SEC Acting Chair Calls for Crypto Industry Input on Regulatory Framework

Mark Uyeda, the Acting Chair of the US Securities and Exchange Commission (SEC), has called on participants in the crypto industry to provide input on a proposed regulatory framework. This initiative aims to alleviate the regulatory pressures currently faced by digital asset trading.

During the SEC’s April 11 Crypto Task Force roundtable, Uyeda emphasized the widening gap between existing regulations and the evolving landscape of blockchain innovation. He drew parallels between the early days of US securities trading, which began under a buttonwood tree in New York City, and the current state of crypto markets. Uyeda argued that early brokers established rules tailored to their needs, and similarly, modern regulators must develop frameworks that align with the unique structure of crypto platforms.

Unlike traditional exchanges, crypto trading systems often integrate custody, execution, and clearing into a single platform, made possible by blockchain technology. Uyeda highlighted the benefits of this setup, including improved transparency, efficiency, and trading speed. He also noted advantages such as 24/7 trading through smart contracts and streamlined collateral management via tokenization. “Blockchain technology offers the potential to execute and clear securities transactions in ways that may be more efficient and reliable than current processes,” Uyeda stated.

However, Uyeda acknowledged that the architects of US securities laws did not anticipate blockchain technology or decentralized systems. As a result, compliance challenges have arisen, with many tokenized securities remaining unregistered and ineligible for national exchanges. Existing rules, such as the order protection rule, are also difficult to apply in hybrid trading environments where assets move between on-chain and off-chain systems.

Uyeda criticized the current patchwork of state-by-state licensing requirements, which create barriers for crypto firms aiming to operate nationwide. To address these issues, he proposed a conditional relief framework that could support experimentation while maintaining investor protections. He also suggested a unified federal licensing model under the SEC, which could simplify compliance and enhance market consistency. “Under an accommodating federal regulatory framework, some market participants would likely prefer 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,” Uyeda said.

Uyeda invited industry experts to recommend specific areas where such relief would unlock practical use cases without undermining market integrity. His remarks indicate the SEC’s growing recognition that digital asset regulation must evolve. While long-term reform may take time, the proposed relief framework could create room for innovation without compromising market safeguards.