| Key Points: – The SEC Crypto Task Force meeting discussed whether existing securities laws, like the Howey Test, are outdated for crypto. – Under Acting Chair Mark Uyeda, the SEC has begun reversing aggressive crypto enforcement policies. |
The U.S. Securities and Exchange Commission (SEC) convened its inaugural Crypto Task Force meeting on Friday, marking a pivotal step in its ongoing efforts to modernize digital asset regulation.
The roundtable brought together 11 speakers from legal, academic, and industry backgrounds to weigh in on this complex issue.
SEC Crypto Task Force Meeting to Review Digital Asset Regulation
Chaired by SEC Commissioner Hester Peirce and established by Acting SEC Chair Mark Uyeda in January, the Crypto Task Force aims to explore whether existing securities laws are sufficient for governing the rapidly evolving crypto landscape or if a new framework is necessary.
A central topic of Crypto Task Force meeting was whether digital tokens should be regulated under the same legal framework that governs traditional securities like stocks. Critics argued that the SEC’s current approach—relying heavily on the 80-year-old Howey Test to define securities—has created legal uncertainty, stifled innovation, and driven crypto firms to relocate overseas.
“Howey was never intended to regulate an entire industry, nor technology,” said Teressa Goody Guillen, a panelist and former SEC official.
Republican Commissioner Peirce, long a proponent of crypto innovation, led the discussion with a focus on creating a more balanced and transparent approach. However, not all voices were in agreement. Democratic Commissioner Caroline Crenshaw warned against crafting separate, potentially weaker rules for crypto:
“Modifying the law to facilitate the success of a chosen product category is fraught with risk— not only of weakening regulatory protections for that category, but of creating the negative domino effect on other areas of the market protected by the same laws,” she cautioned.
Call for a More Technology-Neutral Approach
Panelist John Reed Stark, President of a cybersecurity consultancy, criticized the SEC’s past enforcement tactics, calling them a means of “preserving bureaucratic power” rather than protecting investors. Stark and others urged the agency to adopt a more “technology-neutral” stance, emphasizing use cases over broad classifications.
Several participants questioned whether private litigation should play a larger role in regulating the space. Many advocated for distinguishing digital assets based on functionality rather than lumping all tokens into a single regulatory category.
Under former SEC Chair Gary Gensler, the agency faced backlash for its “regulation by enforcement” strategy, which some saw as overly combative. Gensler maintained that the existing laws were sufficient, pointing to other regulatory structures covering securities, commodities, and anti-money laundering.
Since Uyeda assumed leadership, the SEC has begun reversing course on several fronts. It has walked back multiple crypto-related lawsuits and softened guidance that had previously restricted banks from offering custody services for digital assets.
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