SEC crypto task force holds inaugural public meeting

Investing.com -- The U.S. Securities and Exchange Commission’s (SEC) crypto task force led its first public meeting on Friday. The focus was on the application of securities laws to digital assets as the Trump administration seeks to revamp cryptocurrency regulations.

The roundtable included John Reed Stark, former chief of the SEC’s Office of Internet Enforcement, Miles Jennings, general counsel for Andreessen Horowitz’s crypto arm, a16z, and former SEC Commissioner Troy Paredes. Hester Peirce, Republican SEC Commissioner, is leading the task force, which is responsible for formulating rules and guidance for the crypto sector.

Peirce stated that the commission’s approach to crypto regulation is undergoing a restart, symbolizing a new beginning. The crypto industry has repeatedly disagreed with regulators over the interpretation of federal securities laws to digital assets, with many asserting that crypto tokens are more similar to commodities. If tokens are classified as securities, firms would need to register with the SEC and disclose certain information to investors.

President Donald Trump, who has promised to be a "crypto president," has committed to undoing an industry clampdown under President Joe Biden’s SEC. The SEC under Biden sued several crypto companies, including Coinbase (NASDAQ:COIN) and Kraken, alleging they had violated its rules. The SEC’s new leadership has agreed to withdraw or suspend many of these cases.

The task force discussed on Friday whether crypto tokens necessitate a new, distinct regulatory framework, separate from how the SEC supervises securities such as equities.

Jennings advocated for a "technology-neutral" approach by the SEC, comparing the differences between a system like ethereum and owning equity in Apple (NASDAQ:AAPL).

However, some concerns were raised, including by Democratic SEC Commissioner Caroline Crenshaw, about the regulator possibly easing regulations for cryptocurrencies by allowing them to function under a unique regime. Crenshaw warned of the risks of altering the law to favor a specific product category, not only weakening regulatory protections for that category but also potentially causing a negative domino effect on other market areas protected by the same laws.

This initial roundtable of the task force coincides with Trump’s broader efforts to overhaul cryptocurrency policies. Earlier this month, Trump enacted an executive order to establish a strategic reserve of cryptocurrencies and organized a summit for industry leaders at the White House.

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