US SEC Appoints New Senior Crypto Advisor to Coordinate Digital Asset Regulation

US SEC Appoints New Senior Crypto Advisor to Coordinate Digital Asset Regulation

The US Securities and Exchange Commission has announced a new Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation, creating an entirely new position that will oversee the application of US securities law to the cryptocurrency and digital asset industry.

Valerie A. Szczepanik was announced as the new Senior Advisor for Digital Assets and Innovation via an SEC press release on June 4, with the SEC acknowledging the need for a director to coordinate the process of devising a comprehensive regulatory framework for cryptocurrencies within the United States.

SEC Names Valerie A. Szczepanik Senior Advisor for Digital Assets and Innovation

— SEC_News (@SEC_News) June 4, 2018

New Position Will Accelerate Application of Securities Laws

Szczepanik, who worked with the SEC since 1997, most recently worked as an Assistant Director in the SEC’s Division of Enforcement Cyber Unit. As the head of the SEC’s Distributed Ledger Technology Working Group, the Co-Head of the SEC’s Dark Web Working Group, and a member of the SEC FinTech Working Group, Szczepanik is an expert in blockchain technologies and cryptocurrencies.

The move to place Szczepanik as a senior crypto advisor is interned to assist with the implementation of US securities laws to digital assets — including initial coin offerings. Chairman Jay Clayton commented on Szczepanik’s placement in the new role:

“Valerie’s thought leadership in this area is recognized both within the Commission and across financial regulators in the United States and abroad. With her demonstrated skill, experience, and keen awareness of the importance of fostering innovation while ensuring investor protection, Val is the right person to coordinate our efforts in this dynamic area that has both promise and risk.”

Szczepanik will be working with Digital Assets and Innovation Division Director Bill Hinman, who stated that the SEC is currently working on the securities law implications of blockchain and distributed ledger technologies, as well as “cryptocurrencies, Initial Coin Offerings, tokenized securities, and other digital instruments.”

Szczepanik provided some insight into her future actions as the SEC’s new senior crypto advisor, hinting toward “strategic responses” intended to address digital assets:

“I am excited to take on this new role in support of the SEC’s efforts to address digital assets … I look forward to working closely with staff across the agency, our regulatory partners, and the public as we provide a coordinated and strategic response to developments.”

All Quiet on the Regulatory Front

The creation of the new senior crypto advisor role comes at a critical time for the SEC, who have not announced any major initiatives for the implementation of crypto-specific regulation since a rumored closed-door meeting earlier this year.

Related Story: Reactions to the Alarming Frequency of ICO ScamsAside from the launch of a mock fraudulent ICO site designed to promote investor awareness in May, the SEC has made no major announcements.

SEC Commissioner Hester Peirce, speaking at the Medici conference in May, emphasized the SEC’s focus on open communication between regulators and crypto industry participants. Highlighting the UK’s Financial Conduct Authority’s “regulatory sandbox” approach to cryptocurrency regulation, Pierce stated that while sandbox models can be effective, they aren’t necessarily the best solution.

“My fear that regulators will grab hold of the shovels and buckets is why I am often wary of so-called regulatory sandboxes. I am entirely in favor of finding ways to make appropriate regulatory allowances that clear the way for innovation to flourish. What troubles me about sandboxes, however, is that the regulator is typically sitting there next to the entrepreneurs.”

While it’s unlikely that the US will adopt a liberal stance on cryptocurrency and blockchain innovation similarly to the UK, the United Arab Emirates, Taiwan, or Singapore, Szczepanik’s placement as a crypto regulation coordinator should at least provide the cryptocurrency community with some answers regarding to the ongoing US crypto regulation issue in the near future.

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