SEC Appoints First Ever Cryptocurrency Chief

Cryptocurrencies, Law and Regulation, News

Valerie Szczepanik has been appointed as the new head of the SEC’s cryptocurrency task force. The news is not altogether surprising given that she has been heavily involved in the ICO industry, last year advising them to put investors first if they wanted the industry to flourish. She has prior knowledge of securities law and is already leading the SEC’s distributed ledger technology group, which she is now leaving for her new role. She will report to division director Bill Hinman.

The position is newly created, and she is to become the Senior Advisor for Digital Assets and Innovation. She will also hold the title of Associate Director of the Division of Corporate Finance. Szczepanik will be in charge of all SEC governed cryptocurrency policies, which will primarily relate to Initial Coin Offerings (ICO’s). According to SEC chairman Jay Clayton:

“Valerie’s thought leadership in this area is recognized both within the Commission and across financial regulators in the United States and abroad…Val is the right person to coordinate our efforts in this dynamic area that has both promise and risk.”

Szczepanik has a long history with the SEC, joining in 1997 and serving in the US Attorney’s Office for the Eastern District of New York, as well as clerking for some Federal judges. She recently worked as Assistant Director in the Division of Enforcement’s Cyber Unit and received a J.D. from Georgetown Law. She has stated that she intends to protect Main Street investors.

While the CFTC is the primary regulatory authority of cryptocurrency in the USA, the SEC has always been involved with ICOs due to the inherent risks of the investment model. The nature of cryptocurrencies is such that some have features that distinguish them as securities (SEC governed) and others have characteristics that identify them as commodities (CFTC governed). Clayton indicated in March that ICOs are securities, and because of this, cryptocurrency exchanges were required to register with the SEC. This announcement was met with skepticism by many within the cryptocurrency community.

Presently, there continues to be much regulatory uncertainty in the US blockchain sector.  Cryptocurrency related companies that have not registered with the SEC have been charged with violating Federal Securities law. According to Szczepanik: “Whether a token is a security or not is a fact or circumstance-based thing, and you have to really pick it apart.”

The appointment comes at a pivotal time in the cryptocurrency industry as countries across the globe are rapidly investing in and regulating the space. While the price of Bitcoin and other cryptocurrencies are low compared to December highs, pundits and enthusiasts remain confident that with increased acceptance and regulation new growth will soon be seen in the industry.

Digital Nomad with an interest in Zen and Blockchain technology.

Law graduate with 3 years experience as a consultant in the capital markets industry and 4 years experience freelancing on UpWork as a Creative Writer.

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