US lawmaker proposes safe haven for digital tokens in new bill

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North Carolina Representative Patrick McHenry has proposed a bill that would amend one of the laws governing the Securities and Exchange Commission to provide a safe haven for certain token projects.

In a “Clarity Draft for the Digital Token Act of 2021” submitted by the House Committee on Financial Services, McHenry proposed amending the Securities Act of 1933 to create a safe haven for token development teams. He suggested allowing projects to offer tokens without registration for up to three years, during which time teams would be given the opportunity to build a fully decentralized network.

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McHenry’s bill appears to build on an initiative from the Securities and Exchange Commission, or SEC, Commissioner Hester Peirce, which called for a safe haven for projects that raise money to build decentralized networks after the concept was first introduced in 2019. Pierce’s proposal similarly suggests giving network developers Three-year grace period to build a decentralized network without threats of legal action by the SEC.

“If approved, the proposed safe harbor could be the most innovative development for the US cryptocurrency market to date,” Pierce said in February 2020. A stake in the land in order to support U.S. access and acceptance of digital asset markets.”

The proposal comes on the same day that SEC Chairman Gary Gensler spoke to the committee about oversight of the government agency. McHenry said Gensler made “disturbing and contradictory” statements about crypto assets regarding SEC enforcement actions and regulatory scope.

“We need to nurture innovation and technology in this country, not send it abroad,” McHenry said. “this is the law […] It helps bring legal certainty to digital asset projects that we desperately need regulatory clarity to launch.”

Kristen Smith, CEO of the Blockchain Association, commend McHenry’s efforts to create a safe haven, with an emphasis on collaboration between innovators and regulators. The Chamber of Digital Commerce, a cryptocurrency advocacy group in the United States, She said The bill “has the potential to provide a clear and much-needed path forward for those creating new innovations and solutions that leverage digital tokens.”

Related: SEC chief doubles down, tells crypto firms ‘Come and talk to us’

McHenry — known to many in Congress as “Mr. Fintech” — has introduced several pro-crypto legislation, including the CFTC and SEC’s proposal to “create a Joint Working Group on Digital Assets” to address regulatory clarity in the crypto space. He also told fellow lawmakers that attempts to stop Bitcoin (BTC) were futile, as the cryptocurrency was an “unstoppable force.”