SEC’s Crypto Push Could Shift Who Raises Capital and Who Controls Trading

Nature abhors a vacuum, and marketplaces do, too. After all, no industry exists in a vacuum.

The digital asset space is finding that out in real time, as it enters into an apparent regulatory vacuum after the Sept. 15 failure of the Digital Asset Market Clarity Act to advance in the Senate. But federal agencies have already stepped into that vacuum. The Securities and Exchange Commission in particular is beginning to address cryptocurrency’s next commercial challenge of not simply how digital assets enter regulated finance, but how they raise capital, mature and trade once they get there.

The SEC’s proposed Regulation Crypto Assets would establish a route for token issuers to raise money and demonstrate when the investment contracts financing their development have ended. A Sept. 17 Innovation Exemption order, meanwhile, grants temporary, conditional relief allowing qualifying venues to trade tokenized U.S. stocks through blockchain-based liquidity pools.

Together, the measures address different parts of the digital asset lifecycle. One concerns the legal obligations surrounding newly developed crypto assets. The other creates a limited pathway for existing public equities to trade through new market infrastructure.