SEC takes on updating its regulations for crypto
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Hester Peirce in May 2024. Photo: Al Drago/Getty
The Securities and Exchange Commission, a day after the resignation of chairman Gary Gensler, announced a crypto task force Tuesday charged with putting the agency on what it called a "sensible regulatory path."
Why it matters: The crypto industry has long sought updates to rules around securities that would take the characteristics of blockchain technology into consideration.
- Instead, it was met with hostility.
The task force, launched by acting SEC chairman Mark Uyeda, will be led by commissioner Hester Peirce with veteran staff members also assigned to the effort.
- "Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud. The SEC can do better," the agency's statement said.
Zoom in: "We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation," Peirce said in the statement.
- She's earned the moniker "Crypto Mom" for often challenging Gensler on agency actions against the industry, but we'll see if that holds up as she starts putting draft rules down on paper for feedback.
Context: The refrain to the crypto companies from the regulator, even before the Biden administration, has been to "come in and register." But industry participants have said that's just not possible under the framework of existing rules.
- Not long ago, the SEC put out a list of crypto assets that had successfully done so, but they were almost entirely approved through an acrimonious settlement process. In most cases, the underlying companies are now gone or unrecognizable.
- More recently, the trading app Robinhood detailed its frustrations in attempting to register its crypto trading activities with the agency, in testimony before Congress. Instead, it got threatened with a lawsuit.
What we're watching: This is bigger than the task force, but Peirce has also been a critic of the agency's gag rule, which forbids those it settles with from discussing the process or decision in any way.
