US SEC offers guidelines on how securities laws can be applied to crypto

Like the SEC, the CFTC, the derivatives trading regulator, also works to regulate prediction markets.

The United States Securities and Exchange Commission (SEC) has moved closer to creating safeguards to control how cryptocurrencies are regulated.

In a recent commission-level directive submitted to the White House Office of Information and Regulatory Affairs (OIRA), the SEC explained how securities laws can be applied to crypto. If followed, the new guidelines could affect how crypto-focused companies register and operate their businesses in the country.

New Guidelines for the Crypto Market

According to the OIRA website, the guidance was titled “Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets.”

The website shared few details about the SEC’s proposal. Nonetheless, an SEC spokesperson informed Bloomberg that the financial agency “will consider interpretative guidance around a token taxonomy for crypto assets.” This means that factors such as a crypto’s inherent properties, behavior, and use cases would be considered in determining whether or not securities laws apply.

With these guidelines in place, crypto companies would know how to go about registration, operations, and investor engagement. It should be noted that committee-level guidance has more power than staff-level guidance. Yet it does not meet the requirements to become a rule, which include processes such as public notice and comment.

This latest move aligns with Paul Atkins’ goal of bringing crypto-friendliness to the country since he became SEC chairman. A few weeks ago, he hinted at the agency’s commitment to establishing structural crypto regulation despite falling cryptocurrency prices.

CFTC calls for regulation of prediction markets

The SEC is not the only Wall Street regulator advocating for a crypto-friendly regulatory framework. On March 2, the Commodity Futures Trading Commission (CFTC) submitted an action on prediction markets to the White House OIRA.

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Michael Selig, Chairman of the CFTC, provided some clarification on the measurement of forecast markets, saying:

“We are going to set very clear standards for what can be self-certified in our markets and what cannot be and how to evaluate different products offered in the space.”

The CFTC’s latest move comes amid increased investor attention to prediction markets, popularized by major platforms Polymarket and Kalshi.