A bill proposed by the top Republican on the House Financial Services Committee would allow crypto developers to raise money for their projects through token sales without subjecting them to certain securities laws.
The Clarity for Digital Tokens Act of 2021 from Rep. Patrick McHenry supports a “safe-harbor” proposal by SEC Commission Hester Peirce. Her proposal would allow crypto startups developing “functional or decentralized” networks to use token sales to fundraise under a limited-time exemption from certain SEC regulations.
McHenry’s bill would amend the Securities Act of 1933 to allow initial development teams to sell tokens without registering them fully as a securities offering for three years. By the end of that time, networks would be required to show decentralization or the tokens will have to be registered as securities.
“Unfortunately, our current regulatory framework threatens to push this technology – and the jobs created by this rapidly growing industry – overseas,” CoinDesk quoted McHenry as saying in a statement. “My bill, which builds on the great work of SEC Commissioner Hester Peirce, will help provide the necessary legal certainty to digital asset projects when they launch.
McHenry, meanwhile, in a letter to SEC Chairman Gary Gensler on Tuesday asked the agency leader to clarify the SEC’s crypto-asset agenda, posing a series of questions including: “In your view, does the SEC need additional legislative authority to regulate crypto trading platforms?”