Article written by: Prathik Desai, Nameet Potnis, Thejaswini MA
Article translation: Block unicorn
The U.S. Securities and Exchange Commission (SEC) took its first steps toward a more détente with the cryptocurrency industry on Friday, but fell short of providing all the answers the industry was expecting.
After years of enforcement instead of regulation, the securities regulator convened industry heavyweights for the first time to hold a crypto roundtable meeting, calling it a spring sprint towards clarity on cryptocurrencies.
Despite the hopeful title, attendees spent much of the two-hour meeting arguing over the decades-old “Howey Test” rather than charting a clear regulatory path.
There was some gain from the conference — but was it enough? This article explores what this regulatory shift means for the crypto industry:
How the SEC acknowledged past failures but still struggled to define future direction
What the proposed DART tracking system means for transparency
Why NFTs may be the next area to receive regulatory guidance
What the industry desperately needs is missing from the conversation
New leadership, new regulatory approach
The SECs governing styles before and after Trumps second term were in stark contrast. Former Chairman Gary Gensler declared that most cryptocurrencies were securities and used law enforcement as the primary means; while Acting Chairman Mark Uyeda and Commissioner Hester Peirce opened the meeting by acknowledging the need for a collaborative reboot of the regulatory framework.
“I think we’re well positioned for the sprint ahead,” Pierce told attendees, referring to the working group’s ambitious “Spring Sprint for Crypto Clarity.”
“Can we translate the characteristics of securities into a concise classification system that covers the many different types of crypto assets that exist today and may exist in the future?” This is one of the questions Pierce posed when addressing the dilemma of considering cryptocurrencies as securities.
This invitation to open dialogue marks a shift in the SECs attitude.
The roundtable invited more than a dozen securities lawyers and cryptocurrency experts, including well-known figures on the support side such as Miles Jennings, head of crypto policy and general counsel at A16z, and critics such as former SEC lawyer John Reed Stark.
What attracted the most attention in the industry was the SECs frank admission that the agencys previous approach had failed.
Miles Jennings, head of crypto policy and general counsel at A16z, puts it bluntly. “The way the previous administration regulated the industry failed to achieve any of the SEC’s goals — it did not protect investors, nor did it promote capital formation or market efficiency. As such, the current approach is clearly a failure, and we must improve it.” Even more surprising: The SEC seems to agree.
Old problems, limited progress
Although the participants were all new faces and the atmosphere was very harmonious, the roundtable soon fell into a familiar debate: How to use the Howey test developed in 1946 to determine the attributes of securities?
Participants spent nearly the entire discussion debating how the nearly 80-year-old Orangery framework applies to tokens, decentralized exchanges, and other crypto innovations.
For an industry that wants to move on from the past, this focus on improving old tools rather than building new ones has disappointed many.
“Crypto optimists (advocates) argue that reliance on current law and an unlimited number of future Howey test decisions is not a viable regulatory regime,” crypto lawyer Bill Hughes said in an article on X.
The industry wants a fresh start — defining what is and is not a security — rather than an endless reapplying of old precedents.
This tension played out in real time, with some participants trying to steer the conversation toward a more forward-looking approach. Rodrigo Seira, special counsel at Cooley LLP, questioned the basic premise that investment intent automatically creates a security. “I think we have to understand that just because there is an investment intent behind a purchase, it doesn’t mean that the transaction automatically becomes a security,” Seira said, citing the example of a purchase of art that has both aesthetic and investment value. While the conversation remained on the definition of a security, subtle hints of more practical progress emerged at the edges of the event.
Commissioner Pierce told reporters on the sidelines that non-fungible tokens (NFTs) could be the next category to receive guidance from the SEC following recent announcements about meme coins and proof-of-work mining. “I think we’re going to see guidance around NFTs as well,” Pierce said.
This casual remark has major implications for projects like Stoner Cats and Flyfish Club, which have previously faced SEC lawsuits for using NFT sales to fund their businesses. Formal clarification could open the door for creators to use NFTs as a legal fundraising tool without the need for securities registration.
