The Securities and Exchange Commission (SEC) is taking a proactive approach in regulating the cryptocurrency industry, and their recent Investor Advisory Committee is backing their efforts. The Committee has given a broad show of approval for Chair Gary Gensler’s vision for the crypto industry regarding the application of existing securities laws, with only one major exception. The Committee has asked the SEC to take a step further and provide formal industry guidance.
The Committee, composed of professionals from a variety of backgrounds, have given a consensus opinion that almost all, if not all, existing crypto tokens are indeed securities under current laws. They have gone on to request that the SEC issue a Request for Comments regarding additional guidance areas that are needed with regards to the applications of the federal securities laws to cryptocurrencies.
The Committee has also urged the SEC to oppose any legislative efforts that would carve out the crypto industry from the securities laws and thus undermine investor protection. They urge Gary Gensler and the rest of the SEC to keep up their enforcement activity and regard it as a top priority.
Notably, the Committee’s recommendations align closely with the agency’s own approach so far, which has been to treat crypto firms no differently than other conventional financial businesses. This means that all rules of the securities laws apply to the crypto industry, and the existing practices and regulations should suffice for proper regulation.
Nonetheless, the SEC’s Investor Advisory Committee’s recommendation to provide additional guidance is a welcomed addition to the slew of efforts from the agency. It suggests a proactive, engaged stance towards the crypto industry, and indicates the possibilities of a more formal resolution in the coming times. It allows the crypto firms to be better informed and plan their strategies accordingly. This will be helpful in providing a clear approach to managing and regulating the crypto industry.
Ivanna Patel
- 2023-04-12
SEC's Investor Advisory Committee Calls for Additional Crypto Guidance
The Securities and Exchange Commission's Investor Advisory Committee has recommended the agency to take a proactive approach in the regulation of the crypto industry and provide additional guidance. This consensus opinion has been applauded and can provide a clear approach to managing and regulating the crypto industry.
