Rep. Patrick McHenry, the Republican leader of House Financial Services Committee is. AP
The House Republican leader is calling for crypto network developers to have the ability to raise funds using tokens.
Rep. Patrick McHenry supports a proposal from Hester Peirce, the SEC Commissioner, to give crypto start-ups more time to build networks.
McHenry introduced Tuesday's Clarity for Digital Tokens Act of 2020 on Tuesday.
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The House Financial Services Committee's top Republican would permit crypto developers to raise funds for their projects via token sales, without requiring them to comply with securities laws.
Rep. Patrick McHenry's Clarity for Digital Tokens Act of 2020 supports a "safe harbor" proposal from SEC Commission Hester Peirce. Her proposal would allow crypto startups to create "functional" or decentralized networks and use token sales to raise funds under a limited exemption from certain SEC regulations.
McHenry's bill amends the Securities Act of 1933 so that initial development teams can sell tokens without having to register them as securities offerings for at least three years. Networks would have to demonstrate decentralization by the time the three-year period ends. If they don't, the tokens must be registered as securities.
McHenry stated in a statement that "Unfortunately, the current regulatory framework threatens" to push this technology and the jobs created from it overseas. CoinDesk quotes McHenry saying this. My bill, which builds upon the outstanding work of SEC Commissioner Hester Perce, will provide legal certainty for digital asset projects once they are launched.
McHenry, however, wrote to Gary Gensler, SEC Chairman, Tuesday asking him to clarify the SEC’s crypto-asset agenda. He also asked a series questions, including: "In your opinion, does the SEC require additional legislative authority in order to regulate crypto trading platforms?"