SEC encryption working group leader: Encryption startups should be allowed to raise funds through NFT.

According to a report by Decrypt on March 22, Hester Peirce, the head of the cryptocurrency working group at the SEC, stated on March 22 that crypto projects like Stoner Cats, which use NFTs as a fundraising mechanism, should be exempt from securities regulation, and hinted that such projects may soon receive clear guidance from the powerful regulatory body.

At the SEC’s first Crypto Assets roundtable meeting, Peirce expressed to Decrypt that she was encouraged by the positive reaction to the statement that the agency released the day before (announcing that proof-of-work crypto mining does not fall under its definition of securities). Peirce indicated that NFTs might be the next asset class the agency addresses through a similar exemption statement.

“We can take the same approach to NFTs,” Peirce said, “if we can provide some framework or reference standards for NFT issuers, I think that would be very helpful.”

She further explained that statements regarding the non-securities status of certain types of NFTs may open up space for art NFTs as well as projects like Flyfish Club and Stoner Cats. These two projects were previously sued by the SEC under former chairman Gary Gensler’s leadership.