Regulators Open Door to Crypto's Mainstream Breakthrough

The U.S. Securities and Exchange Commission (SEC) has unveiled a regulatory agenda that includes proposed rules to reshape the oversight of cryptocurrencies, offering potential safe harbors and easing burdens on broker-dealers. SEC Chair Paul Atkins announced the agenda as part of the spring 2025 regulatory plan, which outlines 20 rule proposals aimed at providing clarity for digital assets and fostering innovation. Among the key proposals are exemptions and safe harbors for the offer and sale of crypto assets, along with modifications to the Exchange Act to facilitate trading on alternative trading systems and national securities exchanges. These changes are expected to allow crypto companies to operate with reduced regulatory oversight and lower the risk of legal action, particularly in areas involving custody, reporting, and Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements. The agenda also reflects a broader shift in the SEC’s approach, with Chair Atkins emphasizing the need for smart, effective, and appropriately tailored regulations that align with the agency’s statutory authority.

In addition to revising broker-dealer rules, the SEC is proposing modernizations to the Investment Advisers Act of 1940 to better accommodate digital assets. This includes addressing custody issues related to crypto assets, a move that comes less than eight months after a previous attempt to impose stricter guidelines was abandoned. The proposed changes aim to reduce the regulatory burden on crypto companies by streamlining compliance obligations. The agenda also includes initiatives to reduce the compliance burden for public companies in connection with shareholder proposals, as part of a broader effort to support capital formation and market efficiency. These developments are a significant departure from the enforcement-heavy approach adopted by the previous administration, which led to prolonged investigations and lawsuits against major crypto exchanges. Since the resignation of former SEC Chair Gary Gensler, the agency has signaled a more flexible stance, including the withdrawal of numerous enforcement actions and the initiation of a rulemaking process that prioritizes public input and stakeholder engagement.

The SEC has also joined forces with the Commodity Futures Trading Commission (CFTC) in a joint initiative to facilitate the trading of certain spot crypto asset products on registered exchanges. This collaboration, part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, aims to align regulatory frameworks and promote trading venue choice for market participants. In a joint statement, the SEC and CFTC clarified that registered exchanges—both SEC-registered national securities exchanges and CFTC-registered designated contract markets—are not prohibited from facilitating the trading of spot crypto asset products under current law. The joint effort is intended to foster innovation and competition in the crypto market while maintaining investor protections. SEC Chair Paul Atkins highlighted the significance of the statement, noting that it marks a step forward in supporting a regulatory environment that encourages digital asset innovation. The CFTC’s Acting Chair, Caroline D. Pham, echoed this sentiment, emphasizing the need for a unified approach to regulatory clarity and the importance of collaboration in making the U.S. the global leader in crypto innovation.

The joint statement does not introduce new rules or legal safe harbors but provides a clear view from agency staff that the existing legal framework does not prohibit the trading of spot crypto assets on regulated exchanges. The SEC and CFTC have pledged to support market participants by promptly reviewing proposals and engaging with firms seeking to list crypto products. This includes addressing questions related to margin and clearing arrangements, market surveillance, and public data dissemination. The agencies also emphasized the importance of maintaining market integrity and investor protections, ensuring that any new trading venues adhere to the same rigorous standards as traditional financial markets. This regulatory coordination is expected to encourage U.S. exchanges, including the New York Stock Exchange and Nasdaq, to explore the listing of major cryptocurrencies such as Bitcoin and Ethereum. Market participants are invited to engage with both agencies during this transition period, with the SEC and CFTC providing dedicated contact points for ongoing dialogue. This initiative aligns with broader efforts by the Trump administration to position the U.S. as the "crypto capital" of the world, including the recent enactment of legislation to regulate stablecoins and ongoing legislative work on a crypto market structure bill.

The regulatory developments have been widely welcomed by industry stakeholders, with some market participants suggesting that they could facilitate broader adoption of crypto assets by integrating them into traditional financial infrastructure. For example, the OTC Meme Protocol has proposed a "Howey Shield" framework to classify its tokens as commodities rather than securities, leveraging existing legal frameworks to enhance regulatory compliance. Similarly, Ava Labs has suggested a new regulatory category for "Protocol Tokens" that would distinguish them from traditional securities, while Paradigm has called for interpretive guidance on tokenized securities to ensure compliance with existing laws. The industry’s shift toward structured regulatory engagement reflects a broader recognition that clarity and alignment with established financial frameworks are essential for long-term growth. As the SEC and CFTC continue to refine their approaches, the focus remains on balancing innovation with investor protection, with key challenges including the classification of tokens, the enforcement of KYC and AML requirements, and the integration of blockchain-based systems into traditional regulatory structures. The upcoming months are expected to bring further guidance and potential rulemaking, with the agencies signaling their commitment to supporting a dynamic and secure digital asset ecosystem.

Source:

[1] SEC's Agenda Proposes Crypto Safe Harbors, Broker ... (https://cointelegraph.com/news/sec-revamp-crypto-rules-proposed-agenda)

[2] US SEC unveils agenda to revamp crypto policies, ease Wall ... (https://finance.yahoo.com/news/us-sec-unveils-agenda-revamp-133008488.html)

[3] SEC and CFTC's new joint guidance 'opens the door for ... (https://www.theblock.co/post/369192/sec-cftc-new-joint-guidance)

[4] SEC-CFTC Joint Staff Statement (Project Crypto- ... (https://www.sec.gov/newsroom/speeches-statements/sec-cftc-project-crypto-090225)

[5] SEC and CFTC Staff Issue Joint Statement on Trading ... (https://www.sec.gov/newsroom/press-releases/2025-110-sec-cftc-staff-issue-joint-statement-trading-certain-spot-crypto-asset-products)

[6] SEC and CFTC staff clear path for spot crypto trading on ... (https://www.aoshearman.com/en/insights/ao-shearman-on-fintech-and-digital-assets/sec-and-cftc-staff-clear-path-for-spot-crypto-trading-on-regulated-exchanges)