The task force’s mandate extends beyond domestic theatrics, encompassing international collaboration with fellow regulators who presumably share America’s bewilderment about how to properly categorize digital assets that exist simultaneously everywhere and nowhere.
Rather than continuing its retroactive enforcement strategy—a approach roughly equivalent to changing traffic laws after issuing speeding tickets—the SEC now pledges “judicious enforcement” focused on clarity.
The SEC abandons its habit of writing rulebooks in disappearing ink while simultaneously wielding enforcement hammers.
April 2025 brought forth a detailed disclosure framework for crypto securities, demanding everything from smart contract audits to token supply information.
This thorough guidance covers business models, technical specifications, and risk factors (because apparently someone needed to formally acknowledge that cryptocurrency markets exhibit “volatility”).
The framework incorporates traditional Regulation S-K financial reporting obligations, effectively forcing crypto issuers into conventional disclosure straitjackets.
Meanwhile, broker-dealers received their own regulatory lifeline through May 2025 FAQs that simplified custody rules and addressed distributed ledger technology applications.
These guidelines ease restrictions from the infamous 2019 Joint Statement, finally permitting non-special purpose broker-dealers to engage in crypto asset custody without requiring congressional approval and three letters of recommendation. The new framework enables broker-dealers to facilitate in-kind creations and redemptions for spot crypto exchange-traded products, marking a significant departure from the previously mandated cash-only structures.
The task force actively solicits stakeholder input, suggesting the SEC has discovered that regulatory frameworks work better when informed by industry participants rather than academic theories about digital asset behavior.
This stakeholder engagement approach represents a marked departure from the agency’s previous methodology of regulation through enforcement surprise attacks. However, critics argue the guidance suffers from regulatory ambiguity by failing to clearly specify which entities must comply with these extensive disclosure requirements.
Whether this newfangled collaborative approach will successfully navigate the inherent tension between innovation and investor protection remains an open question.
The crypto industry, having survived years of regulatory whiplash, now faces the novel challenge of operating within an actual framework rather than improvising around enforcement tea leaves. The shift toward regulatory clarity aligns with broader industry predictions of a more favorable environment for cryptocurrency growth and institutional adoption in 2025.
