Big money venture capitalists and law firms met in secret, roughly a month ago, with the US Securities and Exchange Commission (SEC), according to two major media outlets. The SEC has been particularly active this year, causing those with interest in pet coins and projects to lobby the agency for special protection.
Top of the list was a push to provide “safe harbor” for Ethereum. Also read: Telegram Uses Bitcoin in Effort to Thwart Russian Authorities Andreessen Horowitz, Union Square Ventures, along with powerhouse law firms Cooley, Perkins Coie, and McDermott Will & Emery, formed an ad hoc association, the Venture Capital Working Group.
It appears to exist in an effort to influence what some see as inevitable, regulation. Almost weekly, the SEC has made noise about cryptocurrencies in one form or another, and the broader ecosystem continues to debate whether to go further underground or embrace government intervention.
Online political journal Politico broke the story, insisting a “group of venture capital firms with investments in digital currency-related companies has asked the SEC for a safe harbor from securities laws for certain projects.” Perkins evidently led the effort, flooding the SEC with a nearly 50 page note. The note “argues that while certain digital tokens sold to select investors before wider availability may qualify as securities, they should be granted protection from regulations once they are used for a non-investment purpose.” It has been long thought if the SEC were to overtly designate a cryptocurrency coin or token a “security,” the weight of legal implications alone would probably kill it.
Compliance would necessarily mean hoards of expensive lawyers, etc. The working group, therefore, wished to get ahead of that possible future by proposing safe harbor for some coins they feel are objectively not securities, hoping to secure what Politico refers to as “no action letters.” Chief among the working group’s concern, evidently, is the second most popular cryptocurrency by market capitalization, Ethereum. Read more from news.bitcoin.com…
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