SEC Chairman Floats Temporary Regulatory Relief For Crypto Exchanges

Crypto exchanges may soon get a regulatory sandbox to play in. At a roundtable Friday on tailoring securities regulation to accommodate crypto trading, acting SEC chair Mark Uyeda said the commission is open to supporting trading of tokenize assets via blockchain and suggested temporary regulatory relief may be coming.

“While the Commission works to develop a long-term solution to address these issues, a time-limited, conditional exemptive relief framework for registrants and non-registrants could allow for greater innovation with blockchain technology within the United States in the near term,” Uyeda said in prepared remarks “I encourage market participants that are developing new ways to trade securities using blockchain technology to provide input on where exemptive relief may be appropriate.

Commissioner Hester Peirce, who heads the comm ission’s recently formed Crypto Task Force, endorsed the idea in live comments later in the half-day event at SEC headquarters.

“Participating firms could see what works and what doesn’t, technically and commercially,” she said. “Such trials could inform the Commission’s rulemaking efforts.”

Peirce had proposed a similar step in 2024 but then-chair Gary Gensler, a crypto skeptic, was cool to the idea and the proposal went nowhere.

Related: DOJ Dismantles Crypto Enforcement Unit, Refocuses on Criminal Use of Digital Assets

The Trump administration has so far been a supporter of crypto. Last month, the president issued an Executive Order to establish a strategic Bitcoin reserve and establish a sovereign “digital asset stockpile” that would hold an assortment of other digital assets.

“State regulation of crypto asset trading raises the potential for there to be a patchwork of state licensing regimes,” Uyeda warned. “We should consider whether there may be a more efficient method of regulation,” such as by allowing market participants to offer “trading in both tokenized securities and non-security crypto assets under a single SEC license rather than offer trading solely in non-security crypto assets under fifty different state licenses.”

While stopping short of explicitly endorsing Uyeda’s proposed regulatory sandbox, Republican commissioner Caroline Crenshaw she said retail crypto investments may need greater protection through federal oversight.

“What protections do [retail investors] naturally assume they have based on crypto companies’ marketing and their experience with more traditional investments?” she asked. “Do they actually have the benefit of those protections in practice? In my view, they should.”

The Crypto Task Force will hold its next public roundtable, on issues of crypto custody, on April 25^th. That will be followed on May 12^th with a roundtable on tokenization of assets.

Source: SEC Gov