Coin Center urges SEC to prioritize rulemaking over no-action letters

Crypto lobby group Coin Center has urged the US Securities and Exchange Commission to stop addressing individual crypto cases reactively and instead start setting clear rules.

“Individualized relief can provide short-term clarity, but it risks fragmentation, implicit merit regulation, and uneven treatment across projects,” Coin Center said in a letter to the SEC, urging the regulator to "prioritize rulemaking wherever possible."

“The true value of crypto networks lies in their character as utility-like public goods rather than as services operated by private corporations or associations,” the letter read. 

The letter, which was made public on Tuesday, was dated March 5. 

Source: Neeraj K. Agrawal

Since then, the SEC has released a notice that interprets how “non-security crypto assets” fall under federal securities laws and provides a “coherent token taxonomy for digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.”

The SEC and CFTC also signed a memorandum of understanding on Mar. 12 to better coordinate oversight of the financial markets, ending decades of “regulatory turf wars” between them.

Selective relief creates an unfair environment: Coin Center

Crypto-focused no-action letters have continued to trickle in, with the latest being a no-action letter addressed to crypto wallet provider Phantom Technologies by the Commodity Futures and Trading Commission’s Market Participants Division. 

The CFTC notice, which was shared on Tuesday, said that the no-action letter would, under certain circumstances, stop the division from recommending that the regulator take an enforcement action against Phantom or its staff for failure to register as a broker.

The past few months have also seen the SEC hand out two no-action letters to decentralized physical infrastructure network (DePIN) crypto projects.

In late September, the SEC also issued a no-action letter that cleared the way for investment advisers to use state trust companies as crypto custodians.

However, Coin Center argued that relying on these case-by-case rulings creates uncertainty for the wider crypto market.

“If relief is granted selectively, the regulator inevitably puts its thumb on the scale in favor of networks or intermediaries that have the resources and incentives to pursue it,” it said.

Related: SEC will consider most crypto assets not securities under federal law

Meanwhile, US lawmakers are approaching the problem their own way. 

The CLARITY Act, which aims to provide clearer regulatory oversight for the crypto industry, is moving through Congress.

The bill, if passed, would give the SEC and CFTC clearer guidance on which digital assets fall under their jurisdiction, helping reduce ambiguity and ensure more consistent treatment across the crypto industry.

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