US Administration, Congress, and SEC and CFTC Leadership Push for Unified Digital Asset Framework

February 2025 has already proven to be a busy month in the congressional and US Securities and Exchange Commission public discourse regarding the digital assets sector. Members of the SEC and US Congress made significant announcements regarding the proposed pathway toward a new and more unified digital assets regulatory framework. When viewed alongside the Commodity Futures Trading Commission acting chair’s January 27, 2025 launch of a series of roundtables on digital assets, the US administration’s plan to simplify and streamline the treatment of digital assets across the government is now coming into focus.

On February 4, 2025, US Securities and Exchange Commission (SEC) Commissioner Hester Peirce released a statement outlining the upcoming work of the SEC’s new Crypto Task Force.[1] In her statement, detailed below, Commissioner Peirce listed 10 areas the Crypto Task Force intends to explore in the near term and encouraged participants in the digital assets industry to engage with the SEC.

On Capitol Hill, David Sacks, the “Crypto and AI Czar” appointed by the White House, led a joint press conference on digital assets with US Senate Banking Chair Tim Scott (R), House Financial Services Chair French Hill (R), House Agriculture Chair Glenn “GT” Thompson (R), and Senate Agriculture Chair John Boozman (R). The press conference outlined a proposed bicameral roadmap for digital asset legislation in line with the directive issued by the US administration in the Strengthening American Leadership in Digital Financial Technology Executive Order.[2] Senate Banking Chair Scott stated that the proposed actions are planned to be taken within the US administration’s first 100 days. Whether Congress can achieve this goal is uncertain; however, the congressional leaders made it clear in the press conference that digital asset legislation is a priority.

COMMISSIONER PEIRCE’S STATEMENT ON SEC CRYPTO TASK FORCE: ‘THE JOURNEY BEGINS’

The SEC Crypto Task Force

In Commissioner Peirce’s statement outlining the guiding principles and goals of the SEC’s new Crypto Task Force, she was critical of the SEC’s past handling of crypto, stating that it has been marked by “legal imprecision” and “commercial impracticality.” Commissioner Peirce noted that it will take time, given all that has occurred, for the SEC to get to the right place. Commissioner Peirce further stated that the SEC wants to foster innovation and grant people the freedom to build “interesting things” and experiment, while also providing robust investor protections. Commissioner Peirce also noted in addition to creating a working regulatory framework within the SEC’s authority, the Commission will use the regulatory tools at its disposal, such as staff letters and no-action relief, when necessary.

Most notably, Commissioner Peirce announced 10 items that the SEC’s Crypto Task Force will consider in the near term. The list, although not exhaustive, includes:

1. Security status: The Task Force will examine different types of crypto assets and their status under securities laws.
2. SEC jurisdictional scope: The Task Force will work to identify areas that fall outside the SEC’s jurisdiction. Commissioner Peirce offered up the SEC’s willingness to consider further no-action letters in the space.
3. Relief for coin and token offerings: The Task Force is considering the possibility of recommending Commission action to provide temporary prospective and retroactive relief for coin or token offerings for which the issuing entity or some other entity willing to take responsibility provides certain specified information, keeps that information updated, and agrees not to contest the Commission’s jurisdiction in the event of a case alleging fraud in connection with the purchase and sale of the digital asset. Commissioner Peirce stated that this could provide a temporary pathway for existing tokens until the development of legislation in the space.
4. Registered offerings: The Task Force will consider working with staff to recommend that the Commission modify existing paths to registration, including Regulation A and crowdfunding under Regulation CF, so that entities interested in registering token offerings will have a viable path for doing so.
5. Special purpose broker-dealer: The Task Force will explore possible updates to the special-purpose broker dealer no-action statement, which permitted broker-dealers to custody only digital asset securities. To date, only two firms have successfully registered as a special-purpose broker dealer and in her statement, Commissioner Peirce expressed that the current form of the no-action statement has not been a success.
6. Custody solutions for investment advisers: The Task Force will work with investment advisers to provide an appropriate regulatory framework within which advisers can safely, legally, and practically custody client assets themselves or with a third party.
7. Crypto-lending and staking: Commissioner Peirce stated that the SEC will need to provide clarity on whether crypto-lending and staking programs are covered by the securities laws and, if so, how.
8. Crypto exchange-traded products (ETPs): The Task Force will work with SEC staff to provide clear statements about the approach used when approving or disapproving SRO proposed rule changes to list new types of crypto exchange-traded products. The Task Force will also assist the staff and the Commission in considering requests to modify certain features of existing exchange-traded products, including to allow for staking and in-kind creations and redemptions, which have not been available to the existing spot crypto ETPs under the prior administration.
9. Clearing agencies and transfer agents: The Task Force will work on the intersection of crypto and clearing agency and transfer agent rules.
10. Cross-border sandbox: Finally, the Task Force will consider ways to facilitate cross-border experimentation on a limited scale and temporary timeframe, with the possibility of more permanent, long-term approaches.

