The Securities and Exchange Commission announced a recent crypto task force dedicated to developing clear regulatory frameworks, marking a shift away from its previous enforcement-focused approach to digital assets.
The initiative, announced by acting SEC Chairman Mark T. Uyeda and led by Commissioner Hester Peirce, arrives as fund issuers await clearer guidelines for launching investment products—a development that might reshape how firms approach digital asset offerings after years of regulatory uncertainty.
The duty force will collaborate with various SEC divisions, other federal agencies, and the general public to determine sensible regulatory paths, based on the SEC announcement. Under Peirce’s leadership, the group goals to offer realistic paths to registration and craft sensible disclosure frameworks.
“Considered one of the directives of the duty force will likely be to create a transparent path to registration for crypto market participants,” Amy Lynch, founder and president of strategic consultancy firm FrontLine Compliance, told etf.com in an email. “Despite the fact that a current path already exists, the method has much room for improvement.”
The duty force goals to deal with custody rules which have previously hindered crypto product innovation, based on Lynch. “The present custody rules that exist don’t account for cryptocurrencies or digital assets,” she said.
A proposed custody rule from 2023 attempted to deal with digital assets but “fell well in need of what the market needed,” Lynch noted. The duty force may revise these requirements through the SEC’s Division of Investment Management.
Coordination between regulators will play a key role because the framework develops. “There could have to be coordination with the [Commodity Futures Trading Commission] especially if the definition of a security is updated so as to add clarity to when crypto is a security and when it is a commodity,” Lynch explained.
While regulatory changes take time, Lynch suggests the initiative opens recent opportunities. “The floodgates at the moment are open, and now’s the time for funds to send in applications as we’ll see many more digital asset ETFs come to market in the following yr,” she added.