SEC Statement On Stablecoins
On April 4, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on stablecoins. In Particular, the statement addresses stablecoins that are designed to maintain a stable value relative to the United States Dollar (“USD,”) on a one-for-one basis, can be redeemed for USD on a one-for-one basis (i.e., one stablecoin to one USD), and are backed by assets held in a reserve that are considered low-risk and readily liquid with a USD-value that meets or exceeds the redemption value of the stablecoins in circulation (“Covered Stablecoins”).
Stablecoins Generally
A stablecoin is a type of crypto asset designed to maintain a stable value relative to a reference asset, such as USD, another fiat currency, a commodity like gold, or a pool or basket of assets. Stablecoins usually track with the underlying asset on a one-to-one basis (for example, one stablecoin for $1 USD). Stablecoins can maintain their value in different ways, including through a set reserve
SEC Statement On Proof-Of-Work Mining Activities
On March 20, 2025, the SEC’s Division of Corporation Finance (“CorpFin”) issued a statement on certain proof-of-work mining activities. Illustrating CorpFin’s evolving understanding of the digital world, the statement drills down to a very specific aspect of the crypto mining industry.
The CorpFin statement “addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network.” In the statement, CorpFin refers to these mined crypto assets as “Covered Crypto Assets” and the mining as “Protocol Mining.”
Protocol Mining
Networks utilizing Protocol Mining are governed by computer code eliminating the need for designated trusted intermediaries. The programmed software enforces certain network rules, technical requirements, and rewards distributions. Public, permissionless networks allow anyone to participate in the network’s operation, including the validation
Crypto Industry Gets A Second Chance
The last time I substantively wrote about cryptocurrencies and the crypto industry was in April 2023, when the SEC was firmly hostile against the industry and a slew of negative events (FTX collapse, etc..) pretty well eliminated crypto as an active element in the capital markets (see HERE). That has changed!
Here is a recap of the newly regenerated crypto capital markets initiatives:
Digital Asset Executive Order
On January 23, 2025, President Trump signed an executive order entitled “Strengthening American Leadership in Digital Financial Technology” supporting the growth of the digital asset industry in the U.S. The order specifically:
- Protects and promotes the ability of individual citizens and private-sector entities to access and use open blockchain including the ability to develop and deploy software to participate in mining and validating crypto assets;
- Allow individual citizens and private-sector entities to self-custody digital assets;
- Promotes and protects the U.S. dollar through the development and growth of dollar backed stablecoins;
SEC Chair Uyeda Talks SEC Priorities
Just a few weeks after SEC Commissioner Hester Peirce gave some insight into the SEC’s priorities (see HERE), acting SEC Chair Mark Uyeda got more granular on what we can expect under his regime. Commissioner Uyeda drilled down on particular SEC goals while giving a speech at the Florida Bar’s Annual Federal Securities Institute and M&A Conference.
The overarching goal of the SEC over the next few years will be to foster innovation, job creation and economic growth by maintaining cost effective regulations throughout a business’s life cycle. To accomplish these goals, the SEC intends to “return normalcy” to the SEC by being cognizant of its legal authority, policy priorities and enforcement initiatives, all of which have gone awry over the last few years.
Commissioner Uyeda highlights some of the actions already taken to facilitate these goals, including rescinding Staff Legal Bulletin 14 related to shareholder proposals and proxy statements (for more on Staff Legal Bulletin 14 see
FINRA Approves OTC Markets To Trade Digital Securities
As the SEC continues its onslaught against the crypto industry, including the filing of high-profile actions against Binance, which operates the largest crypto asset trading platform in the world, and Coinbase, a multi-billion-dollar crypto trading platform, FINRA has quietly approved OTC Markets to provide trading services for digital asset securities.
OTC Markets announced the approval in early May but don’t expect any activity in the near future. Concurrent with announcing the approval, OTC Markets CEO, R. Cromwell Coulson, stated:
“We also recently received FINRA approval to permit digital asset securities to be traded by broker-dealers on OTC Link ATS. This approval furthers our mission of operating regulated markets for broker-dealers and issuers of securities. While it will be some time until the regulatory framework and infrastructure develop, we believe our markets are well-positioned to be part of new trading, data, and disclosure solutions for these securities.”
OTC Markets is clearly putting itself in a position to
