Caution From the SEC’s Democratic Commissioner
Commissioner Caroline Crenshaw, the agency’s lone Democrat, offered a more cautious take. She warned that vertical integration poses serious risks to investors — as shown by several crypto collapses over the past two years.
“Because many of these entities are not registered with any regulator,” Crenshaw said, “they do not comply with laws designed to minimize these risks and potential conflicts.”
She emphasized that crypto customers often have unclear rights regarding custody and redress, and noted that strong disclosures and guardrails for broker-dealers could help protect retail investors.
Regulatory Innovation vs. Decentralized Structures
Panelists agreed that a broader regulatory mindset shift is needed.
“If we’re thinking about a decentralized system fundamentally in cryptographic assets, it’s hard to impose our centralized mindset on that,” said Lauer.
The SEC is expected to hold additional roundtables as it considers how to reshape its rulebook in light of a rapidly evolving digital asset market. Whether temporary exemptions, clearer definitions, or a unified agency structure emerge remains to be seen — but Friday’s discussion signaled that crypto regulation reform is accelerating.
