Policymakers, regulators, and industry participants convened in Washington D.C., on April 11 as the U.S. Securities and Exchange Commission’s Crypto Task Force hosted its second roundtable titled “Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading.” The crypto task force is led by Commissioner Hester Peirce.
Acting SEC Chairman Mark T. Uyeda opened the discussion, highlighting distinct but overlapping challenges associated with overseeing the evolving crypto trading landscape. Uyeda pointed to historic parallels, noting that early U.S. securities markets emerged organically, much like today’s crypto markets. He underscored the inefficiencies of the current state-by-state licensing framework for crypto platforms and suggested a more cohesive federal approach might better accommodate technological innovation and investor protection.
Uyeda explained that the current federal securities laws present structural issues for integrating tokenized securities into mainstream trading, noting limitations such as restrictions on listing unregistered securities and complications with complying with market rules. He advocated for limited regulatory flexibility to allow innovation to continue, stating:
I encourage market participants that are developing new ways to trade securities using blockchain technology to provide input on where exemptive relief may be appropriate.
The acting SEC chair added that blockchain has the potential to transform securities clearing and execution by streamlining operations, enhancing liquidity, and enabling continuous trading.
Commissioner Caroline A. Crenshaw commented on the risks that crypto trading platforms pose to retail investors, particularly around the lack of clear custody and registration practices. She emphasized:
Crypto trading platforms are unique because, among other reasons, they often perform multiple services under one roof, sometimes including brokerage, clearing, and custody.
Crenshaw noted that these bundled services contrast sharply with traditional finance structures, where functions are separated to minimize conflicts of interest. She raised concerns about investors misunderstanding the safeguards in place, referencing recent failures that revealed gaps in investor protections and regulatory coverage. Crenshaw challenged attendees to consider critical questions surrounding registration, execution standards, and custody risks as part of shaping a responsible regulatory framework.
Source:news.bitcoin.com
