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The SEC Chairman reveals a new direction for the regulation of cryptocurrency assets in the U.S., focusing on issuance, custody, and trading.
SEC Chairman Discusses New Directions in Encryption Asset Regulation
Recently, the chairman of the U.S. Securities and Exchange Commission ( SEC ) delivered a keynote speech at a tokenization roundtable, outlining the latest views on the regulation of encryption assets.
The chairman pointed out that securities are migrating from traditional databases to blockchain-based distributed ledger systems, and this transition could reshape every aspect of the securities market. He likened this process to the shift from analog to digital audio, believing it will bring entirely new methods of issuance, trading, holding, and utilizing securities.
In order to make the United States a global encryption hub, the SEC must keep pace with innovation and consider reforming existing rules to accommodate on-chain securities. The chairman emphasized that rules designed for traditional securities may not be applicable to on-chain assets and could even hinder the development of blockchain technology.
He stated that the SEC will no longer rely on temporary enforcement actions in the future, but will use its existing rule-making authority to establish workable standards for market participants. The SEC has also formed a special task force on encryption to coordinate the work of various internal departments.
The chairman emphasized the reform directions in three policy areas:
Issuance: The SEC will establish clear and reasonable guidelines for the issuance of encryption assets, consider adjustments to existing registration forms, and explore whether additional guidance, exemptions, and safe harbor provisions are needed.
Custody: The SEC will grant registrants more autonomy to decide how to custody encryption assets. The Chair supports clarifying which custodians meet the qualifications of "qualified custodians" and considers allowing self-custody in certain cases.
Trading: The SEC will allow registrants to trade a wider variety of products on its platform. The chairman stated that they will explore designing a modernized ATS regulatory framework to better accommodate encryption assets and consider facilitating the listing and trading of encryption assets on national securities exchanges.
The Chairman also stated that the SEC will consider granting conditional exemptions to market participants seeking to launch new products and services. He emphasized that the SEC's goal is to make the United States the best place in the world for encryption asset market participation.