Valerie Szczepanik, the SEC’s senior advisor for digital assets, said during the South by Southwest conference that the crypto spring is coming and will require more regulation. 

Interesting comments last week from Valerie Szczepanik, senior advisor for digital assets at the Securities and Exchange Commission. Szczepanik believes that regulation will boost the overall cryptocurrency market. Moreover, Szczepanik said that she thinks “the spring is going to come.”

Szczepanik said about the cryptocurrency market and future regulations:

“I do think if we hope to smell the crypto spring in the air, it will take people walking with the regulators. But I do think the spring is going to come.”

Szczepanik spoke during the South by Southwest in Austin, Texas. According to Szczepanik, the difficulty is in striking the balance between proper guidelines and enforcement to protect investors, and a more light handed approach to foster innovation and advance the economy.

“I think if you were to propose a new regime of regulations in a precipitous way without really studying it, you might end up steering the technology one way or another. We’d much rather have people come and ask us before they do something rather than coming and asking for forgiveness.”

The senior advisor also talked about stablecoins during SXSW and hinted that they might be seen as securities by the SEC. 

According to Szczepanik stablecoins can be placed into three separate categories:

  • Those backed by real assets such as gold or real estate
  • Those tied to fiat currency in reserves
  • Those backed by market financial mechanisms

Apparantly, algorithmic and digital-asset backed stablecoins “could raise issues under securities laws.”

“It’s these kinds of projects, ‘where there is one central party controlling the price fluctuation over time, they might be getting into the land of securities. I’ve seen stablecoins that purport to control price through some kind of pricing mechanism, whether it’s tied to the issuance, creation or redemption of another type of digital asset tied to it, or whether it is controlled through supply and demand in some way to keep the price within a certain band.”


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