Quick Summary:
- Nasdaq urges SEC to create a structured crypto asset classification.
- Proposes a four-tier taxonomy: securities, investment contracts, commodities, and others.
- Calls for a balanced regulatory framework between the SEC and CFTC.
- Advocates for better oversight of integrated crypto firms.
- SEC signals a shift towards collaborative, innovation-friendly regulation.
Nasdaq Advocates for Four-Tier Crypto Classification
Nasdaq, the renowned American stock exchange, has formally called on the U.S. Securities and Exchange Commission (SEC) to establish a clearer, more consistent regulatory framework for crypto assets. In a 23-page letter to the SEC’s Cryptocurrency Task Force, Nasdaq emphasized the urgency for structured classification as the digital asset market continues to evolve.
Proposing a four-tier taxonomy, Nasdaq suggested categorizing digital assets into:
- Financial securities
- Digital asset investment contracts
- Digital asset commodities
- Other digital assets that do not fit existing legal definitions
This framework, Nasdaq argued, would help allocate regulatory responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC), depending on the nature of the asset.
Respecting Traditional Markets While Adapting to Innovation
John Zecca, Nasdaq’s Chief Regulatory Officer, stressed the importance of integrating digital assets without disrupting existing financial systems. “While a stock by any other word would still be a stock, the existing market ecosystem can readily absorb digital assets by establishing the proper taxonomy and calibrating certain rules to reflect what is truly new and novel about digital assets,” Zecca explained.
According to Nasdaq, digital assets that mirror traditional financial securities, such as tokenized stocks or bonds, should be regulated similarly by the SEC. Meanwhile, assets fitting the criteria of an investment contract under a clarified version of the Howey Test would also fall under SEC jurisdiction. Commodities would remain under the CFTC’s oversight, and any digital assets not fitting these classifications would be exempt from securities and commodities rules.
Enhancing Oversight for Integrated Crypto Platforms
In its proposal, Nasdaq also urged regulators to consider special oversight mechanisms for vertically integrated crypto firms — companies managing the issuance, trading, and custody of digital assets under one roof. Highlighting its own experience, Nasdaq pointed out that its global infrastructure already supports digital asset platforms across six continents with services like trading, surveillance, and clearing.
Additionally, Nasdaq suggested creating a crossover designation for trading platforms that deal with multiple types of digital assets simultaneously, aiming to streamline compliance and regulatory clarity.
A Shift in the SEC’s Approach to Crypto Regulation
The SEC itself seems ready for change. SEC Commissioner Mark Uyeda recently revealed that the agency is moving away from its enforcement-heavy stance and toward a more open, collaborative approach. Speaking to CNBC during the World Bank and IMF Spring Meetings, Uyeda noted that aggressive legal actions in the past had driven many crypto firms offshore.
He highlighted the launch of a new crypto task force focused on developing “clear, cost-effective rules for digital assets,” reflecting an effort to reduce the chilling effect on innovation.
Uyeda emphasized that the SEC is now working with the White House and Treasury through joint task forces on crypto and AI, and has started hosting public roundtables to gather feedback directly from the industry. One of the key topics discussed is the ongoing ambiguity surrounding the Howey Test and its application to modern digital assets.
A Promising Future for Crypto Innovation
New SEC Chairman Paul Atkins also expressed a strong commitment to revamping crypto regulation. He pledged a “principled” approach to ensure the United States remains a global leader in digital asset innovation, signaling a potential new era for crypto businesses seeking regulatory clarity and a more supportive environment.
With major players like Nasdaq pushing for reform and the SEC indicating a shift in attitude, the landscape for crypto regulation in the U.S. may soon become more navigable, structured, and innovation-friendly.