SEC crypto roundtable sparks debate on regulation

The U.S. Securities and Exchange Commission (SEC) hosted its first crypto-focused roundtable, sparking debates on whether digital assets should be classified as securities.

The event followed leadership changes at the SEC after former Chairman Gary Gensler’s resignation, with acting Chairman Mark T. Uyeda and Commissioners Hester Peirce and Caroline Crenshaw delivering opening remarks.

Crenshaw cautioned against adjusting regulations to accommodate specific industries.

“Modifying the law to facilitate the success of a chosen product category is fraught with risk,” she stated.

The panel, moderated by former SEC Commissioner Troy Paredes, featured 11 experts divided on crypto’s regulatory status.

John Reed Stark, a former SEC enforcement official, argued that most crypto assets qualify as securities.

“The people buying crypto are not collectors. They’re investors,” Stark said, adding that legal battles with the SEC consistently found assets to be securities.

Benjamin Schiffrin of Better Markets and Duke Law’s Lee Reiners reinforced this view, citing court rulings applying the Howey Test to crypto transactions beyond Bitcoin (CRYPTO:BTC) and NFTs.

Others urged the SEC to collaborate with agencies like the Commodity Futures Trading Commission (CFTC).

Coy Garrison of Steptoe One LLP praised recent SEC guidance on meme coins and mining, while Collins Belton of Brookwood P.C. warned that overemphasising securities classifications could disrupt tax structures and industry frameworks.

Teresa Goody Guillen of BakerHostetler suggested the Howey Test might be outdated for crypto, arguing that blockchain networks represent a shift in resource allocation akin to an industrial revolution.