Update (February 5, 2025 at 22:29:00 UTC): This article has been updated to add commentary from Consensys attorney Bill Hughes.
US Securities and Exchange Commission (SEC) Commissioner Hester Peirce’s proposed retroactive token and coin offering relief measures are likely to benefit crypto firms and projects with specific characteristics, according to attorneys interviewed by Cointelegraph.
Franco Jofré, an attorney and senior adviser at Miller & Chevalier, stated that firms that conducted initial coin offerings (ICOs) during the 2017-2018 ICO boom have a strong case for relief under the new proposal.
Jofré further explained that projects with tokens or coins that have strong utility use cases, as opposed to purely speculative instruments with an investment focus, are also likely to qualify for potential relief. He stated:
“If the SEC provides relief, it could introduce clearer criteria distinguishing security tokens from true utility tokens. For example, tokens issued primarily for access to a service or platform or those structured to function more like digital goods rather than equity substitutes.”
These projects include decentralized finance projects, layer-2 scaling solutions, and other crypto infrastructure that use tokens for governance and security. Custodians and centralized exchanges are also potential candidates for relief, according to the attorney.
Jofré and Eli Cohen, the general counsel at real-world asset tokenization platform Centrifuge, noted that the SEC has the authority to dismiss the lawsuits it filed against crypto firms for allegedly offering unregistered securities. However, Jofré clarified that any potential relief from the SEC would exclude firms accused of fraud or misleading investors during their ICOs. He believed that the SEC was unlikely to drop all ongoing litigation against crypto firms. Jofré suggested that if the SEC redefines the criteria for securities offerings or adopts a new approach to interpreting ICOs, there would be a higher chance of pending litigation being dropped.
Jofré also mentioned that the SEC may choose to offer only prospective relief to crypto firms and not provide retroactive relief at all.
Consensys attorney Bill Hughes commented that the new regulatory approach under the SEC’s new leadership is a positive development, but it will take time to implement the necessary changes. Hughes urged patience as the SEC settles into its role. He stated:
“I expect the crypto industry to be mindful of the issues [Peirce] identifies and will go forward with an admirable degree of patience. But at the same time, no one can expect us to wait forever for a new leaf to be turned.”
Hughes continued, “I think it’s fair to expect that leaf to turn by the summer at the latest.”
The attorney also commended the SEC’s invitation for crypto firms to provide input during the regulatory process, something that industry executives have been requesting for years.