SEC Commissioner Hester Peirce Releases Safe Harbor 2.0 for Token Sales with Three Significant Changes
On the new Chairman coming into the SEC, “Crypto Mom” said it is “the perfect time” to consider how to modify its rules “to accommodate this new technology in a responsible manner.”
Crypto-friendly SEC Commissioner Hester Peirce released an updated version of the token safe harbor proposal that she first suggested in Feb. 2020.
The safe harbor proposal that seeks to provide network developers with a three-year grace period to facilitate its decentralized nature in order to be exempted from the registration provisions of the federal securities laws now reflects constructive feedback provided by the crypto community, securities lawyers, and members of the public in the updated version, wrote Peirce.
Released on Github, Safe Harbor 2.0 has three significant changes to the previous version, which first involves enhancing token purchaser protection through semi-annual updates on the network development.
The other change is the requirement of an exit report which is in response to the concerns about the lack of clarity as to what will happen after the grace period is over. This report would include either an analysis by outside counsel explaining why the network is decentralized or functional or an announcement that the tokens will be registered under the Securities Exchange Act.
Another change proposed by Peirce is the exit report providing guidance on what the outside counsel should address regarding its decentralized nature “to strike a balance between providing a manageable number of useful guideposts while maintaining sufficient flexibility” for each network to do so.
In her public statement, Peirce further reiterated the hope around the new SEC Chairman, which she said,
“is the perfect time for the Commission to consider afresh how our rules can be modified to accommodate this new technology in a responsible manner.”