On May 12, 2025, the Securities and Exchange Commission (“SEC”) held a Crypto Task Force roundtable to explore an appropriate regulatory framework for tokenized securities. In the keynote address, Chair Paul Atkins, stated that a key priority of his tenure will be the development of a rational regulatory framework for crypto asset markets. His focus will be on three broad areas of regulation: issuance, custody and trading.
Issuance
Chair Atkins stated that he intends to establish “clear and sensible guidelines for distributions of crypto assets that are securities or subject to an investment contract.” He notes that market participants have struggled to determine whether a crypto asset constitutes a “security” or whether it is subject to an investment contract. He also reminded participants of recently issued staff statements on disclosure obligations for certain registrations and offerings and the SEC’s view that certain distributions and crypto assets do not implicate federal securities laws, but noted that the staff will continue to consider whether further guidance, registration exemptions and safe harbors are needed to facilitate issuances.
Custody
Chair Atkins stated that he supports providing registrants greater optionality with regard to crypto asset custody. He believes that clarity on what types of custodians fall under the “qualified custodian” rules of the Advisors Act and Investment Company Act are necessary, and supports exceptions from qualified custody requirements so common practices within crypto asset markets are not in tension with these rules and so that advisers and funds may utilize self-custodial solutions that incorporate more advanced security technology. Additionally, he stated that it may be necessary to repeal and replace the existing “special broker-dealer” framework. He concluded his comments by noting that “[b]roker-dealers are not and never were restricted from acting as a custodian for non-security crypto assets or crypto asset securities, but Commission action may be needed to clarify the application of the customer protection and net capital rules to this activity.”
Trading
Chair Atkins stated that he supports broker-dealers developing platforms which allow trading in securities and non-securities on one platform and the trading of securities for non-securities. The SEC is currently considering ways to modernize the ATS regulatory regime to better accommodate crypto assets, and he has asked staff to explore guidance or rulemaking which may enable the listing and trading of crypto assets on national securities exchanges.
Remarks from Commissioners Crenshaw and Uyeda
Commissioner Crenshaw’s remarks focused on the need to envision and determine the system the United States would like to build. She gave examples of some key system and definitional differences that will need to be determined, including whether tokenization means issuing a security directly on the blockchain or creating a digital representation of a security on the blockchain, whether tokenization would encompass downstream distribution, trading, clearing and settlement and whether the entire securities lifecycle would move “on-chain,” or only a part of it. Commissioner Crenshaw went on to note areas of tension with regulating these systems and key benefits and possible risks with adopting certain systems and capabilities over others. She concluded that the scope of regulatory changes given the size of the crypto market compared to the traditional finance market should be weighed.
Commissioner Mark Uyeda focused his comments on the benefits provided, including greater transparency, enhanced liquidity of relatively illiquid assets, reduced delays and decreased transactional costs. He noted that there may be increased costs associated with compliance and would like the SEC to focus on changes that ensure these benefits are realized for market participants.
Remarks from this roundtable can be found here: Paul S. Atkins, Chairman Commentary; Commissioner Caroline A. Crenshaw Commentary; Commissioner Mark T. Uyeda Commentary.
The SEC Crypto Task Force is scheduled to hold one more roundtable in June to discuss decentralized finance. Information about those events and online broadcasting can be found here: Crypto Task Force Roundtable – DeFi and the American Spirit.
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