The Securities Exchange Commission (SEC) is officially changing its approach to regulating cryptocurrencies. What exactly will the regulator do?
On 20 January 2025, SEC chairman Gary Gensler left the SEC. Since his appointment, he had been engaged in a pronounced fight against the crypto industry. In particular, Gensler liked to refer to all coins as “unregistered securities,” which then became the basis for lawsuits. Fortunately, Donald Trump’s rise to power is already changing the government’s approach to crypto.
The SEC’s New Deal: How the change in leadership will affect crypto
Changes in the SEC’s approach to digital assets became noticeable immediately after the resignation of Gary Gensler. Already on 21 January it became known that the Commission will launch a separate working group on cryptocurrencies, which will be headed by Republican Hester Pearce. She has long been known for supporting the world of coins, so the event was perceived positively.
SEC Commissioner Hester Pearce
Pearce has now published a note on the regulator’s website outlining the main challenges and priorities for the relevant group and the SEC in relation to digital assets. First of all, the regulator will determine which cryptocurrencies qualify as securities and which do not. That is, the Commission leadership immediately wants to provide clarity in this matter for investors.
Hester Pearce separately mentioned the priority of defining some tokens as such, which are not securities. That is, the regulator will definitely have no questions for both their creators and ordinary buyers.
Here’s a commentary on the matter cited by The Block.
The working group is also considering recommending that the Commission take steps to provide temporary prospective and retrospective relief for coin or token offerings if the issuing entity or other responsible party provides certain information, keeps it current, and agrees not to challenge the SEC’s jurisdiction in the event of litigation alleging fraud related to the purchase and sale of the asset.
Former SEC Chairman Gary Gensler
Most importantly, Hester Pearce has indicated a willingness to cooperate with various experts. That is, we can assume that the Commission will take into account the experience of coin regulation in other countries and listen to the industry at the same time.
She continues.
We will collaborate with other federal agencies, state securities regulators and our international partners. We are inviting developers, enthusiasts and skeptics to dialogue so that together we can determine final rules and interim steps that can foster innovation during this period.
So far, all indications are that the Commission will indeed create clarity on digital asset management. This approach will be vastly different from what the SEC did under Gary Gensler.
Back then, the Commission did not provide clear rules for companies to operate, yet it constantly sued companies. In addition, SEC management required token issuers to register with the regulator. Although as representatives of Ripple and other companies repeatedly noted, the details of this procedure remained unknown.
According to Decrypt’s sources, the SEC has already cut a specialised unit for controlling cryptocurrencies. Thus SEC will redistribute more than 50 lawyers and other employees who were previously engaged in the regulation of digital assets. Although judging by the results of the last few years, they did not do it very effectively.
What will happen to the regulation of cryptocurrencies in 2025?
The main tasks of the Securities Commission for the sphere of cryptocurrencies turned out to be ten, although Hester Pearce emphasises that this is not the final list. Here are the key points from the document of the head of the cryptocurrency division at the SEC.
- Securities status: determining the status of cryptoassets under securities laws is key to many other issues. The working group is actively exploring different types of cryptoassets;
- Scoping: the working group will work to identify areas that do not fall within the Commission’s jurisdiction;
- Registered Offerings: the working group will consider working with staff to recommend to the Commission changes to existing registration procedures;
- Asset custody solutions for investment advisers: we will work with investment advisers to ensure that they have an appropriate regulatory framework within which they can safely, legally and practically custody client assets themselves or through third parties;
- Cryptocurrency lending and staking: we need to clarify whether cryptocurrency lending and staking programmes are subject to securities laws – and if so, how. We plan to identify how such programmes can be structured under the legislation;
- Clearing agencies and transfer agents: the working group also plans to explore the intersection of cryptocurrencies with the rules governing clearing agencies and transfer agents. We will continue to engage with market participants interested in tokenising securities or using blockchain technology to modernise traditional financial markets.
Securities Commission logo
In addition, Pearce separately noted that the cryptocurrency working group will be accepting requests for offline and online meetings with members of the public. In other words, the regulator really wants to hear outside opinions on the proper approach to the coin market.
Obviously, 2025 will be a pivotal year for the regulation of digital assets in the US. So far, everything goes to the fact that the Securities Commission will stop fighting with cryptocurrency companies and create clear rules of operation for the sphere. And this will definitely attract new players and strengthen America's position in the industry.
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