SEC opens public comment: How to optimize the regulatory framework for crypto asset trading platforms?

【Chain Wen】The U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce recently issued a statement announcing the launch of an FAQ guide in collaboration with the Trading and Markets Department, widely soliciting suggestions from market participants on how national securities exchanges (NSE) and alternative trading systems (ATS) should regulate and handle crypto asset trading. The consultation focuses on two key issues: first, the classification of crypto assets as securities; second, how to operate clearing and settlement for hybrid trading pairs (i.e., crypto asset pairing for purchase and sale).

Peirce emphasized that SEC internal teams are ready to engage in in-depth communication with market participants to jointly explore how to promote compliant crypto asset trading on regulated trading platforms. She believes that the most urgent market need right now is to establish more transparent and consistent market structure standards. These standards should ensure investors are adequately protected and market order is maintained, while also allowing sufficient room for technological innovation, rather than constraining industry development through excessive regulation.

Notably, Peirce raised a sharp question: Are the current regulations, Regulation ATS (established in 1998) and Regulation NMS, outdated when facing new entities like crypto assets and blockchain technology? This implies that the regulatory framework designed over twenty years ago may no longer keep pace with modern developments.

So what exactly are the consultation topics? The SEC listed a long series of questions:

Regarding Access and Innovation—How can the barriers to listing crypto asset securities on trading platforms be lowered? How to encourage platforms to experiment with innovative trading models? Are current regulatory costs disproportionately burdening crypto trading?

Regarding Technical Rules—Is there a need to design a new Form ATS filing specifically for “crypto ATS,” or should existing disclosure requirements be adjusted? Should data submitted by crypto ATS remain non-public, or should SEC review or market disclosure be introduced?

Regarding Reporting Requirements—Considering blockchain’s inherent transparency and traceability, is there still a need for traditional quarterly reporting like Form ATS-R?

Regarding Internationalization—When trading pairs involve non-USD assets, how should the compliant pathways for USD conversion be regulated?

Regarding Risks and Privacy—How to balance strict requirements such as confidentiality of trading information, system risk controls (Rule 15c3-5), and system compliance (Reg SCI) in the crypto space? When individual developers use automation tools or decentralized methods for trading, how can regulators supervise effectively without hindering their activities?

Peirce emphasized that this consultation is not merely a procedural step but provides a genuine policy reference for the SEC’s ongoing “Crypto Working Group.” In other words, regulators are seriously listening to market voices and hope to systematically improve the overall regulatory framework for national securities exchanges and alternative trading systems through this process. This attitude at least indicates that U.S. regulators are attempting to find a balance between protecting investors and encouraging innovation.