SEC Chairman Proposes "encryption Project" Initiative to Pave the Way for U.S. Encryption Innovation

Recently, the chairman of the U.S. Securities and Exchange Commission launched a new initiative called "encryption project" aimed at promoting innovation in the U.S. cryptocurrency sector. This move not only reverses the regulatory trend of the past few years but also lays the foundation for the next stage of development in the U.S. encryption industry.

The main content of this initiative includes:

1. Clearly define that most encryption assets are not securities and establish rules to determine when encryption assets constitute securities.

2. Stop punishing early centralized token issuers or those using traditional business structures.

3. Introduce a regulatory framework that supports tokenized securities.

4. Allow U.S. citizens to participate in airdrops, token issuance, and network reward activities.

5. Protect the autonomy of self-custody of encryption assets and update relevant rules.

6. Allow decentralized finance protocols and automated market makers to operate without mandatory intermediaries.

7. Plan to launch a comprehensive platform integrating encryption trading, staking, lending, and securities functions.

8. Introduce "innovation exemptions" to allow encryption projects to enter the market without fully complying with traditional regulations.

9. In appropriate cases, regard cryptocurrency developers as code publishers rather than intermediaries.

10. Committed to attracting encryption companies that left the U.S. market due to previous regulatory environments to return.

The SEC chairman emphasized that clear guidelines will be developed to assist market participants in classifying encryption assets, such as digital collectibles, digital goods, or stablecoins. This approach will enable market participants to determine whether an asset constitutes an investment contract based on clear guiding principles.

In addition, the SEC plans to introduce specific disclosure, exemption provisions, and safe harbor systems to address issues related to initial coin offerings, airdrops, and network rewards. These measures aim to eliminate legal complexities and litigation risks, encouraging project parties to include U.S. users in their distribution scope.

The newly proposed "Innovation Exemption" mechanism allows innovators and visionaries to immediately bring new technologies and business models to market without having to fully comply with cumbersome regulatory requirements that may hinder economic activity. Instead, they only need to adhere to principle-based conditions to achieve the core policy objectives of federal securities law.

This policy shift is of significant importance to all parties in the industry. It not only provides new guidance for legal professionals but also creates a more favorable environment for various operators and participants. Practices that were previously considered risky may transform into strategies that can be optimized and expanded. Innovative ideas that were once shelved due to legal concerns can now be re-examined and implemented.

This transition marks a significant change in the regulatory environment for cryptocurrency in the United States, promising to open a new chapter of innovation and bring positive impacts on the development of the global encryption industry.