- The SEC forms a task force to create a clearer regulatory framework for digital assets
- Hester Peirce leads the Task Force to find a middle ground with crypto companies
- Key areas include crypto security status, token offerings, and cross-border sandbox
The SEC under the Trump administration has put together a task force in order to work on a clearer regulatory framework for digital assets.
Over the last half a decade, crypto firms have faced hardship working with U.S. regulators, primarily during Gary Gensler’s tenure from 2021 until January of this year. The commission was hardly criticized by the community, and even by SEC insiders during this time, due to its alleged inability to reach a common ground with digital asset companies, mostly known for jumping straight into legal action before providing these firms the information needed to comply.
Most notably, the SEC lawsuit against Ripple Labs—accusing the firm of illegally offering the sale of an unregistered security (XRP) — paved the way for a long-running debate in the community about what a digital asset should be classified as.
The new SEC, captained by Acting Chair Mark Uyeda, was quick to put the move on in an attempt to appease all parties involved in this discussion. During its first week as Chair, Uyeda put together a new team tasked with working alongside companies, congressmen, and regulators in order to try to achieve a middle ground.
Republican Commissioner Hester Peirce, also known as “Crypto Mom” was trusted to lead the task force. In a statement published on February 4, Peirce spoke more about her future rule as head of the crypto task force.
Summary of Commissioner Heister Peirce’s Statement
The statement covered all aspects the task force plans to improve in order to create better regulation. It covers from crypto security status to crypto ICOs. Here is a quick summary of all Hester Peirce said:
- Security Status: The Task Force is working to determine the status of various crypto assets under securities laws to resolve numerous related issues.
- Scoping Out: The Task Force aims to identify areas outside the SEC’s jurisdiction and welcomes requests for no-action letters, which provide clarity on enforcement actions in specific circumstances.
- Coin and Token Offerings: The Task Force is considering recommending temporary relief for certain coin or token offerings, ensuring they can trade freely on secondary markets if specific conditions are met until permanent regulations or legislation is established.
- Registered Offerings: The Task Force will explore modifying existing registration paths, like Regulation A and crowdfunding, to make registering token offerings more viable.
- Special Purpose Broker-Dealer: Possible updates to the no-action statement for special-purpose broker-dealers, expanding it to include those that custody both crypto asset securities and non-securities.
- Custody Solutions for Investment Advisers: Developing a regulatory framework for investment advisers to safely custody client assets.
- Crypto-Lending and Staking: Clarifying the regulatory status of crypto-lending and staking programs and providing guidance on compliance with securities laws.
- Crypto Exchange-Traded Products: Working on clear guidelines for approving and modifying crypto exchange-traded products, addressing issues like staking and in-kind creations.
- Clearing Agencies and Transfer Agents: Addressing the intersection of crypto with clearing agency and transfer agent rules, and working with market participants on tokenizing securities and using blockchain technology.
- Cross-Border Sandbox: Exploring ways to facilitate international experimentation with crypto projects on a limited and temporary basis, potentially leading to long-term solutions.
By the looks of it, Crypto Mom will have a lot of work moving forward. If the SEC is able to improve all the aspects mentioned in the statement, the significance of these developments could hold significant weight for digital assets, and its innovations happening on U.S. ground.
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