SEC launches crypto task force to create regulatory clarity

Relations between Wall Street’s top cop and the US cryptocurrency industry are on the mend following more than four years of rift.

On Tuesday, the Securities and Exchange Commission announced that it is leading efforts to establish a regulatory framework for digital assets through the creation of a new crypto group.

This program, which will be led by the Republican Commissioner, Hester Peirce, was the act of acting chairman Mark Uyeda following his appointment to this position by President Trump on Monday. Uyeda, a Republican commissioner, will serve in this position until Paul Atkins, Trump’s permanent nominee to lead the agency, is confirmed by the Senate.

FOX Business first reported in November that the group was a possibility, with Hester Peirce, affectionately referred to by the industry as “Crypto Mom,” expressing interest in leading such a group.

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As FOX Business previously reported, the task force will work closely with industry players to create an open dialogue that will allow for a friendly regulatory environment. Tuesday’s announcement revealed that the task force will focus on helping the commission draw up clear regulatory frameworks, provide authentic registration methods, create meaningful disclosure frameworks, and use resources wisely. It will also coordinate with other government agencies, including the Commodity Futures Trading Commission, which is ready to take a bigger role in regulating crypto.

The SEC, under the leadership of Biden chairman Gary Gensler, has brought more than 100 legal actions against crypto players in the past four years as the commission has tried to bring the industry into compliance. Many of the lawsuits were brought on credible allegations of fraud and deception, but others focused on companies failing to register their sales of digital assets as securities.

Industry participants have long complained that the financial isolation of cryptocurrencies and the blockchain technology they use makes them less suitable for regulation than traditional securities, namely stocks and bonds. They often call on regulators and Congress to create a new regulatory framework specific to digital assets.

However, Gensler believes that traditional securities laws were sufficient to properly regulate the industry and that most digital assets other than bitcoin are securities, suing companies that oppose this view by refusing to register with the commission.

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SEC Chairman Gary Gensler participates in a meeting of the Financial Stability Oversight Council at the US Treasury on July 28, 2023 in Washington, DC. The council met to present a report on the Council’s Committee on Climate Risk a (Kevin Dietsch / Getty Images / Getty Images)

President Trump has promised a touch of light regulation that will benefit emerging industries such as artificial intelligence and crypto. Since his election on November 5, he has appointed a number of industry lawyers to key leadership positions at the Treasury, SEC and CFTC, and named venture capitalist David Sacks the first-ever crypto and AI ‘czar’.

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Peirce and the crypto task force are already accepting comments about regulation from the public via email and will hold roundtables for industry participants in the future.

“This project will take time, patience, and hard work …,” Peirce said in a press release announcing the plan. “We look forward to working with the community to promote a regulatory environment that protects investors, facilitates capital formation, promotes market integrity, and supports innovation.”