
Continuously releasing legal guidelines covering mining and digital asset custody.
Revoke outdated policies.
Assist Congress in drafting legislation in line with the White House's cryptocurrency policy direction.
Most crypto assets are not securities, including stablecoins, meme coins, and NFTs.
Peirce clearly stated:
Most crypto assets in the market do not constitute securities.
She also elaborated on which coins belong to 'non-securities':
Stablecoins: primarily used as payment tools, not involving investment returns.
Meme coins: value is composed of culture and community consensus, not relying on a specific company's profit, and not having an economic dependency.
NFT: Creators can collect resale royalties through smart contracts, but buyers do not enjoy profit-sharing from the creator.
Utility Tokens: used only as tools for utilizing agreements or applications, not relying on third-party profits.
The 'Safe Harbor' assists operators in safely transitioning, avoiding illegal status upon launching.
Peirce also reminded that if a certain crypto project:
If tokens are presold before the agreement is online and decentralized, and there are commitments to future functionalities and developments, this transaction is likely to constitute an 'investment contract' and may violate securities law.
In response to the above issues, she proposed a Safe Harbor mechanism to provide operators a safe transition:
Provide a buffer period for crypto projects: for example, three years.
During the buffer period, as long as they meet information disclosure obligations: such as project progress, team structure, use of funds, etc.
Can temporarily exempt from the cumbersome registration processes in securities law.
Allow operators a buffer period to launch functionalities and decentralization without being immediately penalized.
Even if early issuances involve investment contracts, as long as the tokens are launched and freely circulated in the trading market, subsequent transfers will no longer be subject to securities law.
The SEC will gradually issue clear guidelines on NFTs, staking, and airdrops.
Peirce emphasized that clear guidance will be provided for crypto assets and yield mechanisms, including:
Do creator NFT earnings constitute securities earnings?
Are airdrops considered fundraising?
Does participation in staking involve the Howey Test, i.e., whether investors expect to make money based on the efforts of others?
Tokenized securities and non-securities coexist, and the market needs clear rules to maintain order.
Peirce pointed out that traditional assets like stocks and bonds, even when tokenized on-chain, still belong to securities and must be regulated.
However, the market also contains a large number of non-security-type crypto assets, such as:
Utility Tokens
Stablecoins
Community Tokens
These two types are bound to coexist in the same market; the SEC should establish clear and predictable guidelines for this 'dual system' rather than adopting a one-size-fits-all, comprehensive suppression approach.
This article is reproduced with permission from: (Chain News)
'Crypto Mom: Stablecoins, Meme Coins, NFTs are not Securities! Compliance Transition Plan to be Launched' was first published by 'Crypto City'.