Opportunities Await: Engaging with the SEC’s Crypto Task Force

On February 4, 2025, Commissioner Hester Peirce offered a first glimpse at the Securities and Exchange Commission’s (“SEC”) roadmap for establishing a regulatory framework for crypto.¹ Tasked with leading the SEC’s newly-created Crypto Task Force (“Task Force”), Commissioner Peirce detailed ten, non-exhaustive crypto-focused items that the Task Force is keen to address.² Commissioner Peirce also provided six disclaimers aimed at both setting expectations for the industry on the timing of action from the Task Force³ as well as making clear that while the Task Force has the goal of creating regulatory clarity for crypto, there will be “no tolerance for liars, cheaters, and scammers.” Commissioner Peirce also noted that the “Task Force is working to help create a regulatory framework that both achieves the Commission’s important regulatory objectives – including protecting investors – and preserves the industry’s ability to offer products and services.”⁴

Based on the SEC’s crypto roadmap, here are five areas in which firms may want to engage with the SEC.

1. Special-Purpose Broker Dealer: The Commission’s 2021 no-action statement for special-purpose broker dealers (“SPBD”) permitted broker-dealers to custody only “digital asset securities.” Although published in 2021, only two firms successfully registered as SPBDs. Commissioner Peirce noted that the Task Force is exploring updates to the framework since “in its current form [it] has not been a success.” She noted one initial change could be permitting a broker-dealer to custody both crypto assets that are securities and non-securities (e.g., Bitcoin), which currently is not permitted under the relief.⁵ Broker-dealers interested in custodying crypto assets that are securities now have an opportunity to engage with SEC staff to discuss how to address those aspects of the no-action statement that have made registration impractical.
2. Coin and Token Offering Relief: The Task Force is considering recommending “temporary prospective and retroactive relief for coin or token offerings” conditioned on an entity providing and updating certain information to the public.⁶ This relief would “bridge the gap” until a more permanent rule is adopted or legislation is passed, and create certainty that certain tokens are non-securities so the assets could trade freely in the secondary market, as long as certain conditions are met. Market participants interested in this relief should consider engaging with the SEC staff to ensure that the conditions of the relief are well-tailored for the crypto market, and that the relief is equally workable for new token launches as well as existing tokens that have been trading for some time.
3. Clearing Agencies & Transfer Agents: Tokenization of real-world assets and the modernization of financial markets through blockchain technology could involve traditional notions of clearing agency or transfer agent activities, both of which require registration.⁷ Since the Task Force has signaled a willingness to assess the “intersection of crypto and clearing agency and transfer agent rules”, firms interested in tokenizing securities or otherwise using blockchain technology to transact in securities have an opportunity to work with the staff to shape regulation in this area.
4. Requesting Exemptive or No-Action Relief: As a result of the SEC’s shift in tone toward crypto, Commissioner Peirce anticipates the number of “applications for exemptive relief, requests for no-action letters, and registration statements” to materially increase. She cautioned, however, that while firms are justifiability eager for regulatory clarity, speed does not equal success. Commissioner Peirce noted that when engaging with SEC staff, a request for exemptive or no-action relief that is thoughtful, legally well-reasoned and addresses all technical and legal considerations often will be reviewed more expeditiously than a request that results in questions from SEC staff that require additional analysis and submissions. Firms seeking relief should heed this advice and seek counsel as necessary to ensure their requests for relief meet these standards.
5. Public Engagement: If a firm is interested in engaging with the Task Force on any issues related to the regulation of crypto assets, they can do so through a written submission or by meeting with the staff (in-person or virtual). In either instance, in the interest of increasing transparency and promoting public dialogue, the input a firm submits to the Task Force will be made publicly available⁸ While there are methods to request confidential treatment, firms should approach engagements with the Task Force with the expectation that the substance of the engagement will be made public.

Ultimately, as noted by Commissioner Peirce, a successful regulatory framework for crypto will be the result of input the Task Force receives from a wide range of industry participants and interested parties.⁹ The SEC is at a critical juncture when it comes to crypto regulations. It is important for firms to take this opportunity to engage with the Task Force to ensure industry perspective is considered.

Footnotes

1. Comm’r Hester M. Peirce, The Journey Begins (Feb. 4, 2025), https://www.sec.gov/newsroom/speeches-statements/peirce-journey-begins-020425.

2. Id. ( (1) Clarifying the status of crypto assets under securities laws; (2) identifying crypto activity that falls outside of SEC jurisdiction; (3) considering potential temporary or retroactive relief for coin or token offerings; (4) potentially modifying existing paths to registration; (5) updating the special-purpose broker dealer no-action statement; (6) providing a regulatory framework for investment advisers to custody client assets; (7) providing clarity for crypto-lending and staking programs; (8) offering clear statements for approving or disapproving crypto exchange-traded products; (9) focusing on clearing agent and transfer agent rules and the intersection with crypto and blockchain innovation; and (10) considering avenues for cross-border experimentation.); See also Press Release, SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.

3. Commissioner Peirce stated that the industry should be patient as the Crypto Task Force determines how to proceed to with the cases currently in litigation and the proposed rules related to certain aspects of crypto.

4. Id. (“The statutes already on the books do not allow a free-for-all for products that fall within our jurisdiction. Congress has put parameters in place, and the Commission will apply them.”).

5. Custody of Digital Asset Securities by Special Purpose Broker-Dealers, Securities and Exchange Commission (Feb. 26, 2021), https://www.federalregister.gov/documents/2021/02/26/2020-28847/custody-of-digital-asset-securities-by-special-purpose-broker-dealers.

6. See supra note 1.

7. See Section 17A(b) of the Securities Exchange Act of 1934 (“Exchange Act”) (Registration of clearing agencies); See also Section 17A(c) of the Exchange Act (Registration of Transfer Agents).

8. Comm’r Hester M. Peirce, The Journey Begins (Feb. 4, 2025) (noting that documents submitted to the Crypto Task Force will “generally be posted on www.sec.gov” without change or redaction of personal identifying information and meeting requests must include a brief summary of the issues for discussion, and these summaries would be posted to the SEC’s website.).

9. See Press Release, SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.