SEC Urged to Update Regulations for Evolving Crypto Market
The U.S. Securities and Exchange Commission (SEC) is urged to update its regulatory approach to the growing and sophisticated crypto market. Six immediate steps are suggested to enhance regulations while protecting innovation and investors:
- Provide guidance on airdrops to clarify when they do not constitute securities offerings, preventing offshoring of U.S. blockchain technology.
- Revise Regulation Crowdfunding to accommodate crypto startups, raising limits to $75 million and allowing broader investor access while ensuring investor protection.
- Enable broker-dealers to operate in crypto by simplifying registration and compliance processes to improve market participation and liquidity.
- Clarify custody and settlement guidelines for traditional financial institutions to foster confidence and competition in the crypto custody market.
- Reform Exchange-Traded Product (ETP) standards to streamline approval processes, requiring only sufficient liquidity for spot ETPs and mandating robust custody standards.
- Implement a certification process for crypto assets listed on alternative trading systems (ATS), ensuring accurate disclosures and enhancing market integrity.
These recommendations aim to shift the SEC from enforcement to guidance, balancing investor protection with capital formation and innovation.