Inaugural crypto roundtable shows ‘clarity’ is a long way off

This is a segment from the Forward Guidance newsletter. To read full editions, subscribe.

---

The SEC’s new crypto task force gathered Friday to hear from 11 crypto attorneys and legal experts. 

It was the group’s inaugural roundtable discussion, lasting two hours and followed by 90 minutes of public Q&A. The meeting was dubbed the “Spring Sprint Toward Crypto Clarity” and had a focus on “defining security status.” 

Spoiler: To the chagrin of much of the crypto industry, roundtable attendees were not able to reach agreement on the very question that has plagued the securities regulator for 5+ years. 

Of course, answering the question of how to determine whether a crypto asset is a security wasn’t the primary purpose of the meeting. And, given that the SEC is operating with three commissioners and doesn’t currently have a permanent chair, we’d be shocked if the agency even hinted at passing formal rules around crypto. 

All that aside, though — even if Friday’s meeting seemed on the surface to be a nothingburger, we’d argue that the conversation was still telling when it comes to what we could expect from the agency in the next few years. 

Here are our top takeaways: 

Howey is still king 

All roads, for better or for worse, lead back to Howey. 

The panel on Friday spent almost the entire time debating how and if cryptocurrencies fit into the four-pronged Howey test. Until a formal crypto-specific rule is passed (which we don’t expect until the commission is full and a new chair is in place), don’t expect the Howey talk to die down. 

The guestlist was striking 

I can’t prove this, but I have a feeling that Friday’s meeting was the largest gathering of crypto-native lawyers inside the SEC, ever (well, save for the depositions and settlement meetings that undoubtedly have taken place over the years). 

Attendees included a16z Crypto Head of Policy & General Counsel Miles Jennings and Delphi Ventures General Counsel Sarah Brennan. 

Commission “interpretation” is just that 

Speaking of Howey, let us not forget that the SEC’s cherished securities framework is the result of a landmark Supreme Court ruling. 

The industry talks a lot about legal wins, like the district court ruling that secondary XRP sales were not unregistered securities). But until a crypto case makes it further up the appellate ladder, we aren’t going to have meaningful legal precedent. 

Yes, commissioners can pass rules and staff can issue guidance, but I’m still a believer that we’ll need to see more judicial opinions before crypto fits neatly into the current securities landscape. 

The guidance we’ve seen from the SEC in the post-Gensler era is even less permanent. 

Acting Chair Mark Uyeda himself said Friday that these “staff statements” have no legal backing. In other words: As of now, there’s nothing stopping the next chair from coming in and reversing everything that’s happened since Jan. 20. 

Of course, the next SEC Chair is widely expected to be Paul Atkins, Trump’s pick, who heads to the Senate on Thursday for his nomination hearing. We don’t currently foresee any major hurdles to his confirmation, and we certainly don’t expect him to walk back any of Uyeda’s pro-crypto statements. Still, we’ll be monitoring the situation closely.

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• The Drop: Apps, games, memes and more.
• Lightspeed: All things Solana.
• Supply Shock: Bitcoin, bitcoin, bitcoin.