SEC, CFTC Overhaul US Crypto Regulations by Removing Enforcement: All Details
Led by Commissioner Hester Pierce, the SEC’s new crypto task force aims to clarify the classification of crypto assets and not put everything within the “securities” bracket.
The SEC's new crypto task force aims to clarify the classification of crypto assets, streamline the registration process for crypto firms, and establish clearer guidelines.
SEC Commissioner Hester Pierce advocates for collaborative efforts with federal, state, and international regulators.
The US CFTC has also restructured its enforcement division into two focused task forces.
The US Securities and Exchange Commission (SEC), as well as the Commodity Futures Trading Commission (CFTC), have initiated key measures to overhaul crypto regulations in the United States. The most important decision was to part ways with the regulation-by-enforcement approach and instead undertake a broader outlook.
SEC’s Crypto Task Force under Hester Pierce in Action
SEC commissioner Hester Pierce, who’s leading the newly formed crypto task force, provided further clarity on crypto regulation actions moving ahead while providing a long list of priorities. The task force seeks to distinguish which “crypto assets” are securities changing the way how crypto firms register. Besides, it will also work on providing clear statements when approving and disapproving crypto ETFs.
Crypto mom Hester Pierce stated that one of the priorities would be classifying some tokens as “non-securities”. She added:
“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”.
Hester Peirce also emphasized the need for a collaborative approach in shaping cryptocurrency regulations. She said that the SEC crypto task force “will collaborate with others across the federal government, with state securities regulators” along with the international counterparts.
“We invite builders, enthusiasts, and skeptics to engage with us to figure out what the final rules should be and what interim steps might help to foster innovation in the meantime,” noted Pierce.
CFTC Also Says Bye to Regulation by Enforcement
The US Commodity Futures Trading Commission (CFTC) announced a significant reorganization of its enforcement division. Acting Chair Caroline Pham stated that the agency will focus on fraud prevention and reducing “regulation by enforcement”.
Under the leadership of former Chairman Rostin Behnam, the Division of Enforcement managed multiple task forces targeting insider trading, cybersecurity, emerging technologies, and environmental fraud. However, as part of the recent restructuring, CFTC will reduce the total task force to two key groups.
The newly established Complex Fraud Task Force will oversee the enforcement of cases involving complex fraud and manipulation across all asset classes. Paul Hayeck, deputy director of the enforcement division, will serve as the task force’s acting chief.
The second group is the Retail Fraud and General Enforcement Task Force, which will focus on general enforcement issues and retail fraud. Charles Marvine, the deputy director of the enforcement division, will lead this task force.
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