SEC Continues Cryptocurrency Journey
In a comprehensive public address titled “The Journey Begins,” SEC Commissioner Hester Peirce outlined the upcoming initiatives of the SEC’s Crypto Task Force. As the head of the Crypto Task Force, Commissioner Peirce’s address sets a wide-ranging agenda for the SEC’s approach to cryptocurrency in the coming four years.
The discourse commences with a critique of the SEC’s historical stance on crypto, stating that it has been a prolonged process to navigate the challenges presented and will require a significant amount of time to rectify. The Commission has had interactions with the crypto industry for over a decade, with notable events such as the initial bitcoin exchange-traded product application in 2013, a fraud case with a crypto component that same year, and the DAO Section 21(a) report in 2017. Since then, there have been various enforcement actions, no-action letters, exemptive relief, discussions in rulemaking proposals, considerations in reviews of registration statements, and approvals of SRO proposed rule changes for listing crypto exchange-traded products.
Additionally, Commissioner Peirce emphasizes that future SEC actions may not transpire swiftly due to the complexity and ongoing litigation surrounding numerous cases. She points out the necessity for meticulous work across the agency and collaboration with other regulators to untangle the web of legal uncertainties in the crypto space. The Task Force aims to reach a favorable resolution but stresses the importance of proceeding in an organized, pragmatic, and legally sound manner.
The discourse also touches upon libertarian ideals, highlighting individual decision-making rights while cautioning against expecting government intervention or bailouts for poor choices. Commissioner Peirce makes it clear that although individuals have the freedom to choose, they are not above SEC regulations, and fraudulent behavior will not be tolerated.
The crux of the address unveils a ten-point agenda for the SEC Crypto Task Force, which includes determining which crypto assets qualify as securities, assessing areas within and beyond the SEC’s purview, contemplating regulatory relief for previous coin offerings, revising protocols for registering securities token offerings, enhancing regulations for broker-dealers operating in crypto, refining custody options for investment advisers, clarifying rules for crypto lending and staking programs, reevaluating policies on crypto exchange-traded products, engaging with clearing agencies and transfer agents involved in crypto transactions, and contemplating a cross-border sandbox for controlled experimentation.
Commissioner Peirce concludes her address by outlining avenues for public engagement with the Crypto Task Force, inviting written submissions and in-person interactions to foster collaboration and gather insights from industry stakeholders.
