The United States Securities and Exchange Commission (SEC) recently hired its first ever crypto czar. That official, Valerie Szczepanik, is reportedly working actively on the bitcoin ETF issue while also determining the security status of crypto tokens.
As reported by CoinGape, Szczepanik is “interested in innovation” and is “trying to get firms to talk to authorities” about regulations within the crypto community – including the ongoing debate over approval of the bitcoin ETF and the continuing debate over the security status of digital tokens.
Szczepanik was appointed as the SEC’s first-ever crypto czar last month, shifting from the SEC’s enforcement division. With the crypto market growing into an $800 billion behemoth at its peak in December 2017, the SEC can no longer afford to ignore it. In response, the SEC has created a dedicated digital assets department and a crypto czar.
By all accounts, Szczepanik is becoming an active participant in the crypto community as it seeks regulation from one of the world’s most influential financial regulatory bodies. She’s building partnerships within the community and fostering a transparent, communicative environment:
“We want people to come talk to us. When I’m in meetings with folks, I want them to see me as someone who’s interested in communication and back and forth, and looking to encourage innovation that helps investors and the markets.”
The United States Securities and Exchange Commission Chairman Jay Clayton appointed Szczepanik to the position last month. Szczepanik’s position puts her in charge of handling cryptoasset regulations across divisions. Today, there are three main topics on Szczepanik’s plate, including:
- The Bitcoin ETF: To date, the SEC has rejected 15 straight bitcoin ETF proposals. At least 6 more ETF proposals are scheduled to be approved, denied, or delayed over the coming months. A bitcoin ETF would transform crypto markets overnight. However, it would also signal that the SEC is approving the crypto industry, which is why it’s a big decision.
- Initial Coin Offerings: Another key issue for Szczepanik is to decide whether initial coin offerings (ICOs) constitute the unlicensed sale of securities. The SEC is taking steps to regulate the ICO space after a surge in ICO funding in 2017 and 2018.
- Are Tokens Securities: Szczepanik will also work to answer the integral question of the crypto community today: are tokens securities? Or are they something else? It’s possible that the SEC will regulate some tokens – like Ripple – as securities while letting other tokens – like bitcoin – function in a similar way to currencies or physical assets.
Who Is Valerie Szczepanik? How Does She Feel About Crypto?
Szczepanik is a 20-year veteran of the SEC. According to Bloomberg, Szczepanik is no stranger to the crypto industry: she’s been exploring cryptocurrencies on behalf of the SEC for the past six years.
“A few of us really were digging in,” Szczepanik said, as reported by Bloomberg. She then added her views on reading a whitepaper from a crypto project: “if this ever actually gets deployed into the universe, then the SEC will be very busy.”
Szczepanik also appears to favor a compliance-based approach. She wants to build regulations that encourage compliancy. If firms can’t stay complaint, however, then the agency will need to adopt “a different tack”:
“What we’re hoping is people will want to come into compliance. If there’s no effort to do that, if instead folks choose to ignore applicable laws, we might take a different tack.”
Overall, Szczepanik’s appointment is seen as good news for the crypto industry, and many welcomed the announcement. Today, she appears to be fostering an open, communicative relationship with key members of the crypto industry, helping to create regulations that are equitable for everyone involved while still being compliant with US securities laws.
Some are hoping Valerie Szczepanik takes a similar stance to her colleague, SEC commissioner Hester Peirce, who announced last week that she was dissenting from her employer’s rejection of the Winklevoss bitcoin ETF. Peirce believes the bitcoin industry is ready to handle a bitcoin ETF.
It’s unclear whether or not Szczepanik feels the same way about approving a bitcoin ETF – but we might not have to wait long to find out.