The Securities and Exchange Commission (SEC) unveiled its latest regulatory roadmap on Thursday, signaling a significant shift towards accommodating the cryptocurrency industry and integrating digital assets more fully into the U.S. financial system.
Almost half of the 20 proposed rule changes announced by the SEC are focused on easing existing regulations pertaining to crypto assets. To put this in perspective, the total value of the cryptocurrency market currently stands at $3.8 trillion, a relatively small portion of the $120 trillion U.S. capital markets overseen by the SEC.
“This regulatory agenda illustrates a fresh perspective at the Securities and Exchange Commission,” stated SEC Chair Paul Atkins in a released statement. “A central objective of my leadership is to establish clear guidelines for the issuance, safekeeping, and trading of crypto assets, while continuing to actively prevent illegal activities.”
One of the proposed crypto regulations revealed by the SEC includes a plan to develop specific rules regarding the offering and sale of crypto assets, along with certain exemptions and safe harbor provisions. Atkins initially promised these rules earlier this year when he announced the regulator’s “Project Crypto” announcement.
Another proposed change involves modifying the SEC’s interpretation of the Securities Exchange Act of 1934, with the goal of facilitating the trading of cryptocurrencies on U.S. securities exchanges. Earlier this week, the SEC and the Commodity Futures Trading Commission (CFTC) jointly issued a statement encouraging traditional exchanges dealing in commodities and securities to consider listing spot crypto assets.
Further actions could potentially alter long-held SEC interpretations of financial regulations established during the New Deal era. According to the announcement, the SEC intends to explore the possibility of creating specific crypto exemptions to its broker-dealer financial responsibility requirements and may even revise the definition of the term “dealer.”
The terms “broker” and “dealer,” as defined in the 1934 Securities Exchange Act, are critical to the SEC’s mandate and jurisdictional authority. They determine which individuals and entities are actively engaged in buying securities for others or for their own accounts, and therefore fall under the SEC’s strict regulatory framework.
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The SEC has consistently expressed its viewpoint regarding the current administration’s pro-crypto regulatory stance. This latest update on the agency’s active regulatory agenda represents perhaps the most significant step to date in translating those intentions into tangible policy.