Remarks At The Crypto Task Force Roundtable On Crypto Trading, Mark T. Uyeda, SEC Acting Chairman, Washington D.C., April 11, 2025

Good afternoon, and welcome to the Crypto Task Force’s second roundtable, which is focused on crypto trading.  

Over 200 years ago, a group of stockbrokers gathered under a buttonwood tree to establish basic rules for the trading of securities on an organized market in New York City.[1]  Today, we are at a similar point in time in the history of markets as we gather to discuss the regulation of crypto asset trading within the United States. 

Like the early securities markets, organized markets for crypto asset trading developed organically in response to supply and demand for the emerging asset class.  The first crypto markets operated entirely outside of the regulatory perimeter.[2]  A number of state agencies exercised regulatory authority over crypto markets under the view that the platforms were akin to currency exchanges and subject to money transmitter licensing laws.[3]

State regulation of crypto asset trading raises the potential for there to be a patchwork of state licensing regimes.  We should consider whether there may be a more efficient method of regulation.  Under an accommodating federal regulatory framework, some market participants would likely prefer to offer trading in both tokenized securities and non-security crypto assets under a single SEC license rather than offer trading solely in non-security crypto assets under fifty different state licenses.

However, the federal securities laws and regulations may present challenges for broker-dealers and national securities exchanges seeking to offer trading in tokenized securities.  For example, national securities exchanges can only list registered securities and most tokenized securities in the market today are unregistered.[4]  Additionally, compliance with Rule 611 (the “order protection rule”) may not be possible with respect to customer orders for securities that trade in both tokenized and non-tokenized formats in on- and off-chain markets.[5]

Incumbent crypto asset trading platforms seeking to offer trading in tokenized securities also face unique obstacles.  Unlike securities exchanges, crypto asset trading platforms are typically vertically integrated with custody, execution, and clearing all occurring on the same platform.[6]

Blockchain technology offers the potential to execute and clear securities transactions in ways that may be more efficient and reliable than current processes.  For example, blockchains can be used to manage and mobilize collateral in tokenized form to increase capital efficiency and liquidity.[7]  Additionally, decentralized finance software protocols allow users to transact on a 24/7 basis via smart contracts.[8]  The drafters of the federal securities laws did not contemplate the use of blockchains or smart contracts to perform the functions of a transfer agent, facilitate the exchange of securities, or clear securities transactions.

While the Commission works to develop a long-term solution to address these issues, a time-limited, conditional exemptive relief framework for registrants and non-registrants could allow for greater innovation with blockchain technology within the United States in the near term.  I encourage market participants that are developing new ways to trade securities using blockchain technology to provide input on where exemptive relief may be appropriate.

Thank you to the Crypto Task Force and panelists for your time in preparing for this roundtable.  I look forward to the discussions to follow.