The Digital Chamber’s Token Alliance has issued a call to the United States Securities and Exchange Commission (SEC) to initiate an immediate review of all existing crypto-related investigations, Wells notices, and ongoing lawsuits from ‘day one’ of the forthcoming Trump administration. This proposal comes as a response to the changing landscape in Washington D.C., with Paul Atkins, Trump’s nominee for SEC chair, set to take over from outgoing Chair Gary Gensler.
A Chance to Reset Relations
The Digital Chamber’s Token Alliance lists Atkins as an advisory board member and believes that his nomination presents an opportunity for the SEC to reset its ‘historically troubled relationship’ with the digital asset industry. In a statement released on December 18, the group emphasized the need for mutual trust between the SEC and the crypto industry.
"We need to foster a culture of mutual trust — where the digital asset industry can have confidence in the SEC’s intentions, and the SEC can recognize that most digital asset participants are striving to operate responsibly," said The Digital Chamber’s statement.
Ongoing Litigation: A Review is Long Overdue
The SEC is still engaged in legal battles with several prominent industry players, including Binance, Coinbase, Consensys, and Ripple. Additionally, the regulator has sent Wells notices to Uniswap and Immutable, which could have significant implications for tokens and the industry as a whole.
In light of this ongoing litigation, The Digital Chamber’s proposal calls for the SEC to review all existing investigations with immediate effect. This would allow the new administration to take stock of the current situation and make informed decisions about future policy initiatives.
Priorities for the First 90 Days
The Digital Chamber has outlined a comprehensive agenda for the SEC during its first 90 days in office. Key priorities include:
1. Reviewing Existing Investigations
As mentioned earlier, The Digital Chamber is calling on the SEC to review all existing crypto-related investigations, Wells notices, and ongoing lawsuits with immediate effect.
2. Seeking Stays for Ongoing Litigation Cases
The group recommends that the SEC seek stays for ongoing litigation cases that do not involve fraud, investor loss, or risk of imminent harm. This would allow time for the regulator to finalize its approach and avoid unnecessary delays.
3. Rescinding the 2019 Framework on Howey Test
The Digital Chamber is also calling for the rescission of the 2019 framework on how the Howey test’s investment contract argument applies to digital assets. The group believes that this framework has created a ‘winner and loser’ dynamic, which can be detrimental to market participants.
4. Declaring the Hinman Speech No Longer Relevant
The Digital Chamber is also advocating for the declaration that the Hinman speech, by former SEC director William Hinman, is no longer relevant in conducting analyses of digital assets. The group believes that this speech has been misinterpreted and has led to unnecessary regulatory burdens.
5. Rescinding SAB 121
Another key priority for the SEC is the rescission of Staff Accounting Bulletin 121 (SAB 121). This rule requires SEC-reporting entities that custody cryptocurrencies to record those holdings as liabilities on their balance sheets. The Digital Chamber believes that this rule is burdensome and may push US investors offshore to ‘riskier’ custodial solutions.
6. Considering the Withdrawal of Proposed Rule 3b-16
Finally, The Digital Chamber’s proposal suggests that the SEC consider withdrawing from proposed Rule 3b-16. This rule would expand the definition of ‘exchanges’ to include decentralized finance protocols, among others.
A New Era for Crypto Regulation
The Digital Chamber’s proposal may hold significant weight as Atkins serves on its advisory board and Token Alliance leadership committee members have met with SEC commissioners Hester Peirce and Mark Uyeda to present policy priorities. With the incoming Trump administration set to take office, this proposal presents a unique opportunity for the SEC to reset its relationship with the crypto industry.
As the regulatory landscape continues to evolve, it is clear that The Digital Chamber’s proposal will play a significant role in shaping the future of crypto regulation in the United States. Will the SEC take heed of these recommendations and usher in a new era of cooperation between regulators and market participants? Only time will tell.
The Impact on Market Participants
The outcome of this proposal will have far-reaching implications for market participants, including:
- Increased clarity: A comprehensive review of existing investigations would provide much-needed clarity for industry players.
- Reduced regulatory burdens: Rescinding SAB 121 and withdrawing from proposed Rule 3b-16 could alleviate some of the regulatory burden on market participants.
- Improved relationships: By fostering a culture of mutual trust, the SEC can work more closely with the crypto industry to achieve common goals.
In conclusion, The Digital Chamber’s proposal presents a unique opportunity for the SEC to reset its relationship with the crypto industry. As the regulatory landscape continues to evolve, it is clear that this proposal will play a significant role in shaping the future of crypto regulation in the United States.
A Call to Action
Market participants are encouraged to engage with regulators and express their views on the proposed priorities outlined by The Digital Chamber. By working together, we can create a more favorable regulatory environment for the crypto industry.
Stay Informed
- Follow The Digital Chamber’s Token Alliance for updates on policy initiatives.
- Engage with SEC commissioners and staff to provide feedback on proposed rules.
- Participate in public consultations and comment periods to ensure your voice is heard.
