Update (February 5, 2025 at 22:29:00 UTC): This article has been updated to add commentary from Consensys attorney Bill Hughes.
According to attorneys interviewed by Cointelegraph, the retroactive token and coin offering relief measures proposed by US Securities and Exchange Commission (SEC) Commissioner Hester Peirce are expected to benefit certain crypto firms and projects.
Attorney Franco Jofré, who is also a senior adviser at Miller & Chevalier, stated that firms that conducted initial coin offerings (ICOs) during the ICO boom of 2017–2018 have a strong argument for relief under the new proposal.
Jofré added that projects that have strong utility use cases for their tokens or coins, rather than 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.”
Jofré identified decentralized finance projects, layer-2 scaling solutions, and other crypto infrastructure that use tokens for governance and security as potential candidates for relief. Custodians and centralized exchanges are also likely to benefit, according to the attorney.
The attorneys Franco Jofré and Eli Cohen, who is the general counsel at real-world asset tokenization platform Centrifuge, stated that the SEC has the authority to dismiss the lawsuits it brought against crypto firms for allegedly offering unregistered securities.
However, Jofré noted that any potential relief from the SEC would not apply to firms involved in fraud or those that misled investors during their initial coin offerings. He believed that the SEC is unlikely to drop all of its litigation against crypto firms.
Jofré suggested that if the SEC redefines the criteria for securities offerings or adopts a new approach to interpreting initial coin sales, there is a greater chance that pending litigation will be dropped.
In addition, Jofré mentioned that the SEC may choose not to offer retroactive relief to crypto firms and instead focus only on granting prospective relief.
Consensys attorney Bill Hughes expressed that the regulatory approach under the new leadership at the SEC is welcomed, but implementing changes will take time. Hughes urged patience while the new leadership settles into their roles. 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 further commented that he expects the new leaf to be turned by the summer at the latest. The attorney also praised the SEC’s invitation for crypto firms to provide input for the regulatory process, something that industry executives have been requesting for years.