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While the crypto sector's eyes are drawn to the policy fireworks in the White House and Congress, the financial agencies have been taking consequential bites out of the Biden Administration's digital assets stance.
One move at a time, the stand-in chiefs of the banking and securities regulators are cutting away policies and significant enforcement work that had previously been used to hem in the digital assets industry. And a U.S. Securities and Exchange Commission roundtable on Friday will further illuminate the delicate legal approach to defining crypto securities, potentially signaling a path forward.
Despite permanent leaders still awaiting Senate confirmation to take over the SEC, Commodity Futures Trading Commission and the banking agencies, each of the agencies has taken active policy steps that have effectively been clearing the decks to start over on crypto. While that's taking place, greater attention has been devoted to President Donald Trump's effort toward a U.S. bitcoin (BTC) reserve (which doesn't yet come with a plan for acquiring new bitcoin) and Congress' longstanding work toward fully realized U.S. crypto laws (which are seeing strong progress but may take a while to complete).
Adam Pollet, a securities lawyer at Eversheds Sutherland who advises on digital assets projects, called this moment a reset.
"They wanted to sort of clean the slate," he said in an interview, interpreting the SEC's outlook this way: "We're sending you the signal that we want you to go forth and try things, and we won't stand in the way."
At the SEC, several actions have dialed the regulator back to an era sometime before the end of President Donald Trump's first term, when his SEC chief at the time, Jay Clayton, led an enforcement charge against Ripple as an illegal exchange. CEO Brad Garlinghouse said on Wednesday that the agency is dropping that accusation — the latest among several high-profile crypto cases abandoned by the regulator. The SEC is no longer arguing that most crypto tokens are unregistered securities.
But the SEC scrapping its previous enforcement stance doesn't necessarily establish a new policy. It's instead more of a policy vacuum in which the regulator has retreated from the field while it awaits legal reinforcements.
SEC backtracks
The same could be said for the agency's withdrawal of its controversial crypto accounting standard known as Staff Accounting Bulletin No. 121, or SAB 121, or the recent decision to toss out a crypto rulemaking proposal that former Chair Gary Gensler pushed that would have cemented certain digital assets platforms as needing to register with the SEC for handling securities transactions.
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