Peirce, Uyada, and Atkins Urge More Rational Framework to Support Crypto Market Development
Top officials at the U.S. Securities and Exchange Commission (SEC) voiced concerns over the current state of cryptocurrency regulation during the agency’s "Know Your Custodian" roundtable event held on April 25.
Speaking at the event, SEC Commissioner Hester Peirce compared the regulatory landscape faced by U.S. financial firms engaging with digital assets to playing a children's game in the dark. She likened the current environment to the game "the floor is lava," where participants must avoid direct contact — symbolizing firms’ efforts to avoid handling crypto assets amid regulatory uncertainty.
Navigating Regulatory Uncertainty
Peirce explained that SEC registrants — including brokers and alternative trading systems (ATS) — are moving cautiously to avoid regulatory missteps, often refraining from directly managing or custodying cryptocurrencies.
Key challenges cited include:
Unclear classification of which crypto assets qualify as securities
Lack of clarity around qualified custodians for digital assets
Regulatory uncertainty surrounding staking and governance activities
Peirce warned that the cautious approach hampers the development of a robust and innovative crypto market.
Calls for Practical Custody Solutions
SEC Commissioner Mark Uyada echoed these concerns, emphasizing the need to expand custodial options for firms dealing with digital assets. Uyada suggested that state-chartered limited-purpose trust companies could be recognized as qualified custodians, providing greater flexibility and legal clarity for advisers handling crypto assets.
New SEC Chair Signals Support for Crypto Innovation
Newly appointed SEC Chair Paul Atkins also addressed the gathering, expressing optimism about the potential of blockchain technology to deliver efficiency, risk reduction, transparency, and cost savings across financial markets.
Atkins criticized the regulatory uncertainty left by the previous leadership under Gary Gensler and pledged to work closely with market participants, the Trump administration, and Congress to develop a rational, transparent regulatory framework for digital assets.
"Clear guidelines are essential to foster innovation while protecting investors," Atkins stated, signaling a shift toward a more collaborative regulatory approach.
Outlook
The SEC’s leadership acknowledges that addressing regulatory ambiguity is crucial as digital assets become an increasingly central component of the financial system. Efforts to create comprehensive, practical regulations are expected to continue, shaping the future environment for crypto firms, custodians, and investors alike, according to Cointelegraph.
