SEC offers cryptomama regulatory holidays for token sales startups

US Securities and Exchange Commission (SEC) Commissioner Hester Pierce has long been known for herfriendly to bitcoin andcryptocurrency industry as a whole. She confirmed her position on Thursday, February 6, when she made an official proposal according to which regulatory holidays are introduced for startups that attract financing through the sale of tokens.

According to CoinDesk, the idea involvesregulatory holidays for three years from the moment of the token sale, Hester Pierce, who is often called «cryptomam», presented during the International Blockchain Congress in Chicago. According to the commissioner, this time should be enough for startups to develop their decentralized networks and communities without being distracted by regulatory problems.

Only after this time, Pierce stated,Regulators, primarily the SEC, should determine whether certain tokens belong to the category of securities. We are talking about the notorious Howie test.

At the same time, developers will have to prove during this time that they are really creating open source networks, as well as provide relevant reports.

“An analysis of whether a offered or sold token is a security is not fixed and finite for a digital asset,”– says the explanation for the proposal.

By this we mean that the token can havecharacteristics of the security at the time of launch, but develop to the point where it no longer meets the relevant definition. Ethereum and EOS projects — the most striking such examples, Pearce noted.

If the proposal will be supported by othersSEC commissioners, a strict set of rules will be established according to which startups will have to conduct their tokensales. This includes requirements for disclosing information about project participants, source code, and a number of other factors.

In addition, it is supposed to establish concepts such as “initial development group” and “network formed”.

Initial Development Team Leads Developmentnetwork during the first three years of the project, and each member of the group will also have to disclose information about itself, including work experience and the number of tokens at its disposal. In addition, such a group should independently provide conditions for the formation of liquidity when the token is circulated in the secondary market.

Organization of trading in the secondary market is usuallyis a characteristic of a security offer, however, Pierce noted, in the case of cryptocurrency tokens, you need to make sure that users and service providers will be able to exchange them using traditional or digital currency.

By a formed network is meant a network that is not controlled by any one person or organization, while maintaining operability.

Another important point, according to Pierce, isin that only startups that are guided by good intentions will have access to such a mechanism - it will be closed to violators. Also, they cannot be exempted from liability for fraud and other similar violations.

“The regulations on violators are not aimed atprojects that work diligently on its implementation, but do not succeed. Rather, it is intended to ensure that the SEC can sue a team that decides to trick token buyers by distorting or hiding critical information. We all know that there are many such “projects” polluting the cryptocurrency space ”,- she said.

Recall, earlier Hester Pierce said that in the future, cryptocurrencies could become "Internet money."