The relationship between Wall Street’s top cop and the U.S. cryptocurrency industry is on the mend following more than four years of friction.
On Tuesday, the Securities and Exchange Commission announced it is spearheading efforts to establish a regulatory framework for digital assets with the creation of a new crypto task force.
The initiative, which will be led by Republican commissioner Hester Peirce, was acting chair Mark Uyeda’s first official action following his appointment to the position by President Trump on Monday. Uyeda, a Republican commissioner, will serve in the role until Paul Atkins, Trump’s permanent pick to lead the agency, is confirmed by the Senate.
FOX Business was first to report in November that the task force was a possibility, with Hester Peirce, referred to affectionately by the industry as “Crypto Mom,” expressing interest in leading such a group.
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As previously reported, the task force will work closely with industry players to create an open dialogue that will allow for a friendlier regulatory environment. In Tuesday’s announcement, the SEC specified it would draw on input from commission staff, investors, legal experts and academics to gain a better understanding of how the $3.5 trillion industry should be sensibly regulated. It will also coordinate with other federal agencies, including the Commodity Futures Trading Commission.
The SEC, under the leadership of Biden’s chair Gary Gensler, who resigned from the agency Monday, brought a deluge of legal actions over the last four years as the commission has attempted to bring the sector into compliance using enforcement.
Industry participants have long complained that the decentralized nature of cryptocurrencies and the blockchain technology they run on disqualifies them from being regulated like traditional securities, i.e. stocks and bonds. They have frequently called on regulators and Congress to develop a new regulatory framework specific to digital assets.Â
Gensler, however, believed traditional securities laws were enough to regulate crypto and that most digital assets aside from bitcoin are securities, suing companies that challenged this view by refusing to register with the commission.
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President Trump, on the other hand, has promised a lighter regulatory touch that will benefit developing industries like artificial intelligence and crypto. Since his election on November 5, he’s appointed a handful of industry advocates to key leadership positions at the Treasury, SEC and CFTC, and named venture capitalist David Sacks the first ever crypto and AI ‘czar’.
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Peirce and the crypto task force are already welcoming input on regulation from the public via email and will hold roundtables with industry participants in the future.
“This undertaking will take time, patience, and much hard work…,” Peirce said in a press release announcing the initiative. “We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation.”