- SEC will review the 2019 framework, including Hinman’s Ether speech.
- Covered stablecoins like USDT and USDC are not securities.
- SEC aims to streamline regulations with the “10-for-1” policy.
U.S. SEC Acting Chair Mark Uyeda has directed the agency to reconsider its crypto-related regulations. This action follows Executive Order 14192, titled “Unleashing Prosperity Through Deregulation,” issued by President Trump. The order calls for a major review of federal regulations, including those that govern cryptocurrencies.
Focus on the 2019 Framework and Hinman’s 2018 Ether Speech
The review devotes its main focus to the 2019 Framework for Investment Contract Analysis of Digital Assets. Hinman’s 2018 speech formed the basis for this framework which aimed to address potential security status configuration of particular tokens. The comments by Hinman specified that decentralized tokens might lack the characteristics needed to be classified as securities.
The SEC staff plans to evaluate the 2019 Framework for Investment Contract Analysis of Digital Assets to verify its correspondence with current SEC objectives. In addition to the 2019 framework, the review also targets various crypto-related staff letters. These letters include guidance on crypto asset disclosures, custody standards, and Bitcoin futures.
Notably, the SEC will examine a no-action letter involving custodians based in Wyoming. Furthermore, staff will review a sample letter addressing crypto market volatility, as well as advisory documents from 2022 and 2021 about disclosure practices and investment risks.
Stablecoins and the SEC’s New Stance
On April 4, the SEC clarified its stance on stablecoins. It confirmed that “covered” stablecoins, such as USDT and USDC, are not classified as securities. These stablecoins are backed by fiat or liquid reserves and can be redeemed 1:1 with USD. The SEC’s new guidance excludes algorithmic stablecoins from this non-security classification.
Additionally, covered stablecoin issuers must avoid mixing reserves with operational funds or offering yield. The SEC conducts this review as part of their efforts to carry out the “10-for-1” rule-cutting policy ordered in Executive Order 14192. The directive requires all federal agencies to delete ten established regulations whenever they create a new one.
The designed process aims at streamlining regulatory frameworks through reduction of excessive bureaucratic barriers. The analysis aims to explain how the SEC handles cryptocurrency regulation after a continuous discussion about its approach. Further evaluation by the SEC will determine the future course of the cryptocurrency market.
