Interview with Crypto Mom SEC Commissioner Hester Peirce: Analysis of Safe Harbor Proposal

Compilation: Blocklike Lan Wen

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This article was translated from digital assets information platform and published an interview with the Securities and Exchange Commission (SEC) Commissioner Hester Peirce. The two sides discussed the current state of digital assets and how the SEC has opened a clearer path for people in this field. This interview focused on valuable information and directions on security tokens, digital assets and digital securities. As Hester Peirce promotes the development of reasonable crypto regulatory solutions through a forward-looking perspective and is friendly to the development of the crypto community, Commissioner Peirce is affectionately referred to as the "crypt mom" in the crypto community.

Note: The opinions expressed by Commissioner Peirce are personal opinions and do not represent the opinions of the SEC or other members. For accuracy, the following is an edited interview.

Recently, Commissioner Peirce announced the Safe Harbor proposal for tokens (proposed section 195 of the Securities Act), a well-thought-out proposal to bridge the gap between regulation and decentralization. The bill requires disclosure of specific information about the project and development team, retains the SEC's anti-fraud powers over token sales under Safe Harbor, and excludes bad actors. At the same time, in order to avoid being defined as securities after the end of the security period, Peirce believes that the network must be sufficiently decentralized, which means that it will not be controlled and changed by any individual, group or entity under common control, or that the network is functional Sexual.

Rebecca Stoner (hereinafter referred to as RS): For those who are trying to determine whether their token belongs to UT or ST, what are the three most important factors that you think?

Hester M. Peirce (hereafter referred to as HP): I suggest you pass the Howey test to determine, consider whether you promise to investors that you will promote the value of the token as a promoter? You need to study the Howey test carefully to determine which side you are on.

Learn more about the Howey test from the SEC website:

(Https:// ( (https: / /

RS: If a business model is defined as securities, what should be the first step for the project and the SEC?

HP: I highly encourage them to contact the SEC as soon as possible, especially with FinHub, which can be found on the SEC's website. You can meet us in person or by phone.

If they are interested in me, they can learn from my staff that things need to be considered, as mentioned in the first question, "how to determine whether it is a security". Although my staff will not provide you with direct legal advice, they will provide you with the things you should really consider when issuing a token, such as clarifying its attributes, how to proceed next, and so on.

People who need to meet with the SEC or talk to SEC staff can fill out the application form here or contact the Peirce Commissioner's office directly at

RS: On the SEC's website, there are still relatively few mentions of digital securities products. Do you think that STO can better protect investors than ICO?

HP: I analyze each token issue based on the specific situation, so it is difficult to make a general statement. I think that people need to pay more attention to how things happen. If it is a security, then you need to figure out whether you want to register for issuance or use an exemption, and figure out which exemption is suitable for its development.

It is difficult to say clearly that STO is better than ICO, and vice versa. We need to discuss based on facts and background environment. Every proposal we look at must be handled according to the value of the issue itself.

RS: Should investors treat STOs as carefully as they do ICOs?  

HP: This situation is no different from other situations. If you bet a lot of money on something, whether it is a new car, or a token, or a stock, or a bond, you First of all, you need to ask a lot of questions-if you can't get the answer you think you want, or you don't have a reasonable answer, then you may not want to make this investment yourself.

Whether it is digital assets or traditional securities, some red flags are applicable to purchases or investments in any situation.

RS: I know Malta is undergoing a lot of progressive regulation of blockchain and digital assets, and I think this will help guide people in a better direction.

HP: We are seeing a forward-looking approach in Malta, Switzerland and some other jurisdictions. I think we can learn from these practices. I also hope that we can be at the forefront, but other regions are thinking about these issues. This is not a bad thing. We can learn from them-regulators can also take the form of mass outsourcing.


RS: You have been outspoken that the U.S. SEC takes a wait-and-see attitude towards ICOs and digital assets. Many practitioners in the ICO and digital asset industries also hope that the US SEC can quickly regulate so that they no longer need to be in a "gray zone". What can you tell them?

I have already proposed the "Safe Harbor" and I hope everyone can take a look. There are many regulatory issues in the United States that lack clarity, and this involves only one of them. I hope everyone can give me feedback and we can develop something that works. The "Safe Harbor" proposal is as follows:


The proposal specifies five conditions that the team must meet to use the time-limited exemption under federal securities law:

First, the team must formulate a plan to bring the network where the token runs to reach a mature network within three years of the first sale of the token, and propose a sincere and reasonable operation method to achieve this goal.

Second, the team must disclose key information on a freely accessible public website.

Third, the following points must be issued and sold as a prerequisite: access to the main network, participation or help its development.

Fourth, the team must create mobility for users in an honest and reasonable manner.

Fifth, the team must complete and submit a form: Notice of Testimony Authenticity.

The proposal is currently in progress.

