On 21 March 2025, the United States Securities and Exchange Commission (US SEC) convened the inaugural roundtable of its newly formed Crypto Task Force, with Acting Chairman Mark T. Uyeda delivering opening remarks focused on the legal questions surrounding the classification of crypto assets under federal securities laws. The roundtable, held at the US SEC’s headquarters in Washington D.C., is a step in the agency’s effort to address persistent legal uncertainty in the digital asset sector.
In his remarks, Acting Chairman Mark T. Uyeda traced the roots of the crypto asset class to the 2008 release of the Bitcoin white paper by Satoshi Nakamoto, which laid the foundation for a new form of peer-to-peer, digitally native value exchange. Seventeen years later, he noted, the financial industry continues to wrestle with how these assets fit into the existing securities regulatory framework—particularly when applying the Howey test, the legal standard for determining whether a transaction qualifies as an investment contract and thus a security, as established by the United States Supreme Court in SEC v. W.J. Howey Co., 328 U.S. 293 (1946).
Acting Chairman Mark T. Uyeda while discussing the interpretive difficulties of applying the Howey test are not exclusive to crypto assets. Drawing on personal experience as Chief Advisor to the California Corporations Commissioner, he recounted a case where he argued that the offering of a non-security certificate of deposit combined with a bonus payment constituted an investment contract. Though the state court disagreed, federal courts in similar cases have reached the opposite conclusion.
The speech elaborates and discusses on divergent appellate court interpretations of the Howey test’s elements which includes debates over whether investor profits must be pooled and distributed pro rata, whether profits must be derived solely from the promoter’s efforts, and whether post-sale activities or pre-purchase managerial actions are necessary to meet the “efforts of others” prong. Uyeda cited decisions from the Second, Fifth, Eleventh, and D.C. Circuits to illustrate how these doctrinal splits create uncertainty for market participants and regulators alike.
Against this backdrop, Acting Chairman Mark T. Uyeda advocated for greater regulatory clarity through guidance and rulemaking rather than enforcement alone. He noted that in the past, the US SEC has clarified difficult questions by issuing interpretive releases and rules, such as the application of fiduciary duty under the United States Investment Advisers Act and the treatment of whisky warehouse receipts and condominiums under the United States Securities Act. He suggested that a similar approach should have been considered for the classification of crypto assets under the federal securities laws.
Acting Chairman Mark T. Uyeda closing the speech stated: “Today’s roundtable is an important first step in addressing that concern, thank you to the Crypto Task Force and panelists for your time in preparing for this roundtable. I look forward to the discussions to follow.”
(Source: https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-crypto-roundtable-032125)
