SEC Sends Proposed Crypto Interpretation to White House for Review

The US Securities and Exchange Commission (SEC) has forwarded its proposal to have most crypto assets not treated as securities under federal law to the White House’s Office of Management and Budget.

According to information available through the US General Services Administration, on Friday the SEC sent two proposed rules to the White House for review, including its interpretative notice from last week regarding which digital assets the agency could consider a security under federal law.

As of Monday, government records showed the proposal as “pending review” by the White House, potentially changing how the SEC handles regulation and enforcement of digital assets.

In a notice issued by the SEC last week, Chair Paul Atkins said that the agency would not consider four types of digital assets as securities under its purview: digital commodities, digital tools, digital collectibles — including non-fungible tokens — and stablecoins. The interpretation said that it would provide the agency with a “coherent token taxonomy” for the four types of assets and address how a “non-security crypto asset” may or may not be considered an investment contract.

The SEC rule, if finalized, would provide a bridge to crypto regulation until Congress were to pass a market structure bill to clarify comprehensive regulations of digital assets. The interpretation of federal securities laws followed the signing of a memorandum of understanding with the Commodity Futures Trading Commission (CFTC) — the other federal financial regulator expected to regulate digital assets under the proposed market structure bill — earlier this month.

Related: CFTC staff clarify expectations on using crypto as collateral

White House reportedly reached “agreement in principle” on crypto bill

Politico reported on Friday that representatives from the White House and Congressional lawmakers reached a deal on stablecoin yield that could advance the market structure bill in the Senate Banking Committee. The panel indefinitely postponed its markup of the bill, called the CLARITY Act, in January following Coinbase CEO Brian Armstrong saying the exchange could not support the legislation as written.

As of Monday, the banking committee had not publicly announced a new date for the bill’s markup. Senate Majority Leader John Thune reportedly said in March that the chamber intended to prioritize a vote on the SAVE America Act — legislation that would require voters to provide proof of US citizenship in person to register — before bills with bipartisan support, such as CLARITY.

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