RS: Last month, the US Securities and Exchange Commission submitted a bill to modify the definition of "qualified investor." Can you tell us more about the change? How do you think they benefit the digital asset and ICO industry?  

HP: The change is for the organization and not the qualified investor category for individuals. Since this is essentially an indicator of the maturity of an individual's cognitive understanding of finance: that is, how wealthy you are, whenever we talk about qualified investors, we get some negative feedback. Many people have reported that they want to see the "individuals" in the qualified investor category expand, and they can prove their perception of finance in other ways.

The discussion here is open for comment, and people can express their views on it, otherwise most of the proposals will only change on the physical side.

RS: Can the public comment on the change of qualified investors in the bill?  

HP: Of course, you can submit comments by mail. We certainly welcome your feedback, and I hope our proposal will affect more people.

Details of the proposed amendments to the Definition of Qualified Investors are available at:

Proposed amendments to the definition of "qualified investor": ( SEC press release-US SEC recommends updating definition of qualified investor to increase investment opportunities : (Https://

The deadline for feedback to the proposed definition of qualified investors is March 16, 2020.  

RS: At present, companies can legally raise up to $ 1.07 million through crowdfunding. In today's environment, such startup capital is not much for some technology industries. In terms of legal financing, a company with a market value of more than $ 1.07 million has few other options to save, and a company has extremely high requirements for an initial public offering and also bears huge costs. Some people have already resolved this gap through ICO / STO / IEO, what do you think about this?

HP: I also think that the potential of "crowdfunding" has not yet been fully tapped. This problem has been around for some time, and we need to decide, depending on the situation, whether we need to adjust how it works and what steps we need to adjust.

We at the SEC have an advisory committee of small businesses that meets regularly. This is a group of people from outside the SEC who have experience in small business financing. They will provide us with useful information on how to improve and amend existing regulations, or New types of exemptions for those trying to raise money.

Through this small committee, we are committed to making crowdfunding better. People have been very creative on how to raise funds. I think you are right. Some people see various products based on tokens as an alternative to crowdfunding. If they are doing this, then they had better think carefully about whether securities law applies to what they are doing.

RS: IEO has increased in the last six months or so; I noticed that the SEC recently issued an investor warning about IEO, which is helpful for investors who do n’t know much about IEO. I know that some IEOs are working to make their projects sound more formal.

HP: Yes, many people like to do this. I have often said that I want the SEC to be more open to people's fundraising and project investment, but I also want to let people know that, relative to the investment agreement, it will not be the SEC. So when you invest in something, as an investor, you have to decide for yourself whether this is a good investment. No matter how formal it may seem, don't take it for granted that it has been pre-approved or cleared by the SEC.

RS: This is great advice for many newcomers to the industry.  

RS: The New York Stock Exchange had existed and operated for more than 100 years before the establishment of the US SEC. Given that the public can successfully trade for such a long time on an unregulated exchange, is it possible for people to successfully self-regulate the ICO industry before the SEC makes proper regulation?

HP: There are many ways to regulate. Americans choose to use a combination of self-regulation, government regulation, and quasi-government regulation to manage the securities market. This may sometimes be overlooked by government regulators like me, but I have the view that some regulations are naturally generated, and the market will self-regulate and self-restrain. We have seen that in the securities industry, certain self-regulatory approaches can be quite effective. In other words, we have a framework of government regulators (the SEC), we are the regulators that make the rules, and when people are acting within our area of ​​authority, there should be interaction between what happened and us.

Therefore, you cannot do things within our jurisdiction while saying, "I will monitor myself. This can be an alternative."

RS: In the past few years, I have noticed great changes in the field of digital assets: practitioners are adjusting themselves, businesses are more professional, and people are asking better questions. Many people hope that the SEC will further regulate so that they can better act in compliance with the law.  

HP: I understand. We also want to achieve a scenario that makes it easier for people to do the right thing and do it in a compliant way.

But it is not easy to achieve this, as far as our current securities law is concerned, it is still very difficult. But at least we can work to make it easier.

RS: Do you think these regulations will become easier to enforce in the next year or two?

HP: I think there is hope, which is why I put forward the "Safe Harbor" proposal and let more people think about it.

There are some complexities in the U.S. regulatory infrastructure. We have many different regulators who are also interested in this area. So even if the SEC does something, other regulators may have something else to say.

We also have intergovernmental cooperation. I think we may hear more calls for friendly and close cooperation between governments.


RS: Do you have anything else to share?

HP: No, you mentioned very well, it is right to focus on this issue: in our securities law, what is the direction of things, and how can we adjust him to help An area of ​​interest to understand.

When a project really wants to use the funds to do something reasonable, when someone wants to use the funds to do illegal things, think about it, we all want to provide a clear path for people who do the right thing, this Good for all of us.

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