Interim SEC Chair Initiates Review of Crypto Regulations for Deregulation Boost

On April 5, 2025, Mark Uyeda, serving as the Acting Chairman of the Securities and Exchange Commission (SEC), instructed the SEC staff to conduct a review of various statements linked to the crypto realm. This directive stems from the Department of Government Efficiency (DOGE) recommendations and Executive Order 14192, known as ‘Unleashing Prosperity Through Deregulation.’ This move has significant implications for the cryptocurrency industry, particularly concerning the Howey Test application and regulatory alerts concerning digital currencies. The anticipated outcome of this evaluation is the establishment of a more favorable regulatory landscape for digital assets.

The primary aim behind the extensive review of staff statements by the SEC is to align these statements with the current agency priorities, in line with the current administration’s perspective on digital assets. During the previous administration, many SEC statements regarding cryptocurrencies were issued, reflecting a negative stance towards the industry, in contrast to the current administration’s more welcoming approach to blockchain innovation.

A key focus of the review process is to address the ambiguous definition of what qualifies as a security, a subject of debate during the prior administration. The Howey test, a legal standard introduced by a 1946 US Supreme Court ruling to determine investment contracts and securities, plays a central role in this discussion. By reevaluating these statements, the SEC is likely seeking to clarify any uncertainties and provide consistent guidelines for classifying assets as securities.

Moreover, the review encompasses guidance released by the SEC in 2022 following multiple cryptocurrency business failures. Companies involved in crypto markets were advised to disclose potential impacts to investors. This review signals a shift towards a less cautious view of digital assets compared to previous years.

Another aspect under scrutiny is the 2021 SEC statement cautioning investors about risks associated with funds invested in the Bitcoin futures market. This critique will likely lead to modifications or removal of past SEC statements critical of the crypto industry under the current administration.

This review process reflects the Biden administration’s broader initiative to create a more supportive regulatory environment for digital assets. It aims to reverse or amend earlier statements that undermined or criticized the crypto industry. The ongoing effort aligns with the administration’s priorities and signifies a step towards fostering a more lenient regulatory framework for digital assets.