In fact, the “Clarity for Digital Tokens Act of 2021” bill appears to be a follow-up to SEC commissioner Hester Peirce’s proposal for a safe harbour for enterprises that raise financing to develop decentralised networks.
Significantly, Representative Patrick McHenry of North Carolina has presented a bill. Which would amend one of the Securities and Exchange Commission’s laws to offer a safe harbour for certain token initiatives.
Moreover, McHenry proposed changing the Securities Act of 1933 to create a safe harbour for token development teams. In a draught of the “Clarity for Digital Tokens Act of 2021” issued by the House Committee on Financial Services. He recommended allowing projects to sell tokens without having to register for up to three years. During which time teams would be able to build a completely decentralized network.
The SEC proposal
McHenry’s bill appears to be based on SEC commissioner Hester Peirce’s proposal to create a safe harbour for enterprises. That solicit financing to build decentralized networks, which she initially floated in 2019. According to Peirce’s suggestion, network developers should be given a three-year grace period. In order to establish a decentralized network without fear of legal action from the SEC.
Furthermore, in February 2020, Peirce stated, “If adopted, the proposed safe harbour could be the most revolutionary development for the US cryptocurrency market to date”. “By prioritising development and providing projects with time to construct robust networks. The proposed safe harbour paves the road for American access to and adoption of digital asset markets.”
The idea comes on the same day that SEC Chair Gary Gensler addressed to the committee about the federal agency’s monitoring. According to McHenry, Gensler has made “concerning and conflicting” statements about crypto assets. And the SEC’s enforcement activities and regulatory authority.
“Innovation and technology should be nurtured in this country rather than exported,” McHenry added. “This bill […] provides legal stability to digital asset projects that require regulatory clarity to get off the ground.”
McHenry’s attempts to create a safe harbour were lauded by Kristin Smith, executive director of the Blockchain Association. Who emphasized the importance of cooperation between entrepreneurs and regulators. The law “has the potential to include a much-required clear way ahead for individuals generating new technologies and solutions leveraging digital tokens,” according to the Institute of Digital Commerce, a crypto advocacy group in the United States.
“Mr. Fintech” has put forth several pieces of pro-crypto legislation
McHenry, dubbed “Mr. Fintech” by many in Congress, has proposed several pro-crypto bills, including recommending that the Commodity Futures Trading Commission and the Securities and Exchange Commission “establish a joint working group on digital assets” to address regulatory clarity in the crypto space. He also informed his colleagues that trying to block Bitcoin (BTC) would be pointless because the cryptocurrency was an “irresistible juggernaut”.