Commissioner Hester Peirce outlined 10 priorities for the Crypto Task Force, aiming for regulatory clarity while promoting innovation in digital asset markets.

By Jenny Cieplak, Zachary Fallon, Yvette D. Valdez, Stephen P. Wink, and Deric Behar

On February 4, 2025, Commissioner Hester Peirce, leader of the Securities and Exchange Commission’s (SEC’s) newly established Crypto Task Force (the Task Force), published a statement outlining the Task Force’s main areas of focus. She noted that the list is not intended to be exhaustive or definitive, and represents her own views (not necessarily those of the SEC or her fellow Commissioners).

Commissioner Peirce highlighted 10 priorities for the Task Force:

1. Security Status of Digital Assets: The precise status of digital assets (whether generally or in specific instances) has been the cause of much debate, enforcement, and litigation in the past decade. Since at least 2017, the SEC’s approach to whether a digital asset is a security has been determined by its application of the test set forth in the Supreme Court’s 1946 decision SEC v. W.J. Howey Co. (the Howey test). For Commissioner Peirce, determining the security status of digital assets under the securities laws is an issue that must be clarified because that status is foundational to addressing a host of other issues. She noted that the Task Force is “examin[ing] different types of crypto assets.” Whether the Task Force is evaluating digital assets individually or considering them within categories of shared attributes is unclear. Regardless, the industry is likely to welcome any clarity in this area.
2. Defining the Limits of the SEC’s Jurisdiction: The Task Force will “identify some areas that fall outside the Commission’s jurisdiction.” This is a logical follow-on issue to the first item, as establishing the security status of certain individual digital assets (or classes of digital assets) will determine whether the SEC has the authority to regulate or enforce vis-à-vis such assets. Commissioner Peirce invited market participants to submit no-action requests, so that the SEC staff can address specific circumstances under which it will not recommend enforcement to the SEC. She noted that any statement issued by the staff in response to no-action requests may provide the market with “a helpful window into the staff’s thinking.”
3. Relief for Coin or Token Offerings: The Task Force is considering “temporary prospective and retroactive relief for coin or token offerings” with certain conditions related to accurate reporting and fraud. Relief would be administered in the form of non-security status for the digital asset in question, eliminating the “fog of uncertainty” surrounding many digital assets, and clearing the way for trading on secondary markets that are not registered with the SEC. “This approach,” Commissioner Peirce noted, “would bridge the gap until a more permanent rule or legislation could be finalized,” signaling that a clear regulatory framework for cryptoassets is on the SEC’s and Congress’s agenda as well.
4. Registration: One of the chief refrains of former SEC Chairman Gary Gensler to the digital asset industry was “come in and register.” The suggestion was widely criticized among industry participants for being disingenuous. Most digital asset market participants found the pathway to registration fraught with difficulties, and wanted guidance tailored to the disclosures and approaches that were actually relevant to digital assets. In what appears to be a recognition of how difficult registration has been for the industry, Commissioner Peirce stated that the Task Force “will consider working with staff to recommend that the Commission modify existing paths to registration, including Regulation A and crowdfunding, so that people interested in registering token offerings will have a viable path for doing so.” The Task Force will also engage with the public to understand and remediate the various obstacles to registration.
5. Special Purpose Broker-Dealers: Broker-dealers have been left out of the digital asset world due to guidance issued by the SEC on custody of digital assets (for more information, see this Latham blog post). The SEC did introduce a new type of broker-dealer in 2020 known as a “special purpose broker-dealer” or “SPBD” (for more information, see this Latham blog post), but only one entity was able to successfully register as an SPBD and its operations have been limited. The difficulty lay in the fact that SPBDs had to limit their business only to digital asset securities. The Task Force will therefore explore ways to update the position articulated in the SEC’s 2020 statement, such as to permit broker-dealers to custody digital asset securities along with digital assets that are not securities.
6. Custody Solutions for Investment Advisers: It has been very challenging for investment advisers with digital asset strategies to comply with the custody requirements of the Investment Advisers Act of 1940. The Task Force will therefore engage with investment advisers to devise “an appropriate regulatory framework within which advisers can safely, legally, and practically custody client assets themselves or with a third-party.”
7. Lending and Staking: During the previous administration, digital asset products and services called “lending,” “earn,” “rewards,” “APY,” or “staking” were treated as falling within the ambit of the federal securities laws. The SEC also pursued enforcement actions against two major digital asset exchanges for such services (see here and here). The Task Force will work to provide clarity on the applicability of the securities laws to these products and services and will “address how such programs can be structured consistent with the law.”
8. Exchange-Traded Products (ETPs): It was only recently that the SEC approved a digital asset ETP, after years of denials and litigation by industry participants (for more information, see this Latham blog post). In her statement issued upon the first Bitcoin ETP approval, Commissioner Peirce asserted that the SEC’s track record of disapprovals had been “unnecessary” and tantamount to “obstruction.” The Task Force will therefore work with the SEC staff “to provide clear statements about the approach used when approving or disapproving these [ETP] applications,” as well as when “considering requests to modify certain features of existing [ETPs].”
9. Clearing Agencies and Transfer Agents: The Task Force will collaborate with market participants interested in tokenizing real-world assets or implementing blockchain-based solutions for financial markets, and will work to clarify rules for clearing agencies and transfer agents for when digital assets are involved.
10. Cross-Border Sandbox: The Task Force will “consider[] ways to facilitate cross-border experimentation” in digital assets via sandboxes that promote innovation while limiting risks in time-limited and scale-limited testing environments. This may require the participation of non-US jurisdictions and regulators, although Commissioner Peirce did not mention any in particular.

A Hard Fork for the SEC

The SEC also launched a new website and email address ([email protected]) dedicated to the Task Force, noting that the Task Force “seeks to provide clarity on the application of the federal securities laws to the crypto asset market and to recommend practical policy measures that aim to foster innovation and protect investors.” The Task Force also invites market participants and the public to submit comments and will consider requests for in-person or virtual meetings.

With the announcement of the Task Forces agenda, a commitment to collaboration with the public on crypto issues, and a genuine determination to provide the market with clear and workable rules, it is safe to say that the SEC’s era of crypto stonewalling and regulation by enforcement has concluded. Commissioner Peirce noted that market participants should still be aware, however, that the SEC is fully committed to enforcing its anti-fraud authority, and will “not tolerate liars, cheaters, and scammers” in the digital assets markets.

While Commissioner Peirce is realistic about the timeline and challenges involved in achieving the Task Force objectives in “an orderly, practical, and legally defensible way,” it is apparent that the SEC has broken with the past and is moving forward in a fresh new direction.