The SEC's Crypto Course Reversal
The U.S. Securities and Exchange Commission has been busy over the past few weeks, hinting at a brighter future for crypto companies.
Recently, the agency closed or withdrew several high-profile cases against popular cryptocurrency platforms, including Coinbase, Binance, Tron, ConsenSys, OpenSea, Robinhood, Uniswap, and Gemini. This sudden shift in approach has left many industry experts and investors wondering what it means for the future of regulation.
SEC Commissioner Hester Peirce announced that she would be leading a new crypto task force at the agency, aimed at developing more policy guidance for the Division of Enforcement. In an interview with CoinDesk, Peirce stated that the SEC is working to "get back to using our enforcement division for its intended purpose" and letting regulatory divisions do the hard work of crafting rules.
"We're really trying to get back to using our enforcement division for its intended purpose, and letting the regulatory divisions do the hard work of figuring out how to craft rules, guidance [and] interpretations," she said. "And then enforcement has a role after that, of course, to enforce the rules that are on the books. But this has just been an area where we've kind of gone about it backwards, and we're trying to right the ship here."
The industry has been taking a victory lap with these recent announcements, but some experts caution that the situation is not without risk.
Amanda Tuminelli, chief legal officer at DeFi Education Fund, said: "I don't think that we've won. I won't think that we have won until there are clear final rules on the books that make it clear, that are durable wins that make it clear that the industry is going to be able to innovate and exist for years in the future."
On the other side of the spectrum, former Commodity Futures Trading Commission Chair Timothy Massad suggested that Congress should focus on stablecoins before considering any market structure legislation.
Tuminelli also expressed concern that some builders might take these recent signs to mean "it's just open season," even though she expects law enforcement agencies to continue cracking down on outright criminal activity.
Outside of enforcement actions, the crypto industry is looking to the SEC for another purpose: Approving a broad swath of new exchange-traded products backed by, or tracking the prices of digital assets that weren't under significant discussion a year ago.
Companies like Canary, Grayscale, and WisdomTree have filed initial paperwork for ETPs tracking the prices of cardano (ADA), solana (SOL), XRP (XRP), litecoin (LTC), hedera (HBAR) and polkadot (DOT). This development has raised hopes that retail and institutional traders will soon be able to gain exposure to these digital assets through this type of regulated investment product.
What does the future hold for crypto regulation? Will these recent developments mark a turning point, or are we just seeing a temporary reprieve? Only time will tell.