On Feb. 6, 2020, SEC Commissioner Hester Peirce gave a speech in Chicago called "Running on Empty"1. She used it to propose a safe harbor for token projects. A safe harbor is a rule that shields a project from a law while it meets set conditions. Hers would give a token team three years to build, exempt from the securities laws' registration rules.
The SEC proposed its own safe harbor on Aug. 18, 20264. Peirce titled her Aug. 18, 2026 statement "Filling the Regulatory Tank"5. She left the SEC on Oct. 2, 202611.
What happened in the six years between?
The problem she named
Peirce started with a trap. A token network needs its tokens spread among users before it can run on its own. Selling or handing out those tokens may fall under the securities laws1.
"We have created a regulatory Catch 22," Peirce said. “Would-be networks cannot get their tokens out into people’s hands because their tokens are potentially subject to the securities laws.”1
Her fix was time. A team would get three years from its first token sale to reach "network maturity"1. Maturity meant one of two things: the network was decentralized, or the token worked for its purpose.
Both sides, in their own words
Did the six-year wait protect investors?
“Would-be networks cannot get their tokens out into people’s hands because their tokens are potentially subject to the securities laws.”
“Nothing about the crypto markets is incompatible with the securities laws. Investor protection is just as relevant, regardless of underlying technologies”
What the proposal asked for
Peirce's draft came with conditions. A team had to post its source code, transaction history and token supply plan on a free public website1. Team members had to disclose their names and their token holdings, CoinDesk reported6. The team had to file a notice of reliance on EDGAR, the SEC's filing system, within 15 days of its first sale.
Fraud stayed illegal. “If anyone lied in connection with selling tokens pursuant to the safe harbor, the SEC or a state could bring an enforcement action,” Peirce said1.
She also named her limits. "I am one of five Commissioners. I cannot write rules unilaterally," Peirce said1.
Industry voices liked the idea and saw the odds. Peter Van Valkenburgh of Coin Center called it sober and reasonable, CoinDesk reported on Feb. 19, 20207. “For this to become official policy it would have to be bought into from the other commissioners and [SEC Chairman Jay Clayton], so we’d have to wait for that,” Van Valkenburgh said.
Version 2.0 and a new chairman
On April 13, 2021, Peirce posted an updated draft on GitHub2. The new version added semi-annual disclosure updates and an exit report at the end of the three years.
Her statement looked ahead to new leadership. “Now, as a new Chairman is coming into the SEC with a new agenda, is the perfect time for the Commission to consider afresh how our rules can be modified to accommodate this new technology in a responsible manner,” Peirce wrote2.
Gary Gensler was sworn in as SEC chair four days later, on April 17, 20218.
What the SEC did in those years
Cornerstone Research counts every SEC crypto enforcement action by the year it began8. The SEC brought 18 crypto actions in 2018: 9 lawsuits and 9 administrative proceedings. In 2020, the year of the first safe harbor draft, it brought 18 lawsuits and 11 administrative cases.
The count peaked in 2023. That year the SEC filed 28 crypto lawsuits and 19 administrative cases, 47 in all8. The SEC brought 33 actions in 2024 and 13 in 2025.
The SEC began 47 crypto enforcement actions in 2023: 28 lawsuits, 19 administrative cases
SEC crypto enforcement actions by the year each began and by the kind of case
- Federal court lawsuits
- Administrative cases
- Height: Enforcement actions
Source: Cornerstone Research [8].
Read the chart as a table
| Item | Federal court lawsuits | Administrative cases |
|---|---|---|
| 2018 | 9 actions | 9 actions |
| 2019 | 11 actions | 8 actions |
| 2020 | 18 actions | 11 actions |
| 2021 | 14 actions | 6 actions |
| 2022 | 24 actions | 6 actions |
| 2023 | 28 actions | 19 actions |
| 2024 | 25 actions | 8 actions |
| 2025 | 9 actions | 4 actions |
Which charges did those cases carry? Cornerstone tracks allegations too8. Peirce's draft would have covered unregistered token sales by teams that met its terms1. SEC cases alleging an unregistered securities offering numbered 13 in 2018 and 27 in 2023. In 2025 there were 8. Fraud allegations ran from 8 in 2018 to 28 in 2023 and 12 in 2025.
SEC crypto cases alleging unregistered offerings rose to 27 in 2023 and fell to 8 in 2025
SEC crypto enforcement actions making each of two allegations, by the year each action began
- Unregistered offering
- Fraud in a sale
- Height: Actions with the allegation
Source: Cornerstone Research [8].
Read the chart as a table
| Item | Unregistered offering | Fraud in a sale |
|---|---|---|
| 2018 | 13 actions | 8 actions |
| 2019 | 14 actions | 9 actions |
| 2020 | 20 actions | 18 actions |
| 2021 | 16 actions | 13 actions |
| 2022 | 22 actions | 21 actions |
| 2023 | 27 actions | 28 actions |
| 2024 | 19 actions | 24 actions |
| 2025 | 8 actions | 12 actions |
A change at the top came with the fall in 2025. Five of the 13 actions in 2025 came under Gensler before he left in January 2025, Cornerstone found8. Monetary penalties in 2025 totaled $142 million, "representing less than 3% of the monetary penalties imposed in 2024," Cornerstone Research wrote.
The case against a safe harbor
Gensler laid out the opposing view on Sept. 8, 2022, in a speech called "Kennedy and Crypto"3. “Nothing about the crypto markets is incompatible with the securities laws. Investor protection is just as relevant, regardless of underlying technologies,” Gensler said.
