SEC Chairman Discusses Crypto Assets Regulation: Three Key Focus Areas: Issuance, Custody, and Trading

At a recent tokenization roundtable, the SEC chairman made an important speech on Crypto Assets regulation. He emphasized that as securities migrate from traditional databases to blockchain systems, this transition could fundamentally reshape the securities market. To make the United States a global Crypto Assets hub, the SEC must keep pace with innovation and consider regulatory reforms to accommodate on-chain assets.

The Chairman pointed out that an important task of the SEC is to develop a reasonable regulatory framework for the Crypto Assets market while continuously combating illegal activities. He stated that the SEC will no longer rely on ad hoc enforcement actions but will use its existing powers to establish practical standards for market participants. To this end, the SEC has established a special working group for Crypto Assets to coordinate efforts across various departments.

The chairman emphasized three policy areas:

issuance

The SEC will establish clear guidelines for the issuance of crypto assets that qualify as securities. Currently, there are few registered issuances, mainly due to the difficulty in meeting disclosure requirements. In the past, the SEC adopted an "ostrich mentality" or a "shoot first and ask questions later" strategy, but these approaches are inappropriate. The chairman has committed to promoting the formulation of new guidelines, considering additional guidance, exemptions, and safe harbors to pave the way for the issuance of crypto assets.

Accomplice

The SEC will grant registrants more autonomy to decide how to custody Crypto Assets. The repeal of SAB 121 is a positive step, but further clarification on the qualifications of qualified custodians is needed, and self-custody should be allowed in certain cases. The chairman also mentioned the possibility of abolishing the "special purpose broker-dealers" framework and adopting a more reasonable system.

Trading

The SEC supports allowing registrants to trade a wider variety of products and to engage in previously prohibited activities. The chairman has instructed staff to design a modern regulatory framework for ATS to accommodate Crypto Assets. He also discussed whether further guidance is needed to promote the listing and trading of Crypto Assets on national securities exchanges.

The chairman stated that during the development of a comprehensive regulatory framework, conditional exemptions for innovative products and services may be considered. He hopes to coordinate with the government and Congress to make the United States the best participant in the global Crypto Assets market.