North Carolina House Representative Patrick McHenry proposed a bill that would amend the Securities and Exchange Commission laws to allow certain token projects to be protected.
McHenry proposed amending the Securities Act of 1933 in a draft of the “Clarity to Digital Tokens Act of 2020” that was provided by the House Committee on Financial Services. This would create a safe harbor for token developers. McHenry suggested that projects could offer tokens for as little as three years without having to register. After that time, teams would have the chance to build a fully decentralized network.
McHenry’s bill seems to be based on an initiative by Hester Peirce (Securities and Exchange Commission), who called for creating a safe harbour for projects that raise money to build decentralized networks. She first floated the idea in 2019 and has since continued to push for it. Peirce’s proposal also suggests that network developers be granted a three year grace period in order to create a decentralized network, without fear of legal action.
Peirce stated in February 2020 that the safe harbor would be the most significant development for the U.S. crypto market. The safe harbor is important in promoting American access to digital asset markets. It puts development first, and gives projects the runway to build strong networks.
This proposal was made on the same day that Gary Gensler, chair of the SEC, spoke to the committee about oversight of the agency. McHenry stated that Gensler made “concerning” and contradictory statements about crypto assets, which were related to the SEC’s enforcement actions.
McHenry stated that “we need to foster innovation and technology within this country, rather than sending it abroad.” “This bill […] provides legal certainty for digital asset projects, which we desperately need regulatory clarity to launch.
Kristin Smith, the executive director of Blockchain Association, expressed gratitude to McHenry for creating a safe harbour and emphasized the importance of collaboration between regulators and innovators. The Chamber of Digital Commerce in the United States is a crypto advocacy organization. It said that the bill could provide a clear path forward for people who are creating new innovations and solutions using digital tokens.
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McHenry, also known as Mr. Fintech — McHenry, who is known by many in Congress as “Mr. He also stated to his fellow legislators that any attempts to stop Bitcoin (BTC), were futile as the cryptocurrency was “unstoppable.”