The U.S. Securities and Exchange Commission (SEC) is preparing to propose its first official legislation that establishes stricter rules for the cryptocurrency business—specifically, a regulated framework for the legal issuance of digital assets under "Crypto Regulation."
SEC Chairman Paul Atkins has long identified this legislative goal as one of the key points in his cryptocurrency regulation plan, and the agency has set August 14 as the date for a meeting where a three-member commission (all Republicans) will present the SEC's proposal for public discussion. On Monday evening, the regulator published a notice for a Friday meeting with an unusually short deadline, although this issue has been on the agency's agenda for some time.
The initiation of the approval process for Reg Crypto—which reportedly includes a "custom offering regime for certain investment contracts"—followed shortly after the Senate failed last week to begin key votes on the Clarity Act for digital asset markets, which was intended to establish a legal framework for cryptocurrency market rules in the United States.
"We view this as the first of several rulemaking initiatives the SEC will undertake to provide regulatory certainty for crypto assets after the Senate failed to advance the Clarity Act for crypto market structure before the August recess," wrote TD Cowen analyst Jaret Seiberg in a note to clients sent after the SEC's notice.
This proposal is expected to provide cryptocurrency companies with the opportunity to raise capital for projects without needing to register with the SEC, as well as allow them to exit the agency's jurisdiction once they are no longer directly managing the projects.
Earlier, Atkins and the agency held a series of lengthy policy discussions on cryptocurrencies aimed at clarifying their regulatory stance on digital assets, but these staff statements lack sufficient long-term durability. In the future, it will be more difficult to overturn formal rulemaking.
However, the development and finalization of the rules will likely take several more months. The first stage will include a comment period—typically two or three months—followed by potentially lengthy revisions.
Reg Crypto will join a series of other important steps taken or in development by the agency to advance the U.S. cryptocurrency industry. One major step was a joint stance with the Commodity Futures Trading Commission (CFTC) on "taxonomy," defining their approach to various crypto assets and the jurisdictions to which they belong. The agency is also continuing its work on its approach to tokenized securities, which Atkins frequently mentions as one of the SEC's primary cryptocurrency moves.
Atkins has repeatedly emphasized the importance of Congress passing a law that sets boundaries for cryptocurrency markets; however, lawmakers have failed to advance a bill that still has slim chances of being passed next month.
