SEC Appoints Crypto Czar to Oversee Digital Assets and ICOs

The U.S. Securities and Exchange Commission (SEC) has filled a new senior advisory position devoted to cryptocurrency innovation, a sign the regulatory agency is expanding its capability and oversight of digital assets.

SEC Appoints New Crypto Chief

The Washington-based regulator announced Monday that Valerie Szczepanik will support the Division of Corporate Finance as an associate director and senior adviser for digital assets and innovation. She will report to division director Bill Hinman.

The new role will lead the SEC’s growing scrutiny of digital assets and initial coin offerings (ICOs) by coordinating agency-wide efforts to bring the blockchain economy under federal securities law.

“Valerie’s thought leadership in this area is recognized both within the Commission and across financial regulators in the United States and abroad,” Chairman Jay Clayton said in a statement. “With her demonstrated skill, experience, and keen awareness of the importance of fostering innovation while ensuring investor protection, Val is the right person to coordinate our efforts in this dynamic area that has both promise and risk.”

Szczepanik has worked for the SEC since 1997 and was among the first to publicly comment on ICOs. As the head of the SEC’s distributed ledger group, Szczepanik urged ICO projects to uphold their fiduciary duties to investors regardless of whether they fall under SEC regulation.

Clayton described his new appointment as a “recognized leader in responding to developments in our markets.”

Regulatory Debate Heats Up

Szczepanik’s appointment comes as the SEC looks poised to expand its regulatory oversight of the blockchain industry with a focus on ICOs in particular. Although the agency has not delivered a comprehensive ruling on token raises, Chairman Jay Clayton says he has not come across an ICO that isn’t a security.

Interestingly, the SEC’s Robert Jackson told CNBC back in April that the ICO environment is what the wider securities market would look like without regulation. He also took a jab at bitcoin despite it not being on the SEC’s watch list.

Despite his apprehension, Jackson said the regulator is cautiously open to initial coin offerings provided that they are consistent with securities laws. Once again, he did not provide any details or timelines about how this will occur.

The SEC’s posturing reflects wider uncertainty about the blockchain economy and how it operates. Regulators around the world have struggled to understand what the technology is all about and how it will influence everything from consumer transactions to financial markets.

Since the ICO craze began in early 2017, the SEC has been trying to play catch up. In the meantime, it has flexed its investigative muscle by launching probes into cryptocurrency exchanges as well as initial coin offerings. With the latest appointment, it seems like the regulator is preparing more comprehensive measures for the market. However, it is unclear for how long regulation would be effective given the nascent and ever-changing state of the market.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi