SEC Crypto 2.0

Just how crypto-friendly will the new administration be? Apparently, plenty. Today, SEC Acting Chairman Mark T. Uyeda announced the launch of a task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets, led by Commissioner Hester Peirce, aka Crypto Mom, in what may be the first step towards a more flexible regulatory approach.

The announcement, titled “SEC Crypto 2.0,” indicates a shift away from the SEC’s current enforcement-heavy approach: “The Task Force will collaborate with Commission staff and the public to set the SEC on a sensible regulatory path that respects the bounds of the law. To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way. Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud. The SEC can do better.”

While the SEC of course only regulates securities, the Task Force will coordinate with federal departments and agencies, including the Commodity Futures Trading Commission, and state and international counterparts, so it is possible that it will consider how the SEC’s approach may fit in a broader regulatory context.

Legal Tokens:

Can the task force provide actual results? The hope is yes. Commissioner Peirce is the author of a token safe harbor proposal released in 2021 that attempts to create a way forward for token offerings. At a time when the incoming President releases a meme coin and the Washington Commanders are one win away from the Superbowl, everything seems possible. At the very least, this is a sign that the current SEC leadership is looking for a path that allows crypto to exist within a regulatory framework without having to sacrifice many of its unique qualities and strengths.