SEC Commissioner Hester Pierce proposed a “safe harbor” for crypto projects that raise money before they are sufficiently decentralized.
I am a big fan of “safe harbors”and wrote a bit a few years ago about why I like them so much and why a crypto safe harbor is such a needed and good idea.
There is a chicken and egg problem in financing crypto projects. These projects need investment capital and community involvement/buy-in to get to market and begin the process of decentralization. But the SEC views crypto-tokens as securities until the crypto-networks are sufficiently decentralized. And so crypto projects get stuck in this never never land and have to craft crazy frankenstein financings or risk getting sued by the SEC (and/or both) in order to raise money and get their tokens in the hands of community members.
I encourage the SEC to take Commissioner Pierce’s proposal seriously and adopt a workable safe harbor for crypto projects here in the US. We have seen the crypto capital markets and so much of the innovation in the sector move offshore and a safe harbor would be incredibly helpful in getting it back onshore (I couldn’t help the nautical metaphor).
