Authors
Key takeaways
- The U.S. Securities and Exchange Commission’s (“SEC”) newly created Crypto Task Force (the “Task Force”) is led by Commissioner Hester Peirce.
- Commissioner Peirce issued a statement on February 4, 2025 mapping the key priorities for the Task Force.
- The Task Force is dedicated to developing a comprehensive and clear regulatory framework for digital assets that fosters innovation without becoming a haven for fraudsters.
- The Task Force is seeking input from market participants through meetings or written submissions.
On January 21, 2025, SEC Acting Chairman Mark T. Uyeda launched a Task Force dedicated to developing a comprehensive and clear regulatory framework for crypto assets and appointed Commissioner Hester Peirce to lead the Task Force. On February 4, 2025, Commissioner Peirce published a statement entitled “The Journey Begins”, setting out her own thoughts on the “crypto road trip” toward regulatory clarity.
In her statement, Commissioner Peirce acknowledges that over the past decade the Commission “incessantly slammed on the enforcement brakes as it lurched along a meandering route”, and while there will be risks this time around as well, the Task Force provides an opportunity to “create a regulatory framework that both achieves the Commission’s important regulatory objectives—including protecting investors—and preserves industry’s ability to offer products and services”.
Before discussing the Task Force’s objectives, Commissioner Peirce noted several disclaimers including: (i) while the Task Force wants people to have freedom to experiment, there must be rules and that the industry which will not be a haven for fraudsters, (ii) the Commission staff are processing applications for exemptive relief, requests for no-actions letters and registration statement, but increased volumes could prove challenging, and (iii) the commitment to a better regulatory environment should not be viewed as an endorsement of any crypto coin or token.
Commissioner Peirce’s statement sets out a brief overview of the key objectives for the Task Force:
- Security status: Clarifying the status of the crypto assets under securities laws
- Scoping out: Identifying areas that fall outside of the Task Force’s jurisdiction
- Chain and token offerings: Task Force may recommend SEC action to provide temporary prospective and retroactive relief for coin/token issuers
- Registered offerings: Creating viable registration pathways
- Special purpose broker dealer: Updating broker-dealer regulations. The Task Force will work with the public to identify other obstacles to registration
- Custody solutions for Investment Advisers: Addressing custody regulations for investment advisors
- Crypto-lending and staking: Creating regulations for crypto lending and staking
- Crypto exchange trade products: The SEC is receiving Self-Regulatory Organizations proposed rule changes to list new types of crypto exchange-traded products. The Task Force will provide clear statements about the approach used when approving or disapproving applications
- Clearing agencies and transfer agents: Working with market participants to modernise the clearing and settlement rules for tokenized securities
- Cross-border sandbox: Collaborating on cross-border experimentation
Acknowledging that the road ahead will be daunting, Commissioner Peirce noted that the Task Force is open to collaborating and engaging with market participants and provides instructions on how to engage with the Task Force (whether it be through written statements or meetings (in person or virtual)) to potentially influence the regulatory landscape. This marks a significant shift in the SEC’s approach to the regulation of crypto assets seemingly seeking solutions to foster innovation within a rules-based system. Reed Smith will continue to monitor and comment on any developments.
Client Alert 2025-043