SEC's Proposed Relief Measures Could Benefit Crypto Firms

According to Cointelegraph, the retroactive relief measures proposed by U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce could potentially benefit certain crypto firms and projects. Legal experts suggest that companies involved in initial coin offerings (ICOs) during the 2017–2018 boom may have a strong case for relief under this new proposal. Franco Jafré, a senior adviser at Miller & Chevalier, highlighted that projects demonstrating strong utility use cases for their tokens, rather than focusing solely on investment, are likely candidates for relief. He emphasized that if the SEC provides relief, it could establish clearer criteria to differentiate between security tokens and genuine utility tokens. Tokens primarily issued for access to services or platforms, or those designed to function as digital goods rather than equity substitutes, could benefit. This includes decentralized finance projects, layer-2 scaling solutions, and other crypto infrastructure utilizing tokens for governance and security. Custodians and centralized exchanges are also notable candidates for relief. Jafré, along with Eli Cohen, general counsel at Centrifuge, noted that the SEC has the authority to dismiss lawsuits against crypto firms accused of offering unregistered securities. However, Jafré pointed out that any relief would likely exclude firms involved in fraudulent activities or those that misled investors during their ICOs. He expressed skepticism about the SEC dropping all litigation against crypto firms. If the SEC redefines securities offering criteria or adopts a new approach to interpreting initial coin sales, pending litigation might have a better chance of being dismissed. Nonetheless, the SEC might choose to focus solely on prospective relief rather than offering retroactive relief to crypto firms.