SEC, CFPB, CFTC Expected to Scale Back Crypto Oversight

The U.S. Securities and Exchange Commission (SEC) is conducting a review of its past statements on cryptocurrency regulations, under the direction of Acting Chairman Mark T. Uyeda, to potentially modify or rescind guidance that may no longer align with current priorities. This review includes a 2019 framework on the Howey test for determining if digital assets are securities and a 2021 memo regarding risks associated with Bitcoin futures. Meanwhile, the Consumer Financial Protection Bureau (CFPB) is expected to reduce its involvement in cryptocurrency oversight due to budget cuts under the Trump administration, with state agencies likely to take on more regulatory responsibilities. Despite this shift, the CFPB will retain some regulatory authority over cryptocurrency, as changes would require Congressional approval. Additionally, the Commodity Futures Trading Commission (CFTC) has withdrawn two key guidelines related to crypto derivatives, reflecting an increased maturity in the market and a potential shift towards treating crypto products like traditional financial instruments. These developments indicate a significant restructuring of cryptocurrency regulation in the U.S., with various agencies reassessing their roles amidst evolving market conditions.