In a surprising twist, the United States Securities and Exchange Commission (SEC) recently removed its first formal definition of digital asset of its latest rule on hedge funds. The move comes after the definition was originally included in the SEC’s 2022 proposal to revise mandatory disclosures for hedge funds. The SEC noted that it is still reviewing the term “digital asset” and does not wish to adopt it under this rule at this time.
Cryptocurrency regulation: A step back or a strategic pause?
There DRY has taken a keen interest in the cryptocurrency sector, with its actions application and its pending rule proposals. Unlike the digital asset definition removedlast month, the SEC reopened a previously proposed rule proposal to redefine the term “exchange” and explicitly add the decentralized finance (DeFi) at definition. This move, along with others such as a February proposal to potentially ban investment advisers from holding assets in cryptocurrency companies, shows that the SEC is trying to integrate cryptocurrency into existing rules.
Mixed reactions to the SEC decision
There initial definition of a asset digital in hedge fund rule was neither extensive nor controversial. It described digital assets as those using distributed ledger technology or blockchain and included the “virtual currencies“, THE “tokens” and the “tokens. However, the SEC’s decision to remove the definition has drawn mixed reactions from industry stakeholders.
Many took the opportunity to criticize the SEC for withholding long-awaited regulatory clarity by not defining digital assets. The commission may have removed the definition because recognizing the uniqueness of digital assets as a novel product could weaken their litigation position that digital assets are securities and subject to the securities laws of the DRY.
There SEC decision to remove definition of digital asset of the hedge fund rule highlights the uncertainty surrounding the regulation of crypto currencies. As the SEC continues to address issues related to digital assets, the industry can only watch carefully and wait patiently to find out what sauce it will be eaten.
The article Regulation: The SEC backtracks on the definition of crypto appeared first on Corner Academy
