Rule modifications that would allow companies greater flexibility in issuing tokenized securities are being considered by the U.S. Securities and Exchange Commission (SEC), according to a speech delivered by SEC Commissioner Hester Peirce and published on May 8.
The possibility of exempting companies issuing tokenized securities from specific registration requirements is being examined by the U.S. Securities and Exchange Commission.
An exemptive order is being considered by the regulator for companies utilizing blockchain technology to “issue, trade, and settle securities,” which would relieve them of specific registration obligations, according to Peirce’s remarks in the speech.
As noted by Peirce, decentralized exchanges (DEXs) might be exempted from registering “as a broker-dealer, clearing agency, or an exchange.” In the past, numerous Wells notices have been issued by the SEC to DEXs like Uniswap, accusing them of not registering as securities exchanges.
According to Peirce, companies should not be required to adhere to outdated regulations that were established long before the emergence of the technologies currently under experimentation and may be rendered unnecessary by the very features of those technologies.
According to the commissioner, even under such an exemption, adherence to regulations intended to prevent fraud and market manipulation would still be expected from companies. Additionally, specific disclosure and recordkeeping obligations may also be required to be fulfilled.
Significant Shift in Regulatory Policy
A significant shift in its approach to cryptocurrency oversight has been undertaken by the SEC since U.S. President Donald Trump assumed office in January.
Under the tenure of former SEC Chair Gary Gensler, more than 100 lawsuits were filed by the agency against cryptocurrency companies over alleged breaches of securities laws.
However, since Trump nominee Paul Atkins was sworn in as chair on April 21, a more limited scope of jurisdiction over cryptocurrencies has been asserted by the agency.
In February, guidance was released by the SEC indicating that memecoins—when explicitly recognized as purely speculative assets lacking intrinsic value—are not considered investment contracts under U.S. law.
In April, it was stated by the regulator that stablecoins—digital tokens tied to the U.S. dollar—do not meet the criteria for securities classification, provided they are promoted exclusively as a payment method.
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