Acting U.S. Securities and Exchange Commission (SEC) Chairman Mark T. Uyeda has criticized the current enforcement-first method of regulating cryptocurrencies. He emphasized that:

“This approach of using notice-and-comment rulemaking or explaining the Commission’s thought process through releases—rather than through enforcement actions—should have been considered for classifying crypto assets under the federal securities laws.”
Translation: Uyeda suggests that a more methodical approach should be taken towards crypto asset classification.

Despite the time elapsed since Satoshi Nakamoto released the Bitcoin whitepaper, stakeholders are still facing significant uncertainties about cryptocurrency status in U.S. law. Uyeda observed:

“This disagreement is most pronounced when it comes to the application of the investment contract test established by the Supreme Court in its 1946 opinion in SEC v. W.J. Howey Co. (known as the ‘Howey test’) to crypto assets.”
Translation: There is confusion about how the investment contract test is applied to crypto assets.

Key Takeaways from the SEC’s First Crypto Roundtable:

• Regulatory Clarity in Focus – SEC aims to refine digital asset oversight.
• Hester Peirce Pushes for Flexibility – Calls for a workable crypto framework.
• Mark Uyeda on Policy Gaps – Stresses the need for clearer guidance in regulations.

Hester Peirce Led Crypto Roundtable

Uyeda’s statements represent a shift from the SEC under former Chair Gary Gensler. The meeting organized by the Crypto Task Force addressed longstanding gaps in the regulatory framework. Peirce advocated for a flexible regulatory framework, indicating that:

“Spring signifies new beginnings and we have a new beginning here, a restart of the commission’s approach to crypto regulation.”
Translation: Peirce highlights a fresh start in how the SEC approaches crypto regulation.

Uyeda Hints At SEC Scrapping Biden-Era Crypto Asset Custody Proposal

Uyeda implied that the SEC might withdraw a controversial custody proposal from the Biden administration, which would greatly impact how financial companies secure crypto assets for their clients.

Upcoming SEC Chair Confirmation Hearing

On March 27, 2025, SEC Chair nominee Paul Atkins is set to testify before the Senate Banking Committee. If confirmed, Atkins might lead a significant transformation in the SEC’s approach to cryptocurrency regulation.

Key Takeaways:

• Mark T Uyeda rejects the enforcement-first method for cryptocurrency regulation.
• He proclaimed the need for a comprehensive method to classify crypto assets within federal securities laws.
• An upcoming confirmation hearing for Paul Atkins may reshape SEC policy towards crypto.