- SEC sets up Crypto 2.0 Task Force to oversee both on-chain and off-chain trades.
- The DART system will track crypto trades for transparency and investor protection.
- Industry leaders met with the SEC to establish crypto reporting and compliance standards.
The U.S. Securities and Exchange Commission (SEC) created the Crypto 2.0 Task Force to enhance crypto regulation. The move aims to create uniform reporting for digital assets and promote market stability.
Overview of Crypto 2.0 Initiative
The SEC established the task force for the purpose of regulating on-chain and off-chain crypto transactions. The task force will implement the Digital Asset Reporting and Tracking System (DART). The platform will monitor blockchain transactions and off-chain transactions for enhanced transparency.
In this context, MarzellCrypto tweeted on X regarding this important regulatory move by the SEC. His tweet referred to the agency’s intent to bring crypto reporting in line with traditional securities. The SEC announcement confirmed that digital asset transactions have to adhere to normal trade reporting requirements.
Expanding Regulatory Oversight and Reporting
Therefore, the SEC seeks to address off-chain transaction problems with tighter regulation. Off-chain transactions on centralized exchanges lack public records and thus carry manipulation threats. The Treasury Department found inconsistencies in pricing and volume across platforms.
In particular, the SEC found challenges in regulating decentralized exchanges (DEXs). DEXs run on smart contracts without intermediaries, and it is challenging to compel compliance. The absence of custodial monitoring adds cybersecurity and contract failure threats.
Industry Meetings and Early Engagement
Previously, before the release of Crypto 2.0, the SEC conducted meetings with top industry players. Paradigm and the Crypto Council for Innovation were some of the firms with whom regulatory matters were discussed. Discussions involved the re-examination of the classification of cryptocurrencies as securities.
Following this, the SEC dropped investigations of firms like Coinbase and OpenSea. This signaled openness to re-examining enforcement priorities. A March press release identified key members of the task force, including experienced crypto advocates.
Looking ahead, the Crypto 2.0 Task Force moves industry conversation forward through roundtables. The series titled “Spring Sprint Toward Crypto Clarity” focuses on digital asset classification. CoinRegTech submitted formal recommendations on regulation and off-chain reporting requirements.
The proposals include creating a centralized Digital Asset Repository of Transactions. Daily activity, including customer ownership and account information, would be made available by platforms. The proposal also includes using blockchain analytics to flag illicit activity and market manipulation.
