Is creation of a SEC office designated to deal with digital assets a good or bad news for the industry? This is the question that crypto community has been mulling over last week, following the SEC’s announcement of Valerie A. Szczepanik’s appointment to the brand new position of Associate Director of the Division of Corporation Finance and Senior Advisor for Digital Assets and Innovation for Division Director Bill Hinman.
The media have promptly reduced the exuberant title to the likes of Crypto Czar, Crypto Sheriff, Cryptocurrency Chief, or Crypto Quarterback, which all point to the fact that from now on the vast yet diffused regulatory powers that the SEC holds over the blockchain realm is embodied in a single person. There is now a go-to office and a go-to officer, who is set to become a liaison between the regulator and the industry.
Growing wary with this development is quite a natural first response for those who have stakes in cryptocurrency and ICO markets. Libertarians from Reason’s blog platform classified it as ‘potentially bad news for fans of Bitcoin and other digital currencies.’ After all, the SEC’s actions throughout the last few months were mainly in the spirit of a regulatory incursion, and the appointment of a person to spearhead this effort might also feel through this retributory lense. Yet the community’s overall mood in the wake of Szczepanik’s promotion seems quite sanguine, as people go back to examine the record of her statements and find out that she is more likely to be the good cop rather than the bad.
Valerie A. Szczepanik on crypto
“Whether a token is a security or not is a fact or circumstance-based thing and you have to really pick it apart.”
“I think if you were to start down the road of being very prescriptive and putting out specific releases about hypothetical situations, not only would you probably waste a lot of time, you would probably create a road map to get around it.”
“We never turn down a request for a meeting […] We’re not going to do the innovating for people. But we want people to come in and propose solutions they want to accomplish.”
Who is she?
Ms. Szczepanik is a seasoned attorney whose tenure with the Securities and Exchange Commission exceeds two decades. Her educational record includes a BS in engineering from the University of Pennsylvania, followed by a JD from Georgetown Law School. In the late eighties she practiced patent law, reviewing applications filed by inventors of golf putters, medical devices, and even spherical dice with interchangeable orientation insert members. She then worked as a clerk for federal judges in district and appellate courts in DC before moving north to serve as Special Assistant United States Attorney at the United States Attorney’s Office for the Eastern District of New York.
The future crypto czar joined the SEC in 1997 as a Trial Counsel. In that capacity, she was responsible for litigation in civil and administrative proceedings that often dealt with cases of insider trading. One of the most high-profile enforcement actions Szczepanik was involved with was the storied case against Raj Rajaratnam and his hedge fund advisory firm Galleon…