SEC Announces Four Roundtable Discussions on Crypto Regulation from April to June 2025

The U.S. Securities and Exchange Commission (SEC) has announced that its Cryptocurrency Working Group will hold four new roundtable discussions from April to June 2025. These meetings are designed to clarify the regulatory framework for digital assets, marking a shift from the SEC's previous focus on enforcement to a more collaborative approach aimed at establishing a clear regulatory framework. The discussions will be open to the public and live-streamed online, ensuring transparency and accessibility.

Ask Aime: What impact will the new roundtable discussions on cryptocurrency regulation have on the digital asset market?

The four roundtable discussions will cover a range of topics crucial to the cryptocurrency landscape. The first, scheduled for April 11th, will focus on "Tailored Regulation for Crypto Trading." This session will delve into the specific regulatory needs and challenges associated with cryptocurrency trading platforms and practices. The second roundtable, on April 25th, will address "Key Issues for Custodial Institutions," exploring the regulatory and operational challenges faced by entities responsible for safeguarding digital assets. The third discussion, on May 12th, will examine "On-Chain Assets and Traditional Finance Integration," looking at how blockchain-based assets can be integrated into traditional financial systems. The final roundtable, on June 6th, will be titled "DeFi and the American spirit," focusing on the regulatory implications and opportunities presented by decentralized finance (DeFi) platforms.

Commissioner Hester Peirce has described these meetings as a "spring sprint toward crypto clarity," indicating a significant effort by the SEC to provide clear guidance and regulatory frameworks for the cryptocurrency industry. This initiative comes at a time when the industry is rapidly evolving, and there is a growing need for regulatory clarity to foster innovation and protect investors.

The roundtable discussions will also address key issues surrounding the definition of a "security" in the context of digital assets. One central theme will be the application of the "Howey" test, a legal framework used to determine whether a digital asset qualifies as an "investment contract" and, therefore, a security. The Howey test, established by the U.S. Supreme Court in 1946, requires four elements to be met: an investment of money in a common enterprise with a reasonable expectation of profits derived from the efforts of others. The SEC has historically applied this test to digital assets, but recent guidance suggests a shift in policy.

In February 2025, the SEC's Division of Corporation Finance issued guidance on meme coins, stating that transactions in these digital assets generally do not involve the offer and sale of securities. The guidance reasoned that meme coins do not involve an investment in a common enterprise, as funds are not pooled together for developing the coin or a related enterprise. Instead, the value of meme coins comes from speculative trading and market sentiment, similar to a collectible. Similarly, on March 20, 2025, the SEC released a statement on proof-of-work (PoW) mining activities, indicating that these activities generally do not constitute the offer and sale of securities. The statement explained that the act of Protocol Mining does not involve an expectation of profit derived from the entrepreneurial or managerial efforts of others, but rather from the administrative or ministerial act of mining performed by the miner.

These policy shifts suggest that the SEC is moving towards a more nuanced and common-sense approach to regulating digital assets. However, some critics have argued that the guidance fails to address the need for a facts and circumstances analysis focused on the economic realities of specific arrangements under the Howey test. The roundtable will also explore the challenges and opportunities associated with defining the security status of digital assets. Panelists will discuss the difficulty of applying the Howey test in a consistent and predictable manner, as well as the need for a principles-based regulatory regime that recognizes the varying features of different digital asset classes. Some panelists have suggested that the SEC consider a model based on the concept of control, where a digital asset's underlying protocol is sufficiently decentralized, and the federal securities laws should not apply.

The SEC's jurisdictional authority to regulate the digital assets industry will also be a topic of discussion. Panelists will consider whether the SEC or other regulatory agencies are better suited to oversee the industry. Some argue that the SEC's investor protection mandate makes it an ideal regulator, while others suggest that the SEC should explicitly exempt digital assets from being subject to the federal securities laws. Industry participants have expressed a strong desire for clarity in the application of the regulatory framework and a path to compliance. Some have proposed an interim regulatory framework with a built-in sunset that would allow industry participants to opt-in temporarily while providing the SEC with time to refine its approach and work towards notice and comment rulemaking.

The roundtable will also highlight the continuing importance of judicial decisions in shaping the regulatory environment for digital assets. Previous SEC enforcement actions and private litigation have produced a significant body of case law applying the Howey test and other securities law concepts to digital assets. These precedents will continue to expose industry participants to uncertainty and litigation risk, particularly in light of recent judicial decisions. Looking ahead, market participants should expect additional changes in the SEC's policy and enforcement approach towards digital assets. The SEC will likely continue to re-assess and clarify its interpretation of the Howey test's application to digital assets and work towards providing a clearer regulatory framework. However, a reduction in SEC crypto-focused enforcement should not be interpreted as the elimination of litigation risk associated with digital assets, especially given the possible emergence of a significantly more active private civil litigation bar.

In conclusion, the SEC's upcoming roundtable meetings represent a significant step towards clarifying the regulatory framework for digital assets. By bringing together industry experts and stakeholders, the SEC aims to address key issues and work towards a more coherent and effective regulatory approach. Market participants should stay informed about these developments and be mindful of the legal risks that may apply to their current business and strategic plans.