SEC establishes new task force focusing on cryptocurrency – Legal firm McDermott Will & Emery
In a significant move on January 21, 2025, US Securities and Exchange Commission (SEC) Acting Chairman Mark T. Uyeda introduced a new crypto task force with the aim of formulating a comprehensive regulatory framework for crypto assets. Commissioner Hester Peirce will spearhead this initiative, representing a shift towards more active involvement and regulation of the crypto industry under the new SEC leadership.
The objective of the crypto task force is to work alongside SEC staff and the public to establish clear regulatory guidelines. This includes providing viable pathways to registration, developing sensible frameworks for disclosure, and deploying enforcement resources judiciously. The overarching goal is to position the SEC on a regulatory trajectory that adheres to legal boundaries.
This new approach marks a departure from the SEC’s previous strategy, which primarily relied on enforcement actions to regulate the crypto industry. This enforcement-driven approach has resulted in confusion regarding the legality of crypto activities, fostering an atmosphere hostile to innovation and prone to fraudulent activities. By contrast, the new task force will align with Commissioner Peirce’s well-known stance on the industry, advocating for guidance collaboration with market and industry participants in formulating crypto policies. Commissioner Peirce’s leadership in this initiative underscores the SEC’s commitment to a fresh regulatory outlook.
The success of the crypto task force is contingent on input from a diverse array of stakeholders, including investors, industry players, academics, and other interested parties. This input will be facilitated through roundtables and various channels, including the SEC’s newly established crypto email address, crypto@sec.gov.
In response to these developments, US President Donald Trump issued an executive order on January 23, 2025, mandating regulators to create a federal framework overseeing digital assets while prohibiting the establishment of a central bank digital currency. Concurrently, the SEC issued Staff Accounting Bulletin (SAB) 122, which rescinded earlier guidance in SAB 121. The previous guidance had required financial institutions to reflect held client crypto assets as balance sheet liabilities. Under SAB 122, entities safeguarding crypto assets must evaluate the need to recognize liability associated with potential loss risks, aligning with existing recognition and measurement standards.
Commissioner Pierce’s positive stance on the crypto industry is well-documented, hinting at increased engagement and collaboration with industry players. This marks a shift from the previous dismissive attitude of former SEC Commissioner Gary Gensler, primarily encapsulated in the phrase “come in and register.” Presently, there is a surge in the introduction of new crypto and blockchain products in the US market, coupled with an uptick in crypto-related acquisitions. Many international market participants are eyeing the US market, with some opting for acquisitions rather than developing their products. It is expected that the new task force will foster responsible offerings in the US, stimulating growth and innovation in the industry.
As developments in the crypto space evolve, it is essential to stay informed. Follow-up discussions with the authors of this article can provide insights into new crypto product offerings or acquisitions in the US. Partnering with McDermott’s experienced capital markets and public companies lawyers can offer practical solutions and support for navigating the ever-changing regulatory landscape. Their dedicated crypto-exclusive team, led by Partner Joe Evans, boasts a proven track record in delivering cutting-edge solutions and empowering the future of finance through innovative crypto strategies.
