Ex-SEC counsel expects token classifications, custody guidance soon

Adrienne Gurley outlines what she believes will be key near-term priorities for the securities regulator

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Former SEC senior counsel Adrienne Gurley yesterday gave her take on how the SEC could approach the influx of crypto ETF proposals. She had a few other things to say. 

For one, the Venable LLP partner told me she’s expecting token classification guidance and custody rule revisions to be key near-term priorities for the securities regulator.

President Donald Trump’s executive order laid out 30-, 60- and 180-day deadlines for the SEC and others. The dates to watch appear to be:

  • Feb. 22, by which agencies identify regulations/guidance/orders affecting the digital assets sector. 
  • March 24, by which each agency submits recommendations related to those. 
  • And finally, July 22, by which the working group sends a report to the president.

“Clear guidance will increase confidence in the market, encourage innovation (something that is a focus of [Paul] Atkins), and allow for larger financial institutions to consider entering the crypto custody business,” Gurley said.

Getting rid of SAB 121 was a start. Galaxy Digital execs wrote in a Wednesday report they expect traditional banks to provide crypto custody and trading — “starting a process that could see them gradually transform into self-custodial neobanks.”

The next step: the world’s top custody banks safeguarding digital assets. This could help spur the SEC to allow spot bitcoin and ether ETFs to perform in-kind creations and redemptions, they add.

“Banks could also begin offering lending and financing services for digital assets, such as margin trading backed by bitcoin collateral or the creation of innovative structured products that provide bespoke exposure to the underlying digital assets,” the Galaxy pros noted.

As for the SEC’s enforcement strategy, any matters involving fraud (related to crypto or not) will remain a priority, Gurley explained.

But, she noted, the commission is likely to step away from investigating crypto cases purely based on registration violations. Particularly after an appeals court again called out the SEC for “arbitrary and capricious” behavior.


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