Statement Summary
In a recent keynote address, SEC Commissioner Hester Peirce reviewed the SEC’s evolving approach to regulating cryptocurrencies, emphasizing the need for clarity and coherent regulation. Drawing parallels to historic acts of rebellion, she stressed the significance of independent voices in shaping a fair regulatory landscape for crypto assets, which have lacked guidance. The SEC’s newly formed Crypto Task Force aims to address uncertainties around whether certain cryptocurrencies qualify as securities. Peirce suggested most existing crypto assets do not fit this definition but may still be tied to investment contracts. A tailored registration regime and a time-limited safe harbor for certain crypto transactions were proposed to foster innovation while ensuring investor protection. Overall, the SEC’s objective is to provide clearer guidelines while fostering a thriving and resilient capital market.
Original Statement
Thank you. Welcome to SEC Speaks. Before I begin, I would like to remind you that my views are my own as a Commissioner and not necessarily those of the Commission or my fellow Commissioners.
Exactly one month ago—April 19, 2025—marked the 250th anniversary of the start of the American Revolution. Crouching behind a stone wall at the Battle of Lexington and Concord was Samuel Whittemore, an octogenarian farmer who killed three British soldiers before being—as recorded on a memorial—“shot[,] bayonetted[,] beaten[,] and left for dead.” He defied the odds by living almost two more decades. Among the heirlooms that stayed in the family until my great uncle gave it to a historical society was a teacup with a broken handle that Whittemore had buried in his back yard as a token of protest against the much detested Tea Act. This little act of rebellion, which foreshadowed his much bigger act of rebellion, helped lay the groundwork for a nation that uniquely values human liberty, celebrates the independent spirit, and welcomes dissenting voices.
Mine has been one of those voices over the past several years. Many of my dissents related to the Commission’s approach to regulating crypto assets: an entirely new class of digitally native assets as well as “onchain” versions of currencies, commodities, collectibles, and securities enabled by a shared database architecture for recording ownership of digital property.
Having emerged from the crypto dissent years, I am glad to be able speak to you today as the head of the Commission’s Crypto Task Force about a rational and coherent path forward and a new paradigm at the SEC. My guess is that some of you in the audience are not very interested in crypto.
The SEC’s remit is broad, as is clear from the many topics on the SEC Speaks agenda. Important work lies ahead of us in areas such as expanding access to capital, reinvigorating our public markets, regrounding disclosure in materiality, fostering participation by more Americans in the capital markets, carefully implementing rules such as Treasury clearing, streamlining and modernizing the Commission’s hefty rulebook, rethinking the Consolidated Audit Trail and the gag rule, fostering innovation and competition in asset management, permitting the use of modern communication methods, and ensuring continued market resilience.
Crypto is not the most critical issue for the Commission, but it is important—even for those of you who see no value or worse in anything bearing the “crypto” label. First, the Commission’s approach to crypto in recent years has evaded sound regulatory practice and must be corrected. The Commission has relied on enforcement actions to tell people how it views the application of securities laws to crypto and as a substitute for notice-and-comment rulemaking. It has provided little useful guidance about how the securities laws apply under the facts and circumstances of crypto.
Second, although much of crypto to date has stood outside the traditional financial markets, change is coming fast both because traditional financial intermediaries are developing and engaging with crypto assets and market participants are experimenting with the tokenization of traditional securities. Finally, providing crypto clarity will allow the Commission to focus on the aforementioned many other things on its agenda.
Formation of the Crypto Task Force
The Task Force, which Acting Chairman Uyeda established at the start of his tenure and Chairman Atkins has continued, has been around for about four months. In that time, we have hosted four roundtables and planned one more for next month, received more than a hundred written submissions that respond to an extensive request for input, and held over one hundred meetings with industry participants and other members of the public with a diversity of views on a wide range of topics. Staff across the Commission has issued new crypto guidance, including on crypto mining and broker-dealer custody of customer crypto assets.
I support the issuance of further guidance to identify activities that are not covered by the securities laws, including on, for example, direct participation in proof-of-stake and delegated proof-of-stake systems and the technical nature of services that assist people seeking to participate in these consensus mechanisms. Staff has also rescinded guidance that has inhibited regulated entities from engaging with crypto assets.
In addition, the Task Force, along with staff across the Commission, has provided technical assistance in connection with congressional efforts to develop crypto legislation and has worked with other agencies to fulfill the President’s directives with respect to crypto.
Security Status of Crypto Assets
The most popular topic of discussion by far in written input and industry meetings has been security status. My short answer to the question—Are crypto assets securities?—is that most currently existing crypto assets in the market are not.
My supplemental answer is that economic realities matter and non-security crypto assets may be distributed as part of an investment contract, which is a type of security. The federal securities laws apply broadly to situations in which a person takes another person’s money in exchange for a promise to generate value for the person who provided the money. As defined in statute, the term “security” includes a variety of enumerated instruments—such as stock, bonds, and notes—that all have a key feature in common. All are “instruments that, in our commercial world, fall within the ordinary concept of a security.”
Securities ordinarily represent rights or an interest in a business entity or other promisor. For example, a share of common stock represents certain voting and economic rights in the business entity that issued it, and a note represents the right to receive payments from a promisor. The intrinsic value of these instruments depends on the financial prospects of the associated business entity or promisor.
The drafters of the federal securities laws did not intend the term “security” to include instruments that do not represent economic rights or an interest typical of an ordinary security with respect to a promisor. So despite the broad application of the definition of “security” in the federal securities laws, some financial instruments fall outside of its reach, including some that are sold by fraudsters.
The line demarcating transactions covered by the securities laws from those that are not is still hazy even after the SEC and courts have engaged for decades in following the congressional directive “to decide which of the myriad financial transactions in our society come within the coverage of the statutes.”
Conclusion
Regardless of how the SEC ultimately draws the lines, even if a broad swath of the crypto assets trading in secondary markets today were initially offered and sold subject to an investment contract, they clearly are no longer bought and sold in securities transactions. Many of these crypto assets are functional. With respect to others, purchasers no longer reasonably expect any business entity or other promisor to perform essential managerial efforts with respect to the crypto asset. In other words, the crypto asset’s value is intrinsically linked to something other than rights or an interest with respect to a business entity or other promisor. These assets are not themselves securities, nor are they any longer part of an investment contract, even if they once were.
Forthcoming rulemaking by the Commission and legislation from Congress should continue to provide clarity about which crypto assets are securities.
Two hundred and fifty years after Samuel Whittemore made his stand behind the stone wall, I stand here today grateful for the freedom for which he fought. I hope that all of us can look up from the minutiae of the securities laws for a moment to celebrate a quarter of a millennium’s fight for freedom.
Thank you to those of you who are on the SEC staff, were previously on the SEC staff, hope to join the SEC staff in the future, or are content serving in the private sector. All your voices are important in making sure that the SEC does its job well so that capital markets of this great Nation can continue to thrive.
