tl;dr
The US Securities and Exchange Commission (SEC) is set to review internal staff directives related to its oversight of the cryptocurrency industry, in line with President Trump's deregulation efforts. Acting SEC Chair Mark Uyeda has stated that the review may lead to changes or withdrawal of certain...
The US Securities and Exchange Commission (SEC) is set to review internal staff directives related to its oversight of the cryptocurrency industry, in line with President Trump's deregulation efforts. Acting SEC Chair Mark Uyeda has stated that the review may lead to changes or withdrawal of certain statements to ensure alignment with the agency's current priorities.
The reassessment primarily targets the SEC's framework for determining if a digital asset qualifies as a security, particularly the reliance on the Howey Test. This could significantly impact how crypto assets are evaluated and potentially create a more level playing field for American investors.
The SEC is also reviewing regulatory concerns around mutual funds investing in Bitcoin futures and assessing whether state-chartered banks can act as qualified custodians for digital assets under the SEC's Custody Rule. The crypto community sees this as a shift towards a more modern and flexible regulatory approach that could reshape the crypto landscape for retail and institutional investors.
The US Securities and Exchange Commission (SEC) is preparing to review several internal staff directives that influence how the regulator oversees the crypto industry. This move aligns with President Donald Trump’s latest Executive Order on deregulation. It also follows guidance from the Department of Government Efficiency (DOGE), currently led by Elon Musk.
On April 5, Acting SEC Chair Mark Uyeda noted that the upcoming reviews could result in changes or full withdrawal of some statements. He emphasized that the agency’s objective is to ensure its guidance remains relevant and consistent with its current priorities.
One of the main targets of this reassessment is the SEC’s current framework for determining whether a digital asset qualifies as a security. This guideline relies heavily on the decades-old Howey Test. It also reflects the views of former SEC official Bill Hinman, shared during a 2018 speech. Hinman argued that the degree of decentralization behind a token should matter more than how it was originally sold. This view has influenced several enforcement decisions, including the legal battle with Ripple over XRP. However, many in the industry argue that the Howey Test is no longer suitable for modern blockchain technologies.
Beyond the Howey-based framework, the SEC is also reviewing several other documents. One of these is a bulletin outlining regulatory concerns around mutual funds investing in Bitcoin futures. The financial regulator is also reviewing a risk alert from the Division of Examination. This alert warns that digital assets pose unique investor risks, including regulatory uncertainty and cybersecurity threats. Additionally, the Commission is reassessing whether state-chartered banks and trust companies can act as qualified custodians under the SEC’s Custody Rule.
The crypto community believes the SEC’s broad reassessment points to a shift toward a more modern and flexible regulatory approach. This shift could reshape the crypto landscape for both retail investors and institutional participants.