Several venture capitalists (VCs) and entrepreneurs have been petitioning federal authorities to see certain virtual currencies in a “different light.”
Right now, many cryptocurrencies are in danger of being classified as “securities,” which would place them under strict regulatory scrutiny. Working to change this, venture capital firms Andreessen Horowitz and Union Square Ventures have gathered a team of lawyers and investors known as the “Venture Capital Working Group” to meet with the U.S. Securities and Exchange Commission (SEC) to develop what they call a “safe harbor[1]” for specific digital currencies and establish long-term proposals for how they should be viewed and handled.
The New York Times[2] alleges that several regulators are considering placing well-known cryptocurrencies — including ether, the world’s second-largest digital asset — in the securities category, which may cause their prices to fall drastically.
Richard Levin, a lawyer who’s worked with various blockchain and cryptocurrency ventures, described the meeting as “crucial” to the safety of digital assets and their respective users.
“It’s a ‘come to the lord’ moment,” he explained. “We are seeing a watershed moment in which many firms in the digital asset community who may have been ignorant of the law — or poorly informed — are now coming to terms with the fact that they are subject to regulators.”
While details surrounding the meeting remain largely confidential, the group says it’s trying to garner “utility token” classifications for many specific cryptocurrencies.
Many virtual entities have been introduced through initial coin offerings (ICOs). The process involves a team of entrepreneurs selling these virtual assets to raise funds for future projects. Generally, these currencies work as “internal payment methods” in the software the entrepreneurs create.
For a coin to classify as a security[3],
