SEC Targets “Clearer” Crypto Regulation with Task Force

With US regulatory uncertainty a regular theme of recent years in crypto markets, there is probably some relief at an announcement from the US Securities and Exchange Commission (SEC) that it is forming a crypto task force, aimed at “developing a comprehensive and clear regulatory framework for crypto assets”.

The new task force will be led by SEC commissioner Hester Peirce, with Richard Gabbert, senior advisor to the acting chair of the SEC, Mark Uyeda, and Taylor Asher, senior policy advisor to the acting chair, will serve as the task force’s chief of staff and chief policy advisor, respectively. It will “set the SEC on a sensible regulatory path that respects the bounds of the law”, the agency states.

The release announcing the task force takes aim at the previous regime under chair Gary Gensler, by stating, “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.”

That statement will be music to many ears in the crypto industry, which has seen a surge in optimism since the US election, but which also constantly fought with the SEC over what it perceived to be an overreach on the part of the regulator. A further twist in the saga comes from the upheaval at the Commodity Futures Trading Commission (CFTC), where its chair, Rostin Behnam, has stepped down, leaving that regulator’s crypto agenda in doubt. The past few years have been marked by an ongoing battle between the two US regulators over who should have primary oversight of crypto markets and players – this move by the SEC could establish a leadership position for the agency.

The SEC says the new Task Force’s focus will be to help the commission “draw clear regulatory lines, provide realistic” paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously”. It will operate within the statutory framework provided by Congress and will coordinate the provision of technical assistance to Congress as it makes changes to that framework. It will also coordinate with federal departments and agencies, including the CFTC, and state and international counterparts.

“This undertaking will take time, patience, and much hard work,” observes Peirce. “It will succeed only if the Task Force has input from a wide range of investors, industry participants, academics, and other interested parties. We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation.”