Public Input

The SEC Crypto Task Force is currently considering public input on a wide variety of digital asset topics, including the 10 topics mentioned above. The SEC’s willingness to consider information from, and to meet with, members of the public provides the opportunity for those involved in the digital assets business to engage with the SEC early in the legislative and regulatory promulgation process. Although we expect there will be significant overlap with the legislative efforts of Congress, it is critical that the issues undertaken by the SEC’s Crypto Task Force are seriously considered from the start.

If you would like to discuss a digital asset issue or project with the SEC Crypto Task Force, please contact your regular Morgan Lewis lawyer or one listed below who can facilitate such discussions.

OTHER IMPORTANT REGULATORY UPDATES ON DIGITAL ASSETS

CFTC Acting Chairman Caroline Pham Announces Public Roundtable on Innovation and Market Structure

On January 27, Commodity Futures Trading Commission (CFTC) Acting Chairman Pham announced that the CFTC is launching a series of public roundtables on evolving trends and innovation in market structure, including a series of roundtables on digital assets, which are expected to be held over the next several months.  These roundtables will provide multiple opportunities for the CFTC to engage with industry experts and the public in an open and transparent forum.

Similar to the opportunity with the SEC’s Crypto Task Force, the CFTC’s roundtable series will provide the opportunity for clients to communicate a consistent message across federal regulators with authority in the digital assets space. Direct engagement with regulators should significantly benefit the development of any digital asset regulatory framework and ensure that input from various stakeholders is considered.

In addition to the roundtable series, the CFTC also announced that it will hold a Crypto CEO Forum of industry-leading firms to discuss the CFTC’s digital asset markets pilot program for tokenized non-cash collateral such as stablecoins.

JOINT LEGISLATIVE PRESS CONFERENCE ON DIGITAL ASSETS

Why Does This Matter?

The congressional leaders with oversight of the SEC and CFTC stated at the press conference that they are helping to make good on the president’s promise to create a clear framework governing digital assets in the United States. They also stated that the US administration and Congress will utilize the existing legislative framework set forth in the Financial Innovation and Technology for the 21st Century Act (FIT21),[3] which garnered bipartisan support, as the starting point for a digital assets market structure framework.

Regarding stablecoins, the Congressional leaders highlighted the recent introduction of the Guiding and Establishing National Innovation for US Stablecoins (GENIUS Act),[4] which aims to establish a clear regulatory framework for payment stablecoins. Representative Hill explained that the market structure and stablecoin bills currently being prepared involve working “hand in glove” with Democrats on a bipartisan basis. Representative Hill and Representative Bryan Steil (R) also released a discussion draft of the Stablecoin Transparency and Accountability for a Better Ledger Economy Act of 2025 (STABLE Act) to the House Financial Services Committee Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence on February 6, 2025. The draft bill establishes a framework for the issuance and operation of dollar-denominated payment stablecoins in the United States.

As each piece of legislation evolves, congressional leaders are focused on developing federal and state pathways for stablecoin issuance that would secure the United States as a leader in Digital Assets.

Key Takeaways from the Joint Press Conference

The key takeaways from the joint press conferences include the following:

• The establishment of a bicameral legislative working group: The House and Senate reportedly have created a bicameral legislative working group to develop digital asset legislation. The working group will include representation from the Senate Banking, House Financial Services, and House and Senate Agriculture Committees. This may foreshadow the establishment of a framework for joint CFTC and SEC authority over digital assets.
• Legislation of stablecoins is the initial focus for the working group: Senators Bill Hagerty (R), Tim Scott (R), Kristen Gillibrand (D), and Cynthia Lummis (R) introduced the GENIUS Act, a stablecoin bill that splits the oversight responsibilities between state and federal regulators, including the Federal Reserve and the Office of the Comptroller of Currency (OCC). Senator Scott emphasized the importance of resolving key disagreements in a bipartisan manner to keep the legislation moving, noting his desire and goal to get the stablecoin bill through the Senate within the new US administration’s first 100 days. The stated purpose of the stablecoin bill is to establish the U.S. dollar as a cornerstone of the global digital asset economy.
• Bicameral coordination of legislation on digital asset market structures: To ensure continued bicameral cooperation, the working group plans to build upon the market structure framework established in FIT21, which when initially adopted had strong support from members on both sides of the aisle. The Committee leaders stated that their goal is to create a digital asset market structure bill that would provide regulatory clarity for the digital asset industry and avoid “regulation by enforcement.” They added that they hoped to create “tri-cameral” support by bringing key digital asset industry stakeholders into the conversation, alongside members of the House and Senate.

WHAT’S NEXT?

The first days of the new US administration have kick-started digital asset regulation discussions at both the agency and Congressional levels. In addition to the efforts of the SEC, CFTC and the bicameral legislative working group, the regulatory review efforts of the President’s Working Group on Digital Asset Markets are ongoing. 

Given the push to advance these efforts within the US administration’s first 100 days, as well as the directive to the President’s Working Group to provide additional regulatory and legislative proposals within the next 180 days, the basis for a unified digital asset regulatory framework that is capable of adoption may come into focus by late summer or early fall of this year.

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