The United States Securities Commission (SEC) has submitted a proposal to amend the code for the hosting of encrypted assets in preparation for updating existing regulatory requirements. The Congress vote on Crystal Clarity Act has not advanced, but the SEC is continuing to promote encryption policy adjustments through its existing mandate.
Proposed Focus Host Framework
According to the rule change document submitted by the SEC on Tuesday, the focus of this revision is on the "Improved and Modernisation" of encrypted asset hosting. According to the proposal, the objective was to provide a clearer hosting framework for investment advisers and investment companies to hold encrypted assets.
In the document, SEC indicated that this rule-making would also synchronize some of the obsolete provisions. Regulators believe that some old provisions are no longer necessary for investor protection as market structures and securities transactions and holdings change.
The applicable target points to the institution.
In terms of disclosure, the proposal is primarily directed at investment advisers and companies. The core direction is not to introduce an entirely new encryption bill, but to clarify, within the existing regulatory system, how these institutions can host encrypted assets and which old requirements can be adjusted or derogated from.
Parallel to parliamentary legislation
Crypto Clarity Act is still at a standstill and the vote has not yet been completed. However, the SEC has recently released a number of signals that are continuing to advance encryption regulatory updates.
Earlier this month, the SEC has begun to prepare the so-called “innovation exemption” to allow monetized shares to be traded in a block chain for 24 hours, seven days. The latest hosting proposal continues this round of regulatory updates.
Last week, the President of the United States also urged parliamentarians to push for the Crypto Clarity Act. SEC Chairman Paul Atkins had previously indicated that he would support Congress in moving the bill forward.
It's smaller than an Act of Parliament.
Compared to the broader Crypto Clarity Act, the hosting framework proposed by the SEC this time is narrower and focuses on the hosting rules themselves, rather than fully reshaping the regulatory division of the encryption industry.
However, in terms of the regulatory path, the SEC is still trying to address some of the specific issues through rule-changes, even if Congress legislation is still pending. This means that some of the details of encryption regulation in the United States may be advanced before broader legislation.