The Securities and Exchange Commission has rolled out its new office dedicated to blockchain and digital assets just as Chairman Jay Clayton prepares to leave at the end of the year. However, Clayton has come under fire during his tenure from trade associations dedicated to the blockchain space as well.
In an editorial, Kristin Smith, Executive Director of the Blockchain Association, penned that, “As long as Chairman Clayton at the SEC is still around, I don’t think we’ll see a whole lot of progress at the SEC.” Smith further notes the success of companies like Block.one who raised $4 billion and then ultimately settled with a payment of only $24 million for an unregistered Initial Coin Offering (ICO). “I think Block.one was smart. The settlement they were offered was relatively small compared to how much money they raised,” said Smith.
As the Blockchain Association seeks to change laws and thus the rules by which crypto companies have to play by at the SEC, there are a couple of firms who have successfully thrived in what is considered a fairly challenging regulatory environment for blockchain and digital assets.
Individuals such as Muneeb Ali, Hiro Systems PBC (formerly Blockstack PBC) worked meticulously to offer the first SEC-qualified token offering in history where he raised $23 million. Although one million shy of the paltry fine paid by Block.one, Ali worked to demonstrate to the crypto industry that there were possibilities for successful navigation of complex regulatory requirements. His take on Clayton is that he “played it safe” during his tenure, and the SEC “…might take their time but people didn’t get away.” when describing those who offered ICOs that ran afoul of the SEC regulations.
From one first to another, Alan Silbert, Executive Managing Director at INX, the company that delivered the first ever SEC registered IPO, said “This is great news for the ecosystem and further solidifies that digital assets are here to stay in the U.S. This development should accelerate to market other security token IPOs that want to follow in INX’s footsteps.” Silbert further stated, “My hope is that this standalone group will also focus on providing much needed and overdue guidance for the space – most critically the issue of broker-dealer custody of digital assets that are securities.”
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Regarding where we go from here, Ali does share the idea that a lot will depend on who the new Chair will be at the SEC and how they will understand and approach blockchain and crypto. When asked if Commissioner Hester Peirce would be a good Chair, Ali stated, “Hester is very vocal and supportive of the crypto industry.”
As Silbert’s regulatory success at the SEC demonstrates the potential for a digital Wall Street while Ali helps Wall Street understand blockchain, surviving the gauntlet of regulation and enforcement during the ICO boom of 2017 certainly demonstrates their ability to thrive despite difficult regulatory hurdles.
Source: Forbes – Money