SEC Cancels Vote on Long-Awaited Reg Crypto Proposal
The Securities and Exchange Commission has canceled the August 14 meeting where commissioners were expected to consider Paul Atkins' long-awaited Reg Crypto proposal, pushing back the first formal step toward a new framework for certain crypto offerings.
Key Takeaways
- SEC canceled its scheduled Reg Crypto vote.
- The proposal now has no meeting date.
- A separate tokenization exemption remains unpublished.
- Congress returns to CLARITY in September.
The SEC issued its cancellation notice on August 13, one day before the meeting was due to take place. The agency gave no reason for the decision and did not announce another date.
Reg Crypto was the only item on the agenda. Under the original meeting notice, commissioners were due to consider whether to propose a tailored offering regime for certain investment contracts involving crypto assets.
The cancellation leaves that proposal outside the formal public-comment process just as Congress prepares to return to its own crypto market-structure negotiations in September.
Reg Crypto Falls Off the Calendar
Atkins first laid out Reg Crypto in a March 17 speech, proposing temporary exemptions for early-stage crypto projects and fundraising alongside a safe harbor intended to clarify when an investment contract involving a crypto asset has ended.
At the time, he said he expected the Commission to consider a proposal within weeks. Nearly five months passed before Reg Crypto finally appeared on the Commission’s public calendar.
The August meeting would therefore have marked the transition from policy speeches to an actual rulemaking proposal, opening the framework to public comment and giving the industry its first look at the SEC’s proposed legal boundaries.
It also would have come before Congress resumed work on the CLARITY Act. That timing had put the SEC in position to move ahead with part of its crypto agenda before lawmakers returned in September.
Atkins has also acknowledged that SEC action cannot replace legislation, arguing that only Congress can establish a durable, comprehensive market-structure framework.
The CLARITY Act also lost its August window and moved into September. The result is that both processes are taking longer than expected, but for different reasons: Congress is still negotiating legislation, while the SEC has postponed a specific regulatory proposal that was already scheduled for consideration.
A Separate Tokenization Exemption Is Also Running Late
The SEC’s planned innovation exemption for tokenized securities is a different initiative and has not yet reached the Commission calendar.
Commissioner Hester Peirce said on March 12 that SEC staff was working on limited exemptive relief for certain tokenized-securities trading. A little more than a month later, on April 21, Atkins said the agency was “on the cusp” of releasing it.
The exemption was expected to give firms room to test new forms of on-chain securities trading while regulators develop more permanent rules. Depending on the final scope, that could cover areas such as blockchain settlement, automated market makers and platforms built differently from traditional national securities exchanges.
More than three months after Atkins’ April remarks, however, no proposal has been published.
CoinDesk reported on August 13, citing three industry sources, that the exemption is facing another delay amid concerns from Wall Street and the White House over market structure and its interaction with congressional legislation.
Those reported concerns should be separated from what the government has confirmed publicly. Neither the SEC nor the White House has said that White House objections caused the delay.
Why Wall Street Is Pushing Back
The dispute surrounding the innovation exemption is primarily about what happens when tokenized securities begin trading outside the infrastructure that currently connects U.S. equity markets.
Allowing U.S. securities to trade through crypto-native platforms would go beyond simply representing existing stocks on a blockchain. It could create new venues with their own liquidity, pricing and execution mechanisms.
SIFMA has supported tokenization as a technology while arguing that tokenized securities should generally remain subject to the same market rules as their traditional equivalents.
In a March 17 submission to the SEC, the trade group said Regulation ATS and Regulation NMS should generally continue to apply to tokenized securities and the intermediaries that trade them.
The concern is fragmentation. A U.S. stock currently trades across venues connected by rules governing quotations, routing and execution quality. If a tokenized version begins trading on a separate blockchain venue with its own liquidity and price, brokers need to know how that market fits into their obligations to compare prices and seek appropriate execution for customers.
An exemption broad enough to allow crypto-native venues to develop before those connections are defined could create a parallel market structure rather than simply modernizing the existing one.
Nasdaq Is Taking the Integration Route
Nasdaq’s tokenization plans offer a useful contrast because they attempt to add blockchain technology without separating tokenized securities from the infrastructure already used by U.S. markets.
Its approach keeps blockchain-based securities within established trading and clearing systems rather than building a separate crypto-native venue around them.
Keeping tokenized securities inside the existing exchange framework would allow regulators to apply familiar rules covering market access, price discovery, execution and surveillance while adapting the infrastructure underneath them.
A crypto-native platform seeking exemptive relief presents a harder issue because regulators must decide which parts of the existing framework can be relaxed without weakening the connections between markets.
The disagreement is therefore not primarily over whether securities can be tokenized. It is over whether blockchain trading should be introduced through the existing market structure or allowed to develop outside parts of that structure under temporary SEC relief.
CLARITY Matters Differently to Each SEC Plan
Congressional legislation hangs over both debates, but the connection is not the same.
For Reg Crypto, the link is explicit: the SEC can provide interim rules for certain offerings, but a broader and more durable crypto market structure would still depend on Congress.
For the innovation exemption, the overlap is broader. Future market-structure legislation could affect how tokenized trading venues, intermediaries and securities are regulated, which gives the SEC reason to consider how temporary exemptions would fit with whatever Congress eventually passes.
That does not establish that CLARITY negotiations, or concerns from the White House, are responsible for the exemption’s delay. The SEC is simply considering temporary regulatory relief while lawmakers are still deciding what the permanent statutory framework should look like.
What Market Participants Are Waiting for Now
Crypto projects looking for clearer rules around fundraising and investment contracts are still waiting for Reg Crypto to enter formal rulemaking. Firms trying to build new venues for tokenized securities are waiting for the SEC to define how much flexibility its innovation exemption will actually provide.
September will bring Congress back to the CLARITY Act, but it does not automatically resolve either issue.
For Reg Crypto, the next concrete development would be a new Commission meeting and publication of the proposed framework. For tokenization, the industry still needs to see the actual exemption before it can judge how far the SEC is willing to let blockchain-based trading move beyond existing exchange infrastructure.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
