Over the past eight months, we have seen the rise of what can only be described as pump-and-dump tokens. These schemes, fueled by influencer-driven market manipulation, have tarnished the reputation of the crypto industry. The SEC’s latest regulatory direction is a decisive step toward ending these cycles of fraud and consumer abuse—an issue that our law firm has been actively litigating.

This marks the end of the crypto Twitter, KOL-driven, pump-and-dump, shill culture that has plagued the industry. It draws a clear line in the sand: moving forward, bad actors will no longer be able to operate unchecked. This new regulatory clarity provides a much-needed framework to separate legitimate projects from scams, ensuring that innovation can continue without the noise of deceptive market manipulation.

The cryptocurrency industry has long grappled with regulatory uncertainty, a challenge that has stifled innovation and left market participants searching for clear guidance. Commissioner Hester Peirce’s latest statement, "The Journey Begins," outlines a pragmatic approach to resolving key regulatory issues, providing a much-needed roadmap for the future of crypto regulation. As a crypto attorney, I wholeheartedly agree with Peirce’s call for regulatory clarity and see her proposals as a path to fostering real innovation—not just in crypto but across the broader economy.

Unlocking the Power of Registered Offerings: A Game-Changer for Crypto and Beyond

One of the most significant aspects of Peirce’s proposal is the potential modification of existing registration pathways, such as Regulation A and crowdfunding. Tokenization within this framework has the potential to unleash the true power of crypto on multiple levels.

The JOBS Act, enacted under the Obama administration, was one of the first bipartisan efforts to reform securities laws in decades. However, its full potential was never realized due to the lack of a viable marketplace for equity crowdfunding securities. By utilizing tokenization and blockchain technology within this framework, we can finally achieve the original vision of the JOBS Act—democratizing investment opportunities while maintaining necessary disclosures and protections.

This shift accomplishes two crucial objectives. First, it effectively eliminates fraudsters and scams that have plagued the crypto space, creating a legitimate and transparent environment where both crypto and non-crypto companies can thrive. It also introduces a regulatory structure that ensures investor protections while allowing innovation to flourish. The implementation of disclosure requirements and consumer protections ensures that only legitimate projects can access these funding mechanisms, providing liquidity providers with new, safer avenues for market creation.

Second, and perhaps most importantly, this framework addresses the persistent issue of gatekeeping in early-stage venture investments. The barriers to entry in traditional investment landscapes—from angel investor networks to venture capital firms and banking institutions—have historically prevented countless innovative ideas from taking off. Simultaneously, these barriers have restricted retail investors from accessing high-growth opportunities typically reserved for institutional players.

Tokenization and secondary markets change this dynamic entirely. Unlike the penny stocks of the 1980s, these crowdfunded assets require disclosures and are backed by real companies. The introduction of liquid secondary markets for these investments ensures that early-stage investors are no longer locked into illiquid assets, enabling them to realize potential gains. This creates a more robust environment for innovation, as investors who understand specific industries or products can directly support and benefit from the companies they believe in.

More importantly, this innovation extends beyond the crypto sector—it reinvigorates the broader American startup ecosystem. Entrepreneurs in industries ranging from technology to retail to food services will have direct access to funding from engaged communities, fostering a decentralized and meritocratic funding model. This democratization of capital empowers new businesses, brings communities together, and strengthens the overall economy by making early-stage investment opportunities more accessible.

Regulatory Certainty: The Key to Unlocking Crypto’s Potential

One of the most pressing issues facing the industry is the ambiguous security status of crypto assets. Peirce acknowledges that defining which assets fall under securities laws is fundamental to resolving broader questions. The creation of a specialized Task Force to examine different types of crypto assets is a step in the right direction. Without clarity, innovation in blockchain and digital assets is stymied by fear of enforcement actions and shifting regulatory interpretations.

Moreover, Peirce’s suggestion that the Task Force identify areas outside the SEC’s jurisdiction is particularly noteworthy. The expansion of no-action letters as a means of providing regulatory guidance could be a game changer, offering projects a window into the SEC’s thinking while reducing compliance risk. This approach fosters responsible innovation while ensuring that regulatory oversight remains proportionate.

Temporary Prospective and Retroactive Relief for Coin and Token Offerings: Aligning with Securities Laws

One of the most promising proposals from Commissioner Peirce is the introduction of temporary prospective and retroactive relief for coin and token offerings. This framework ensures that entities taking responsibility for their token offerings by providing specified information, keeping that information updated, and agreeing not to contest the SEC’s jurisdiction in cases of fraud can operate with regulatory certainty. This proposal aligns with the very purpose of the Securities Acts—to protect investors through transparency and disclosure while enabling capital formation and market growth.

The reality is that cryptocurrencies and blockchain technology are not inherently problematic. The issues that have historically plagued the industry stem from a lack of disclosures, leaving investors vulnerable to unscrupulous actors. By implementing structured disclosure and record-keeping requirements, the SEC would ensure transparency while allowing innovation to flourish. This approach does not suppress blockchain-based projects but instead legitimizes them by demanding the same level of consumer protection expected from any other financial market.

Burwick Law’s Role in Regulated Crypto

At our firm, we see this as an opportunity to further our mission of cleaning up the crypto space. With clearer regulations and stronger enforcement mechanisms, we will continue to pursue those who defraud investors, leveraging both regulatory guidance and judicial pathways to bring accountability to the industry. The courts, in conjunction with these new regulations, will play a critical role in making crypto a viable and trusted financial system in the United States.

Today, I am proud to be a crypto attorney. We stand at the dawn of a new era—one where transparency, integrity, and innovation can thrive. The next four years will be pivotal in shaping the future of crypto, and we are excited to be at the forefront of this transformation.

Henry Miller:

"One’s destination is never a place, but rather a new way of looking at thingWritten by Max Burwick. Disclosures: This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for advice specific to your situation.

Reading this article does not create an attorney-client relationship.

Laws governing digital assets and cryptocurrencies are rapidly evolving. This information may not reflect the latest legal developments.This may be considered attorney advertising in some jurisdictions.