SEC Crypto Task Force met with Saylor CCI and MITRE in order to discuss regulations
On February 21, the SEC Crypto Task Force held a meeting with Strategy executive chairman Michael Saylor and representatives of the Crypto Council for Innovation, MITRE Corporation, to discuss how to best regulate crypto assets in the US.
According to memos from the SEC shared at the meeting, the taskforce staff reviewed a document that defined a cryptotaxonomy and regulatory structure.
The document categorizes digital commodities, such as Bitcoin (BTC), and digital assets, including digital currencies backed with fiat currency, digital tokens of defined utility, tokens that are not fungible for digital applications unique to them, and digital ABTs linked to physical commodities.
The framework establishes rights, responsibilities, and obligations for asset owners, exchanges and issuers by calling for transparent custody practices and fair disclosure. It also calls for adherence to local law. The framework proposes standard disclosures, compliance processes led by the industry, and limits on asset issuance and upkeep costs.
Saylor also highlighted that a Bitcoin reserve could be used to reduce national debt and strengthen the US dollar.
Revisiting the staking
Crypto Council for Innovation Representatives (CCI), have recommended that the regulatory treatment for staking services and reward-based incentives, as well as passive blockchain data platform, be clarified.
Twenty representatives of different crypto players were present at the meeting, including Coinbase, Filecoin Foundation, a16z and a16z.
They proposed guidance or no action relief to confirm bona fide services of staking and providers of related infrastructure are not covered by securities laws. This could allow crypto exchange products to include staking in their filings.
The CCI has also recommended that platforms which offer blockchain exploration tools, non-custodial Web3 platforms, and alternative trading systems be excluded when they only provide data display or access functions.
Further, the recommendations asked for guidance on how to define tokens with non-fungible properties that are primarily used as artworks, collectibles and virtual land or other non-financial purposes.
Additional proposals include issuing no action letters, pausing only compliance-based enforcement actions, as well as modifying rulemaking process to account for the decentralization of trading and on-chain. These measures are designed to strike a balance between investor protection and industry innovation.
The Council urged the SEC, based on previous decisions and industry momentum, to improve regulatory clarity and investor protection for US investors.
Stablecoins: Research-driven insights
MITRE Corporation has presented its research and development activities focused on the crypto-market and its regulatory implications.
As the US Treasury’s federally funded Research and Development Center, the firm described its work in developing workflow tools for comment processing, using policy visualization to identify regulatory dependencies, and working on a logic based approach to stabilitycoin regulations.
MITRE has also revealed its platforms for sharing digital asset threats and a cyber-threat framework for crypto.
Researchers discussed the findings of their research at the meeting. They revealed that decentralized financing is a form of hidden centralization. They also emphasized the need for stress testing by banks in scenarios combining decentralized and traditional finance.
MITRE’s technical work is designed as a support to SEC rulemaking. It provides data-driven insights, innovative tools and a framework to address the evolving challenges of the digital assets ecosystem.
The meeting ends with a review of all proposals and research that aims to establish a regulatory structure that encourages innovation while maintaining the integrity of the market.
