Six Steps For Navigating The SEC’s New Crypto Task Force

Leveraging StarCompliance’s Industry Leadership for Crypto Assets Compliance 

The Securities and Exchange Commission (SEC) has made a decisive move to address the evolving regulatory landscape for crypto assets. This past week, the acting Chairman Mark T. Uyeda announced the formation of a new Crypto Task Force led by Commissioner Hester Peirce. This action seeks to create a comprehensive and clear regulatory framework for crypto assets – marking a significant shift from reactive enforcement to proactive policymaking. For firms and their employees working in the crypto space, this news presents both challenges and opportunities to revisit your internal policies in order to adapt and thrive with regulatory shifts. 

Here are six steps firms can take, leveraging StarCompliance’s (Star) expertise, to navigate what’s in store from the SEC Crypto Task Force. 

Step 1: Learn About the Scope of the New Task Force 

The Crypto Task Force aims to bring clarity and consistency to crypto asset regulations. Its key objectives include: 

• Setting up clear regulatory guidelines 
• Establishing realistic paths to registration 
• Building sensible disclosure frameworks 
• Deploying enforcement resources when needed 

Firms need to understand that the task force’s work could lead to significant changes in registration requirements, reporting protocols and operational processes. The best way to stay compliant is to get ahead of these initial objectives internally. 

Step 2: Leverage Regulatory Technology 

Star provides a suite of employee regulatory compliance tools specifically designed to help firms manage these challenges in the crypto space. These solutions include: 

• Pre-clearance tools to manage employee crypto assets transactions and prevent conflicts of interest 
• Ongoing updates, real-time monitoring and reporting to ensure adherence to shifts in SEC regulations, as well as worldwide surveillance for regulatory shifts in foreign markets 
• Data-driven insights to identify and mitigate potential compliance risks before they cause a problem 

By deploying these tools, organizations can streamline their employee compliance processes and significantly reduce the risk of costly penalties and reputational harm. 

Step 3: Clarity on Disclosure Frameworks 

The task force’s focus on disclosure frameworks underscores the importance of transparency in the crypto market.  By aligning your program with the SaaS-based employee regulatory compliance software of Star, your organization could: 

• Create tailored templates for consistency in disclosure reporting 
• Streamline and harness the power of data collection that integrates with existing systems 
• Automate alerts that ensures your system evolves with regulatory changes 

Step 4: Step Up Collaboration and Transparency 

One of the key tenets of the Crypto Task Force is collaboration. Firms must be ready to work with regulators and an ecosystem of stakeholders. Star’s suite of products and services is best-in-class at facilitating: 

• Centralization of communications with the SEC, as well as other regulatory bodies 
• Transparency with record keeping for ease of auditing and regulatory alignment 
• Internal collaboration with tools that aid in communication on regulatory changes and compliance strategies 

Step 5: Strengthen Ethical Practices 

As the balance between protecting investors and adopting the warp speed of industry innovation continues, regulatory bodies will always look for ways that firms demonstrate their commitment to strong employee compliance practices. Star’s award-winning platform can: 

• Work with a client’s existing system to upgrade its crypto trading compliance capabilities 
• Provide training assets for teams to learn about the latest regulatory updates and guardrails 
• Align with an organizations policies and procedures to address potential conflicts of interest 

Step 6: Stay Ahead of Regulatory Developments 

The regulatory landscape for crypto assets is dynamic and evolving in real time. For organizations to success and flourish they must stay informed and remain nimble. The products and services that Star provides can give firms a safety net by: 

• Providing ongoing updates to compliance tools as new guidance and laws emerge 
• Partnering with in-house compliance and legal teams to anticipate the evolving proprieties of the task force 
• Delivering multi-national organizations with a fully integrated systems that dovetail with global crypto regulatory laws 

A Look Ahead  

The SEC Crypto Task Force represents a pivotal moment for the crypto industry. With this introduction, combined with the enactment of MiCA in the European Union, increased regulatory scrutiny will seem daunting. This also represents an opportunity for firms to up their game by strengthening their compliance frameworks, which will not only provide needed guidance to their employees but foster greater trust with the investment community, as well as regulator bodies.  

Star’s commitment to employee regulatory compliance has been unwavering for the past 25 years and is uniquely positioned to help firms navigate this new era of regulation. To learn more about Star’s Crypto Trading Compliance Software, schedule a demo here.

Owen Rapaport

Owen Rapaport joined StarCompliance as the Executive Director of Product Management, Digital Assets as part of Star’s acquisition of Aer Compliance. Owen was the co-founder & CEO of Aer Compliance, the first employee trade compliance software for digital assets. Owen has worked with the largest funds, market makers, and exchanges, in both financial services and the public sector, to combat insider trading and front-running in the space. Owen is a graduate of the University of Oxford, and previously worked at Bain & Company and in private equity.

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