Mark T. Uyeda, President of the SEC, Washington DC, March 21, 2025
Good afternoon and welcome to the inaugural round table of the Crypto Task Force, which will explore the complex legal problems involved in the classification of cryptographic assets under federal laws on securities.
In the wake of the 2008 financial crisis, a person or a group under the name of Satoshi Nakamoto published a white paper describing a new electronic cash system between peers called Bitcoin which helped to form a brand new group of digital assets. (1) Sept-seven years later, market participants, lawyers, academics, Crepts, are still grappling with the state of the state of the state of the state of the Crupoto and regulations. Securities laws. (2) Dry c. WJ Howey Co.(3) (known as “Howey Test ”) to cryptographic assets. (4)
Application challenges HoweyThe investment contract test is not unique to the crypto. I have a first -hand experience with her: as chief advisor to California Corporations Commisser, I supported before a California court of appeal that the offer of an unsecured deposit certificate wrapped with the separate reception of a bonus payment constituted an investment contract. (5) Although the State Court concluded that this was not the case, (6) other Federal Appeal Courts held that the State Court concluded that this was not the case, (6) Howey test. (7)
In the following years HoweyVarious appeal courses are divided on various shades and other aspects of this decision. For example, made Howey Demand the pooling of investor funds and the distribution of profits (8) of investors or is it sufficient that investors need only risks with the promoter? (9) In certain circuits, the fortune of all investors must depend on the expertise of the promoter, (10) but in other circuits, the wealth of the investor must be “linked to parties and third parties”. Similarly, the appeal courts are divided as to whether an investment contract requires after-sales efforts by the promoter or if “important pre-purchase management activities to ensure the success of the investment” is enough. (12)
The differences in opinions between the various courts are not unusual. After all, a judicial opinion is limited to the particular facts and circumstances of this case. When judicial opinions have created uncertainty for market players in the past, the Commission and its staff have intervened to provide advice.
For example, the Commission has clarified the sense of the trustee obligation of an advisor in place Howey to offers and sales of WHISKY (14) and condominium warehouse receipts, (15) among others. This approach to the use of notice and trade regulations explaining the Commission’s reflection process through versions – rather than through application measures – should have been considered to classify cryptographic assets under federal laws on securities. Today’s round table is an important first step to respond to this concern.
Thank you to the Crypto working group and the panelists for your time to prepare you for this round table. I look forward to the discussions to follow.
At the dry: it is finally spring, the commissioner of the Sec Hester M. Peirce
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