SEC Engages Trade Group in Push for Long-Awaited Crypto Regulation Clarity

Wall Street's watchdog finally leans into the crypto conversation—just as the market hits another volatility spike.

Regulators Break Silence on Digital Assets

The SEC’s closed-door talks with industry players signal a potential shift from hostility to hesitant collaboration. No promises, but insiders note 'unprecedented urgency' in discussions.

The Compliance Tightrope

New rules could legitimize DeFi or strangle innovation—depending on whether bureaucrats grasp blockchain’s fundamental irony: it exists to bypass their oversight. Meanwhile, crypto VCs quietly lobby for loopholes (some things never change).

What’s Next?

Expect draft proposals by Q4 2025, likely with enough carve-outs to keep both crypto-anarchists and institutional investors grumbling equally. The perfect compromise? A 300-page document nobody fully understands—classic regulatory performance art.

SIFMA recommends a holistic approach in legislation on digital assets

SIFMA recommended that the SEC separate certain functions for digital commodities and tokenized securities. For instance, exchange, broker-dealer, trading, and custody are kept separate while fostering competition and cooperation among service providers.

At the same time, it said that restrictions should be placed on direct involvement in trading digital securities and commodities.

The industry trade group noted that an open, transparent new framework for issuing and trading digital securities must be created with a cautious approach to constructing the “foundational” definition of securities and digital commodities.

SIFMA also recommended that legislation on digital assets adopt a holistic approach, including technology-focused improvements to legal documents and cross-border applicability.

Based on SIFMA’s argument, rulemaking must consider transitional and hybrid arrangements. It then pointed out that there was increasing interest among traditional finance companies in incorporating digital assets into their offerings.

It is worth noting that the industry trade group represents hundreds of firms that offer financial services. This includes broker-dealers, investment banks, and asset management companies. According to SIFMA’s website, broker-dealer members account for approximately 80% of financial advisors managing $13 trillion in client assets and 90% of market share in the US in terms of revenue.

SIFMA urges the SEC to deny the firm’s “no action or exemptions” request

This week’s trade association asked the SEC not to permit digital asset firms to offer tokens with equity features via tailored exemptive relief, but to take a more transparent step.

It showed worry that companies dealing with digital assets are investigating offering tokenized stocks without any action or special permission, which means they want to be free from SEC enforcement actions. It urged the regulatory watchdog to deny these requests. 

The aim of SIFMA in asking the commission to deny the companies’ requests for no action or exemptions is that the company’s team wants a strong public process that lets people give their opinions before any decisions are made about new trading and issuance models. 

Therefore, with the open, transparent regulations, crypto markets will be safe and investors will be protected, which is a significant milestone in crypto.

Atkins promises clarity for crypto

The newly appointed chairman of the SEC, Paul Atkins, recently criticized the agency for stifling innovation in the cryptocurrency sector through years of “regulatory uncertainty.”

“Market participants engaging in this technology deserve clear regulatory rules of the road,” Atkins said. Speaking at the SEC’s crypto roundtable—an initiative launched by the Republican-led commission to reassess how securities laws apply to digital assets—Atkins signaled a shift in tone.

The event aimed to explore the agency’s evolving stance on crypto, an area that has been fraught with friction between regulators and the industry under previous leadership.

Atkins, who has previously advised several crypto firms, is widely expected to adopt a more industry-friendly approach. His predecessor, Gary Gensler, had taken an aggressive enforcement stance, accusing the sector of widespread noncompliance with US securities laws.

Even before Atkins took office, the SEC had begun softening its posture. In recent months, the agency has moved to develop clearer regulations for the crypto sector and has slowed—or entirely dropped—certain enforcement actions.

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