"SEC's Crypto Task Force: Charting U.S. Regulation with Industry Giants"

The U.S. Securities and Exchange Commission's (SEC) Crypto Task Force held a meeting on Feb. 21 with prominent industry figures, including MicroStrategy's executive chair Michael Saylor, representatives from the Crypto Council for Innovation (CCI), and MITRE Corporation. The primary objective was to discuss the most effective approach to regulating crypto assets in the United States.

During the meeting, the task force staff reviewed a framework document that outlined a crypto taxonomy and a regulatory structure. The document categorized digital commodities, digital securities, digital currencies, digital tokens, non-fungible tokens (NFTs), and digital assets linked to physical commodities. It also established rights and responsibilities for issuers, exchanges, and asset owners, emphasizing fair disclosure, transparent custody practices, and adherence to local laws.

The framework proposed standardized disclosures, industry-led compliance processes, and limits on asset issuance and maintenance costs. Saylor's presentation highlighted the potential for faster and less costly asset issuance, broader market access, and a shift in capital markets that could strengthen the U.S. dollar and reduce national debt through strategic measures such as a Bitcoin reserve.

Representatives from the CCI recommended clarifying the regulatory treatment of staking services, passive blockchain data platforms, and incentive-based rewards. They proposed that guidance or no-action relief be issued to confirm that bona fide staking services and related infrastructure providers are not subject to securities laws. This change could allow crypto exchange-traded products to include staking activities in their filings.

The CCI also recommended excluding platforms offering blockchain exploration tools and non-custodial Web3 marketplaces from the definitions of brokers, exchanges, or alternative trading systems when these platforms provide only access or data display functions. Additionally, the council urged the SEC to define a non-security status for non-fungible tokens used primarily as artistic works, collectibles, virtual land, or similar non-financial applications.

MITRE Corporation presented research and development activities focusing on the crypto market and its regulatory implications. The firm outlined its work on a logic-based approach to stablecoin regulation, developing workflow tools to support comment processing, and using policy visualization systems to identify regulatory dependencies. MITRE also detailed its digital asset threat-sharing platforms and a cyber threat framework for crypto.

Research findings discussed at the meeting revealed hidden centralization within decentralized finance, stressed the need for bank stress testing in scenarios coupling decentralized finance (DeFi