U.S. SEC's Crypto Trading Roundtable Explores Easing Regulations for Platforms

Key Points:

• The U.S. Securities and Exchange Commission hosted its latest crypto roundtable, focusing on trading regulations.

• Interim Chairman Mark Uyeda proposed a temporary, limited approach to overseeing crypto trading while the agency considers long-term plans.

WASHINGTON, D.C. — U.S. Securities and Exchange Commission (SEC) interim Chairman Mark Uyeda proposed the idea of a short-term regulatory framework for crypto oversight, allowing firms to continue innovating while the agency works on a permanent solution for digital asset regulation. He shared his thoughts during a Friday event at the SEC's Washington headquarters.

Uyeda suggested, "We should explore whether a more efficient regulatory method exists within an accommodating federal framework." In a recorded statement during the SEC’s latest crypto industry roundtable, he added, "While the Commission develops a long-term resolution, a temporary, conditional exempt relief framework for both registrants and non-registrants could foster further innovation in blockchain technology in the U.S. in the near future."

The securities regulator is awaiting Congress to pass a crypto market-structure law that would enable it to begin creating the rules the digital asset sector has been requesting. While lawmakers involved in this effort suggest it could happen later this year, it will still take several months before the law is in place, and even longer for the SEC and other relevant federal agencies to draft and implement regulations.

During the second in a series of crypto roundtables hosted by the agency as it revises its stance on digital assets, interim SEC Chairman Mark Uyeda was still leading the agency, although incoming Chairman Paul Atkins is set to take over. Once Atkins arrives, Uyeda and fellow Republican Commissioner Hester Peirce, a crypto advocate, will remain on board.

The Republican commissioners highlighted the interest of crypto platforms in managing both SEC-regulated activities and business outside the agency's jurisdiction, all within the same entity.

"What can and should we do in the short term, and what should Congress consider in the longer term to ensure that regulatory gaps are addressed as firms increasingly seek to combine securities and non-securities trading activities?" asked Peirce, who heads the SEC Crypto Task Force.

The SEC's sole Democratic commissioner, Caroline Crenshaw, argued that recent market disruptions and company failures have exposed the "mismatch between investors' expectations and reality." She explained, "Crypto trading platforms are unique because they often provide multiple services under one roof, sometimes including bridge clearing and custody." In traditional finance, these functions are typically handled by separate registered entities due to the "high risk of conflicts of interest and risks for investors."