{"id":125062,"date":"2020-02-10T10:25:48","date_gmt":"2020-02-10T10:25:48","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=125062"},"modified":"2020-02-10T10:26:25","modified_gmt":"2020-02-10T10:26:25","slug":"an-attorney-reviews-cryptomom-hester-peirces-plan-to-develop-a-framework-token-sales-could-it-work","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/an-attorney-reviews-cryptomom-hester-peirces-plan-to-develop-a-framework-token-sales-could-it-work\/","title":{"rendered":"An attorney reviews ‘CryptoMom’ Hester Peirce’s plan to develop a framework for token sales; could it work?"},"content":{"rendered":"

Last week, SEC Commissioner Hester Peirce<\/a> (aka \u2018CryptoMom\u2019) formally proposed a \u201csafe harbor\u201d for fundraising by token sale. Intended to \u201cbridge the gap between regulation and decentralization,\u201d the proposal would essentially make ICOs legal \u2013 with certain requisites.<\/p>\n

To find out more about this, CryptoSlate spoke to co-founder of Athena Blockchain<\/a> and adjunct professor at NYC Law Drew Hinkes. Nominated as one of CoinDesk\u2019s Most Influential People in Blockchain in 2017, Hinkes is also an attorney with Carlton Fields<\/a> as part of its National Blockchain and Digital Currency practice. Here\u2019s what he had to say.<\/p>\n

SEC Commissioner Hester Pierce's proposal is \u2018significant\u2019<\/h2>\n

How important is this safe harbor proposal and what does it mean for the development of the space? Hinkes confirms:<\/p>\n

\u201cIt\u2019s significant. Although one Commissioner\u2019s thoughts alone do not create the law, they do indicate that the SEC is taking the industry seriously and that some in the SEC are considering practical solutions to the complexities associated with selling tokens to raise funds to build functional networks.\u201d<\/p><\/blockquote>\n

He continues:<\/p>\n

\u201cAlthough it\u2019s unclear if adopted, this rule could signal a policy shift from \u201cHow do we apply the securities laws to protect consumers from token sales?\u201d to \u201cHow do we allow networks to develop into their functionality and use for non-speculative purposes without the securities laws getting in the way? Until it\u2019s adopted as a Rule, however, it remains one Commissioner\u2019s proposal.\u201d<\/p><\/blockquote>\n

\u2018Getting through\u2019 being a security to develop a product<\/h2>\n

The proposal would allow issuers to sell tokens without coming into conflict with securities laws, by allowing them to \u201cget through\u201d being a security. However, there are a few caveats.<\/p>\n

\n

or is this a new concept- that #crypto<\/a> networks that require token distribution to boostrap into some non -investment-focused purpose needs to "get through" being a security to develop into a product\/system that has an ultimate non investment purpose?<\/p>\n

— Drew Hinkes (@propelforward) February 7, 2020<\/a><\/p><\/blockquote>\n