The U.S. Securities and Exchange Commission (SEC), led by Chair Paul Atkins, proposes a new 'innovation exemption' for blockchain projects. This exemption is geared towards supporting the development of blockchain companies under certain standards.
Principles of the Innovation Exemption
The proposal aims to provide temporary relief from regulatory requirements for companies that meet specified conditions. The primary goal is to foster innovation while maintaining investor protection and market integrity.
Support for Decentralized Systems
Atkins highlighted the resilience of decentralized systems, particularly during recent market crises. He noted that many self-executing software programs continued to operate despite challenges, unlike some centralized platforms. Atkins stated, 'Many on-chain systems continued to operate as designed pursuant to open-source code.' (CITE_NA)
Future of Regulation in the Crypto Industry
Atkins has directed SEC staff to assess whether further guidance or rule changes are necessary to help market participants comply with securities laws when interacting with self-executing software. He acknowledged that the original drafters of financial regulations likely did not foresee the rise of decentralized, code-driven financial systems.
The SEC's proposal for an innovation exemption could be a significant step towards supporting the growth of blockchain technologies and ensuring greater regulatory flexibility in the crypto industry.
