After the repeal of SAB 121, US Securities and Exchange Commission (SEC) commissioner Hester Peirce released a list of what is yet ahead of the crypto task force.
- Security Status: The status of crypto assets under the securities laws is fundamental to resolving many other questions. The Task Force is working hard to examine different types of crypto assets.
- Scoping Out: The Task Force will work to help identify some areas that fall outside the Commission’s jurisdiction. As an initial step, the staff welcomes requests for no-action letters. No-action letters typically come in the form of a staff statement addressing specific circumstances spelled out in the letter under which the staff will not recommend enforcement action to the Commission. This statement is specific to the particular circumstances but gives the broader public a helpful window into the staff’s thinking.
- Coin and Token Offerings: The Task Force also is thinking about the possibility of recommending Commission action to provide temporary prospective and retroactive relief for coin or token offerings for which the issuing entity or some other entity willing to take responsibility provides certain specified information, keeps that information updated, and agrees not to contest the Commission’s jurisdiction in the event of a case alleging fraud in connection with the purchase and sale of the asset. These tokens would be deemed to be non-securities and thus there would be no uncertainty as to whether they would be able to trade freely on secondary markets not registered with the SEC as long as the information is kept up-to-date and accurate. This approach would bridge the gap until a more permanent rule or legislation could be finalized. It would provide a pathway for existing tokens to find their way out of the fog of uncertainty that obscures a feasible path forward and would encourage the provision of greater disclosure.
- Registered Offerings: The Task Force will consider working with staff to recommend that the Commission modify existing paths to registration, including Regulation A and crowdfunding, so that people interested in registering token offerings will have a viable path for doing so.
- Special Purpose Broker Dealer: The Task Force will explore possible updates to the special-purpose broker dealer no-action statement, which in its current form has not been a success. An initial change we may suggest is that the statement be expanded to cover broker-dealers that custody crypto asset securities alongside crypto assets that are not securities. We will work with the public to identify other obstacles to registration.
- Custody Solutions for Investment Advisers: We will work with investment advisers to provide an appropriate regulatory framework within which advisers can safely, legally, and practically custody client assets themselves or with a third-party.
- Crypto-Lending and Staking: We need to provide clarity about whether crypto-lending and staking programs are covered by the securities laws and, if so, how. We plan to work to help address how such programs can be structured consistent with the law.
- Crypto Exchange-Traded Products: The Commission already is receiving SRO proposed rule changes to list new types of crypto exchange-traded products. The Task Force will work with the staff to provide clear statements about the approach used when approving or disapproving these applications. The Task Force will also assist the staff and the Commission in considering requests to modify certain features of existing exchange-traded products, including to allow for staking and in-kind creations and redemptions. Before these changes can be operationalized, however, the Commission may have to make progress on custody and other issues.
- Clearing Agencies and Transfer Agents: The Task Force also plans to work on the intersection of crypto and clearing agency and transfer agent rules. We will continue to work with market participants interested in tokenizing securities or otherwise using blockchain technology to modernize traditional financial markets.
- Cross-Border Sandbox: Many crypto projects are international in scope. The Task Force is considering ways to facilitate cross-border experimentation on a limited scale and temporary timeframe, with the possibility of more permanent, long-term approaches.