02 / 19 / 21
Details of the SECs New Crypto Office
ON December 3, 2020, the SEC announced that the Strategic Hub for Innovation and Financial Technology, often called FinHub, would be turned into a standalone office. According to the SEC, Valerie A. Szczepanik would continue to lead the office as its first director. Szczepanik will report directly to the chairman of the SEC.
The Scope of the Office
Operations of the office will continue its goal of facilitating the active engagement with entrepreneurs, developers, and innovators in the crypto and blockchain sector. According to Miss Szczepanik, the scope and complexity of FinHub have continued to evolve and grow as the technology has developed.
She added that the organizational shift would facilitate the agility and the flexibility of the SEC to work with regulators globally and market participants. Additionally, it would encourage leading-edge innovation that would shape the intersection between securities laws and emerging technology.
History of FinHub
The office was established in 2018 within the Division of Corporation Finance. It has been the tip of the spear for the agency’s efforts to ensure responsible innovation within the fintech sector. The office also leads the agency’s efforts in evolving areas such as distributed ledger technology, automated investment advice, digital assets, AI, machine learning, and marketplace financing.
According to the SEC chair Jay Clayton, their decision to establish FinHub as a standalone office, will facilitate the introduction of new technology. The aim is to ensure that investors gain maximum benefits while improving the resiliency and efficiency of the markets.
The Timing is Crucial
The timing of the decision comes at a time when numerous new technologies and industries have come up. One of the most important is the DeFi sector, which is expected to have a crucial role in the development of the future of the financial sector. With better autonomy, FinHub will have the capabilities to continue offering investors protection without stifling growth in the sector.
Is this Good for the Crypto Sector
The SEC has been one of the most prominent players in regulating the crypto sector. They have clamped down on various projects, including the Telegram TON project, which was an ICO worth $1.7 billion. While they have played a crucial role in protecting investors, there has been uproar from the crypto community.
Many players in the crypto sector feel that there are no comprehensive guidelines for the sector. However, the establishment of FinHub as a standalone office could help to change all that. It would provide the SEC with an opportunity to carefully examine their guidelines for the sector and come up with rules that are more comprehensive.
In the long term, this will be good for investors, who might be afraid of entering the sector due to compliance risk. It would also play a role in the expansion of the nascent crypto sector as more money enters the sector.
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