He judged most tokens to be securities already. “Offers and sales of these thousands of crypto security tokens are covered under the securities laws,” he said3. On calls for more guidance, he answered that the SEC had “spoken with a pretty clear voice here: through the DAO Report, the Munchee Order, and dozens of Enforcement actions, all voted on by the Commission”.
His case rests on the record of fraud. Of the 47 actions in 2023, 28 alleged fraud8. In February 2020, CoinDesk reported that some observers feared scams could run for years behind claims of good faith7.
The case for
Peirce's case rests on clarity. Her 2020 draft kept fraud cases open and asked for disclosure up front1. The draft traded an enforcement fight for a filing and a public website.
By August 2026, the Securities and Exchange Commission had come around to the frame. Its Aug. 18, 2026 proposal offers a one-time exemption for offerings "of up to $5 million during a four-year period"4. A second permits offerings "of up to $75 million during each 12-month period". The rules also include a conditional safe harbor from the term "investment contract".
Unchained, reporting on the draft in April 2026, said it drew "from Commissioner Hester Peirce’s earlier Token Safe Harbor concept"9. Peirce's own statement cites her 2020 speech in its first footnote5.
She dated the turn herself. Her 2020 speech opened with a story about an empty gas tank on a New Jersey night5. “Our journey toward crypto clarity began in earnest five years after the gas station speech with a set of questions from the newly formed Crypto Task Force,” Peirce wrote in 2026.
“This proposal is one step on a long road toward a clear, sensible, enforceable regulatory framework for crypto,” Peirce wrote5.
What came between
Regulation Crypto Assets arrived after a delay. The SEC canceled a planned meeting on it, citing an "unforeseen scheduling issue," Decrypt reported10. Decrypt also cited a report that SIFMA, a Wall Street trade group, had discussed a legal challenge to the SEC's authority.
Peirce left on Oct. 2, 2026, six weeks after the proposal11. "Today is Hester Peirce’s last day as an SEC Commissioner," Will Schwartz of the Blockchain Association wrote in CoinDesk on Oct. 2, 2026. He added that she “proposed a token safe harbor years before regulators were ready to listen”.
What to watch
Watch the comment file. Public comments on Regulation Crypto Assets, file S7-2026-27, are due Oct. 20, 202612. Then watch the final vote, which the commission will cast after Peirce's departure11.
Sources
- Hester M. Peirce, "Running on Empty: A Proposal to Fill the Gap Between Regulation and Decentralization," Securities and Exchange Commission, Feb. 6, 2020, https://www.sec.gov/newsroom/speeches-statements/peirce-remarks-blockress-2020-02-06
- Hester M. Peirce, "Statement on Token Safe Harbor Proposal 2.0," Securities and Exchange Commission, April 13, 2021, https://www.sec.gov/newsroom/speeches-statements/peirce-statement-token-safe-harbor-proposal-20
- Gary Gensler, "Kennedy and Crypto," Securities and Exchange Commission, Sept. 8, 2022, https://www.sec.gov/newsroom/speeches-statements/gensler-sec-speaks-090822
- Securities and Exchange Commission, "SEC Proposes New Regulation Crypto Assets," Release 2026-76, Aug. 18, 2026, https://www.sec.gov/newsroom/press-releases/2026-76-sec-proposes-new-regulation-crypto-assets
- Hester M. Peirce, "Filling the Regulatory Tank: Regulation Crypto Assets Proposing Release," Securities and Exchange Commission, Aug. 18, 2026, https://www.sec.gov/newsroom/speeches-statements/peirce-statement-regulation-crypto-assets-081826
- Nikhilesh De, "SEC Commissioner Hester Peirce Proposes 3-Year Safe Harbor Period for Crypto Token Sales," CoinDesk, Feb. 6, 2020, https://www.coindesk.com/policy/2020/02/06/sec-commissioner-hester-peirce-proposes-3-year-safe-harbor-period-for-crypto-token-sales
- Nikhilesh De, "Crypto Industry Lauds Token Safe Harbor, but Warns of Risks," CoinDesk, Feb. 19, 2020, https://www.coindesk.com/policy/2020/02/19/crypto-industry-lauds-token-safe-harbor-but-warns-of-risks/
- Abe Chernin, Nicole M. Moran and Robert Letson, "SEC Cryptocurrency Enforcement: 2025 Update," Cornerstone Research, Jan. 22, 2026, https://www.cornerstone.com/insights/research/sec-cryptocurrency-enforcement-2025-update/
- Unchained, "SEC Sends Crypto Safe Harbor Proposal to White House Review, Signaling Imminent Publication," April 7, 2026, https://unchainedcrypto.com/sec-sends-crypto-safe-harbor-proposal-to-white-house-review-signaling-imminent-publication/
- Jason Nelson, "SEC Proposes Crypto Fundraising Exemptions in Abrupt About-Face," Decrypt, Aug. 18, 2026, https://decrypt.co/375902/sec-regulation-crypto-fundraising-exemptions
- William Schwartz, "America at a crossroads: Commissioner Peirce’s parting challenge," CoinDesk, Oct. 2, 2026, https://www.coindesk.com/opinion/2026/10/01/america-at-a-crossroads-commissioner-peirce-s-parting-challenge
- Securities and Exchange Commission, "Regulation Crypto Assets, File No. S7-2026-27," published in the Federal Register Aug. 21, 2026, read Oct. 13, 2026, https://www.sec.gov/rules-regulations/2026/08/s7-2026-27