SEC's Crypto Task Force Clearest Sign Yet of Pivot From Gensler Era — Barrons.com

By Kenneth CorbinEven without a permanent chairman confirmed to lead it, the Securities and Exchange Commission is wasting no time in signaling a departure from the work of the previous administration.This week, on the first full day of the new administration, the SEC under acting Chairman Mark Uyeda announced the formation of an agencywide task force to study cryptocurrencies and chart a "sensible regulatory path that respects the bounds of the law."The announcement of the new task force signals an abrupt — and expected — departure from the SEC's approach to crypto during the Biden administration, when Chairman Gary Gensler argued that nearly all crypto offerings should be treated as securities, requiring them to register with, and be regulated by, the SEC."To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way," the SEC said in announcing the new task force, noting that clarity about who needs to register and how has "been elusive.""The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud," the commission said. "The SEC can do better."Gensler's SEC brought dozens of enforcement actions against unregistered crypto offerings, arousing the ire of an industry that has been asking for a new regulatory framework tailored to digital currencies."The crypto industry has long sought greater clarity to ensure compliance," says Cynthia Kelly, senior compliance consultant at STP Investment Services. "However, this clarity may also invite increased regulatory scrutiny, presenting a double-edged sword."Still, Kelly considers the move an "overall positive step forward for the crypto space."Uyeda tapped Commissioner Hester Peirce to lead the task force. Peirce clashed frequently with Gensler over his approach to regulation, both in the crypto space and other sectors the SEC oversees.Peirce says she intends to solicit input from a broad range of stakeholders and work "hand-in-hand with the public" to develop a proper regulatory framework."This undertaking will take time, patience, and much hard work," she says. "It will succeed only if the task force has input from a wide range of investors, industry participants, academics, and other interested parties."The work of the task force, which expects to hold several roundtable events, is likely to stretch into the tenure of the incoming chairman-designate, former Commissioner Paul Atkins, who is awaiting Senate confirmation.Trump's selection of Atkins was widely interpreted as steering the commission in a more crypto-friendly direction. Atkins had worked with the Chamber of Digital Commerce, a crypto lobbying group that has fought against the SEC's aggressive enforcement of the industry.In other market segments the SEC oversees, Atkins is also expected to take a less activist role than his predecessor, and is seen as more likely to focus on rooting out fraudulent activity than pursuing enforcement actions for technical violations such as the SEC's campaign against regulated entities conducting business on unapproved messaging channels that aren't recorded with the rest of their communications.Write to [email protected] content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.