Editor's Note: This article comes fromBlocklike（ID：iblocklike）, Odaily is authorized to publish.
Editor's Note: This article comes from
, Odaily is authorized to publish.
This article is translated from an interview with Hester Peirce, commissioner of the US Securities and Exchange Commission (SEC), published by the digital asset information platform securities.io. The two discussed the current landscape of digital assets and how the SEC can create a clearer path for those in this space. This interview discusses valuable information and direction on security tokens, digital assets, and digital securities.
Because of Hester Peirce's forward-looking views, promoting the progress of reasonable encryption regulatory solutions, and his friendly attitude towards the development of the encryption community, Commissioner Peirce is affectionately called "encryption mother" in the encryption community.
NOTE: The opinions expressed by Commissioner Peirce are personal and do not necessarily represent those of the SEC or other commissioners. For clarity, the following interview has been edited.
Recently, Commissioner Peirce unveiled the Safe Harbor proposal for tokens (proposed Section 195 of the Securities Act), a deliberate proposal to bridge the gap between regulation and decentralization. The bill requires the disclosure of specific information about projects and development teams, preserves the SEC's anti-fraud powers over token sales under Safe Harbor, and excludes bad actors. At the same time, in order to avoid being defined as a security after the end of the security period, Peirce believes that the network must be sufficiently decentralized, which means that it cannot be controlled and changed by any individual, group or entity under common control, or that the network system functions sexual.
Rebecca Stoner (hereafter referred to as RS): For those trying to determine whether their token belongs to UT or ST, what do you think are the three most important factors?
（https://www.sec.gov/）（https://www.sec.gov/）
Hester M. Peirce (Hereinafter referred to as HP): I suggest you go through the Howey test to determine, think about it, do you promise investors that you will act as a promoter to promote the value of the token? You need to study the Howey test carefully to determine which side you are on.
Learn more about the Howey test from the SEC website:
RS: If a business model is to be defined as a security, what should be the first steps that the project and the SEC should take?
HP: I would very much encourage them to contact the SEC as soon as possible, especially FinHub, which can be found on the SEC's website. You can meet us in person or connect by phone.
If they are interested in me, they can learn from my staff that there are things to consider, as mentioned in the first question, "how to determine whether it is a security" question. Although my staff will not provide you with direct legal advice, they will provide you with the things you should really consider when issuing a token, such as clarifying its attributes, what to do next, and so on.
Those who need to set up a meeting with the SEC or speak with SEC staff can fill out the request form here, or contact Commissioner Peirce's office directly at CommissionerPeirce@sec.gov.
RS: On the SEC website, there are still relatively few mentions of digital securities products. In your opinion, do STOs better protect investors than ICOs?
HP: I analyze each token offering on a case-by-case basis, so it's hard to make general statements. I think people need to pay more attention to how things land, if it is a security, then you need to figure out whether you want to register the issuance or use an exemption, and figure out which exemption is suitable for its development.
It is difficult to say clearly that STO is better than ICO, and vice versa. We need to discuss based on facts and background. Every proposal we look at must be handled according to the value of the issuance itself.
RS: Should investors be as cautious about STOs as they are about ICOs?
HP: This situation is no different than any other situation, if you bet a lot of money on something, whether it's a new car, or a token, or a stock, or a bond, you Both start with asking a lot of questions - if you can't get the answers you think you want, or say you don't have reasonable answers, then you probably don't want to make the investment yourself.
Whether digital assets or traditional securities, some red flags apply to any purchase or investment.
RS: I know Malta is doing a lot of incremental regulation of blockchain and digital assets, and I think that helps steer people in a better direction.
HP: We are seeing, for example, Malta, Switzerland and some other jurisdictions taking a forward-looking approach. I think we can learn from these practices. I also hope that we can be at the forefront, but other regions are thinking about these issues, which is not a bad thing, and we can learn from them - regulators can also take the form of crowdsourcing.
RS: You have been outspoken about the US SEC taking a wait-and-see approach to ICOs and digital assets. Many ICO and digital asset industry practitioners also hope that the US SEC can quickly carry out supervision, so that they no longer need to be in a "grey area". What can you tell these people?
I have put forward the proposal of "Safe Harbor", I hope everyone can take a look. This only touches on one of the many regulatory issues that lack clarity in the US. I hope everyone will give me feedback and we can develop something that works. "Safe Harbor" proposes the following:
The proposal details five conditions that teams must meet to use the time-limited exemption from federal securities laws:
First, the team must formulate a plan to reach a mature network within three years of the first sale of tokens, and propose a sincere and reasonable operation method to achieve this goal.
Second, the team must disclose key information on a freely accessible public website.
