Prescriptive Fintech Guidance ‘Waste’ of Time, SEC Official Says

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By Andrew Ramonas

Creating prescriptive SEC guidance to help firms creating financial technology avoid breaking securities laws would “probably waste a lot of time,” a Securities and Exchange Commission official said April 3.

The comments by Valerie Szczepanik, an SEC assistant Enforcement Division director, come at a time of uncertainty in the initial coin offering community about how to use the ICO fundraising tool without running afoul of securities laws. The SEC has issued an investigative report and enforcement actions detailing allegations that some companies have used ICOs to sell unregistered securities. But it hasn’t released more precise ICO guidance sought by some in the space.

“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,” Szczepanik, who also heads the SEC’s distributed ledger technology working group, said at a blockchain conference in Washington.

The SEC encourages individuals working on fintech projects to contact the agency, Szczepanik said. The commission has had “very productive” conversations with people in the space after concluding last summer in its investigative report that some digital tokens issued as part of an ICO are securities, she said.

The commission can’t give advice, but the agency can help point members of the fintech community in the right direction when it learns more about their plans, Szczepanik said.

“We say, ‘Have you thought of this? Have you thought about that?’” she said. “And they may go back to the drawing board and look at it in a different way.”

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To contact the editor responsible for this story: Seth Stern at

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