DART System: The Transparency Revolution is Coming
Aside from the several concrete outcomes of the roundtable, something else did stand out — a parallel development that could fundamentally reshape crypto trading.
The SEC’s recently announced Digital Asset Reporting and Tracking System (DART) will change the way regulators monitor crypto markets. Unlike the philosophical debate over the Howey Test, DART represents a practical approach to one of the SEC’s core concerns: transparency.
The proposed system will track not only transactions on public blockchains, but also private off-chain transactions, providing a comprehensive understanding of digital asset ownership across platforms. This solves a long-standing regulatory blind spot - while transactions on DeFi protocols are publicly visible on the chain, centralized exchanges typically process transactions internally without recording them on the blockchain.
“Transactions in digital asset securities—whether ‘on-chain’ or ‘off-chain’—should be subject to the same transaction reporting requirements as standard securities,” the SEC statement reads.
DART is particularly significant because it was developed in partnership with the U.S. Commodity Futures Trading Commission (CFTC) — in stark contrast to the Roundtable, which did not include CFTC representatives despite the CFTC and DART having shared jurisdiction over digital assets.
This cross-departmental collaboration model shows that regulators are quietly advancing a more unified regulatory framework beneath the surface of public debate. For the crypto industry, which has long been plagued by regulatory fragmentation, this pragmatic collaboration may eventually achieve regulatory synergies that roundtable meetings and public speeches cannot achieve.
However, the DART system has also raised serious privacy issues. By capturing both public blockchain data and private off-chain trading activities, the system gives regulators unprecedented monitoring capabilities over the cryptocurrency market. For traders who value the anonymity of blockchain transactions, this level of monitoring marks a major shift in cryptocurrency regulation toward traditional financial monitoring models.
Industry observers are closely watching how the DART system will balance transparency goals with privacy needs — and whether the system will spur a new wave of innovation in privacy-preserving technologies.
Final Thoughts
Four days after the roundtable, the industry is beginning to wonder whether this will pave the way for a new era of crypto regulation or simply redefine the same old challenges.
The SEC’s Crypto 2.0 initiative, led by Commissioner Pierce, has changed its tone. Staff statements on meme coins and mining, upcoming guidance on potential NFTs, and the agency’s willingness to engage directly with industry all indicate a tangible change in approach.
The timing is particularly critical - the U.S. Congress is advancing legislation similar to last years FIT21 Act, which will establish a new framework for the classification of digital assets. Renato Mariotti, a well-known lawyer, pointed out that Fridays roundtable missed an opportunity to influence this legislative process by fostering innovative ideas with long-term regulatory value.
Although Commissioner Pierces Spring Sprint plan marks a shift in regulatory thinking from enforcement first to a more open stance, Fridays discussion was still stuck in using an outdated framework from decades ago rather than building a regulatory system that adapts to the new era.
The emergence of this compromise is not surprising given institutional constraints.
Currently, the SEC is operated by only three commissioners and is awaiting the appointment hearing of Paul Atkins on Thursday. Therefore, the SEC lacks both the legal authority to promote comprehensive reforms and the corresponding mechanism guarantees. At this stage, it can only implement limited regulatory measures by issuing non-binding staff statements on Meme coins and mining activities.
Although the proposed DART system represents the most substantial progress - through cooperation with the CFTC, it is expected to establish an unprecedented transparency mechanism in the cryptocurrency market - its essence is still to apply the traditional financial regulatory paradigm to emerging financial industries.
The most fatal shortcoming of the current regulatory system is the speed of response. Blockchain innovation iterates at the speed of code deployment, while the SECs decision-making is subject to the slow process of committee consensus. This growing regulatory innovation deficit has become an unspoken core contradiction in the industry.
Crypto companies moving forward in the regulatory fog should be clear about their strategic direction: the real driving force for change comes from congressional legislation, not roundtable discussions. Compared to endless debates about how the Howey Test applies to digital assets, the FIT21 Act can clearly provide a more constructive regulatory framework.
The so-called spring sprint at the moment is actually more like a cautious stroll - although it is better than standing still, it is ultimately difficult to catch up with the industry train that is galloping at full speed.