Third, tokens must be issued and sold on the premise of the following points: access to, participate in, or help the development of the main network.
Fourth, the team must create liquidity for users in an honest and reasonable manner.
Fifth, teams must complete and submit a form: Notice of Authenticity of Testimony.
The proposal is currently underway.
RS: Last month, the SEC filed a bill to revise the definition of "accredited investor." Can you tell us more about the changes? How do you think they benefit the digital asset and ICO industry?
HP: This change is for institutions, not individuals, to the accredited investor category. Since this is essentially a measure of personal financial maturity based on one metric: how wealthy you are, whenever we talk about accredited investors, we get some negative feedback. There has been a lot of feedback that they would like to see the "individuals" in the accredited investor category expand and demonstrate their knowledge of finance in other ways.
Discussions here are open for comments, and people can express their views on this, otherwise, most proposals will only change the entity side.
RS: Can the public comment on the changes to accredited investors in the proposal?
HP: Of course, comments can be submitted by mail. We certainly welcome your feedback, and I hope our proposals will reach as many people as possible.Details of the proposed amendments to the definition of qualified investors can be found at:revision "
a proposed definition of ";
SEC Press Release - US SEC Proposes Update to Qualified Investor Definition to Increase Investment Opportunities
The deadline for feedback on the proposed Accredited Investor Definition is March 16, 2020.
RS: Currently, companies can legally raise up to $1.07 million through crowdfunding, which is not a lot for some tech industries in today's environment. Companies with a market capitalization above $1.07 million have few frugal options when it comes to legal fundraising, and an IPO for a company can be extremely demanding and costly. Some people have addressed this gap with ICO/STO/IEO, what is your opinion on this?
HP: I also believe that the potential of "crowdfunding" has not yet been fully tapped. This issue has been around for a while, and we need to decide on a case-by-case basis whether we need to adjust how we operate, and what steps to adjust.
We at the SEC have an Advisory Council of Small Businesses and meet regularly, this is a group of people from outside the SEC who have experience with small business financing, who will provide us with valid information, propose how to improve and amend existing regulations, or A new exemption type for those trying to raise money.
Through this small committee, we are working to make crowdfunding work better. People have been getting creative with how they raise money, and I think you're right that some see token-based products as an alternative to crowdfunding. If they're doing that, they'd better think hard about whether the securities laws apply to what they're doing.
RS: IEOs have increased over the past six months or so; I noticed that the SEC recently issued an investor alert on IEOs, which is helpful for investors who don't know much about IEOs. I know that some IEOs are trying to make their projects sound more official.
HP: Yes, a lot of people like to do that. I've often said that I wish the SEC would be more open to people raising money and investing in projects, but I also want people to know that it's not the SEC that signs the investment agreement. So when you invest in something, you as an investor decide for yourself whether it is a good investment or not. No matter how official something may seem, don't assume it's been pre-approved or cleared by the SEC.
RS: This is great advice for many newcomers to investing in this industry.
RS: The New York Stock Exchange existed and operated for more than 100 years before the US SEC was established. If the public has been able to trade successfully on unregulated exchanges for so long, is it possible for people to successfully self-regulate the ICO industry before the SEC makes proper regulation?
HP: There are many ways to regulate. Americans choose to use a combination of self-regulation, government regulation and quasi-government regulation to manage the securities market. This may sometimes be overlooked by government regulators like myself, but I have this point: Some regulation is natural, the market will regulate itself, self-regulate. We have seen that certain forms of self-regulation can be quite effective in the securities industry. That is to say, we have a framework of government regulators (that is, the SEC), and we are the regulators who make the rules. When people act within our purview, there should be interaction between what happens and us.
So you can't be doing something that's under our jurisdiction and say, "I'm going to self-regulate, that's a substitute."
RS: In the past few years, I have noticed a huge change in the digital asset field: practitioners are adjusting themselves, business is more professional, and people are asking better questions. Many people want further regulation from the SEC so they can better do things within the law.
HP: I understand. We also hope to achieve such a scenario, making it easier for people to do the right thing and do it in a compliant manner.
However, it is not easy to achieve this. As far as our current securities law is concerned, it is still very difficult. But we can at least try to alleviate some of the difficulty.
RS: Do you think these regulations will become easier to enforce in the next year or two?
HP: I think there is hope, which is why I put forward the "Safe Harbor" proposal, and let more people think about this issue.
There's some complexity in the U.S. regulatory infrastructure, and we have a lot of different regulators who have an interest in this space at the same time. So even if the SEC has something to say, other regulators may have something else to say.
We also have inter-governmental cooperation, and I think we may hear more calls for friendly and close inter-governmental cooperation.
RS: Is there anything else you would like to share?
