The SEC is wasting no time in signaling a sea change in its approach to crypto. On January 21, 2025 – the first full day of the new Trump administration – Acting President Mark T. Uyeda launched a new crypto task force focused not on enforcement, but rather on “putting) the SEC on a sensible regulatory path that respects the limits of the law. »
The task force will be led by Commissioner Hester Peirce, nicknamed by many “the crypto mom” for her support of innovation and evolution in the crypto sector, while also opposing a so-called approach of “regulation by application” previously adopted by the Commission under the former mandate of the Commission. President Gary Gensler.
In announcing its new task force, the SEC outlined its goals and a new direction for its approach to crypto, which can be summarized as follows:
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OUT |
IN |
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President Gary Gensler |
President Paul Atkins (pending confirmation) |
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Commissioners Jaime Lizárraga and Caroline Crenshaw |
To be determined |
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Relying on enforcement as the primary means of regulating crypto is determined to implicate federal securities laws. |
Aim for clearer regulation and guidance and “deploy enforcement resources judiciously” |
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Uncertainty over who should register (and how to register) cryptocurrencies as securities |
Establish a practical and feasible registration process where warranted |
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Confusing legal environment for crypto innovators whose activities may involve federal securities laws |
Design clearly defined disclosure requirements and frameworks |
At the same time, no announcements have been made regarding the status or fate of the Cyber and Crypto Unit (CACU) of the SEC’s Division of Enforcement, which was created in 2017 and which the agency staffed additional lawyers and other interns in mid-2022. resources, signaling at the time that expansion was needed to, among other things, “control wrongdoing in crypto markets…”
With the recent change within the CACU and the launch of this latest agency task force – which is not housed in the SEC’s Enforcement division and instead focuses on developing clearer regulations and guidelines for the industry – the new administration is making good on its campaign promise to take a friendlier approach to crypto. And the creation of the task force is neither unexpected nor unwelcome for those seeking a path to crypto asset title registration and regulatory clarity beyond what has been so much discussed. Howey doctrine (and what we call Dreams Test), which the agency has relied on extensively since it filed its first crypto enforcement actions in 2013.1 and a growing number of SEC enforcement actions since then (often filed as “settled actions” which in themselves offer no binding precedential value, but are often considered anecdotal data from which enforcement actors industry and defense strive to identify useful trends and guardrails). It will be worth monitoring this initiative as well as that of other crypto regulators – the Commodity Futures Trading Commission (CFTC) in particular – especially in light of President Donald Trump’s executive order (which is not uncommon for new presidents) ordering a regulatory freeze for the time being, which our colleague Eric Crusius wrote about earlier this week.
With the same interest, we will follow the development of the situation on Capitol Hill. With Republicans now in control of the House Financial Services and Senate Banking committees, Congress and the White House are expected to work together on legislation addressing stablecoins and market structure reform, further defining the roles of the SEC and CFTC in crypto regulation. Additionally, the White House is working to create a crypto council to develop new regulatory policies, making 2025 an active and exciting year in this area.
For her part, Commissioner Peirce said the success of the new “crypto 2.0” working group will depend on input from “investors, industry players, academics and other interested parties” via roundtables and other channels. , including the commission’s new crypto email address. crypto@SEC.gov (perhaps, unsurprisingly, a “crypto@SEC.gov” memecoin launched within minutes of the SEC’s announcement of the new task force).
The SECond Opinions blog will continue to monitor crypto-related activities and provide updates. If you need additional information on this topic – or any topic related to law enforcement or securities investigations – please contact the authors or other members of the defense team. Holland & Knight securities application.
Remarks
1 See SEC v. WJ Howey Co., 328 US 293 (1946) for the so-called Howey test: (i) investment of money (ii) in a joint enterprise (iii) the profits of which must arise solely from the efforts of others.
