On April 11, 2025, policymakers, regulators, and industry leaders gathered in Washington D.C. for a critical conversation on crypto regulation. The event, hosted by the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force, marked the task force’s second roundtable. Appropriately titled “Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading,” the meeting brought together key figures to examine the evolving crypto ecosystem and identify pathways for practical oversight.
Commissioner Hester Peirce, long known for her supportive stance toward crypto innovation, continues to lead the task force. The roundtable attracted broad participation, reflecting growing urgency to address the structural inconsistencies and regulatory blind spots that plague the crypto industry.
Acting SEC Chairman Uyeda Calls for Cohesive Federal Approach
Acting SEC Chairman Mark T. Uyeda opened the roundtable with an address that set the tone for the day’s discussions. He acknowledged the rapid evolution of crypto trading platforms and compared them to the early U.S. securities markets, which emerged in decentralized and fragmented ways. Uyeda used these historical parallels to argue that the U.S. must rethink how it supervises crypto trading activities.
Uyeda criticized the current state-by-state licensing framework, calling it inefficient and ill-suited for a technology that operates globally and instantaneously. He proposed a cohesive federal regulatory strategy that would offer consistent protections for investors while encouraging innovation.
He explained that federal securities laws, designed for traditional markets, impose structural challenges on crypto adoption. For instance, platforms that facilitate trading in tokenized securities often struggle with rules that restrict the listing of unregistered securities and mandate compliance with legacy market structures. These constraints, Uyeda argued, hinder progress rather than promote accountability.
“I encourage market participants that are developing new ways to trade securities using blockchain technology to provide input on where exemptive relief may be appropriate,” he said, urging innovators to collaborate with regulators in shaping flexible, technology-aware frameworks.
Blockchain’s Role in Modern Market Infrastructure
Uyeda also emphasized blockchain’s potential to transform core securities infrastructure, particularly in areas such as clearing, execution, and liquidity. He outlined a vision in which blockchain technology enables:
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Streamlined operations by reducing the need for intermediaries
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Enhanced liquidity through more transparent and instantaneous transactions
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Continuous trading via automated, 24/7 smart contract-based execution
The acting chairman argued that these advantages deserve regulatory recognition, especially as traditional markets struggle with inefficiencies that blockchain can solve. He encouraged the SEC to foster an environment that allows safe experimentation rather than stifling it with inflexible interpretations of decades-old statutes.
Commissioner Crenshaw Raises Concerns About Retail Risks
Commissioner Caroline A. Crenshaw followed Uyeda’s remarks with a pointed warning about risks to retail investors in the crypto space. She zeroed in on the multifunctional nature of crypto trading platforms, which often blur the lines between brokerage, clearing, custody, and execution services.
“In traditional finance, we separate these functions to minimize conflicts of interest and increase transparency,” Crenshaw explained. “Crypto platforms frequently combine all these roles, which increases the risk to the average investor who may not understand how the platform operates.”
She referred to recent failures and collapses in the crypto market, citing them as cautionary tales that exposed regulatory gaps and underscored the need for clearer rules. In her view, the crypto industry must address several core issues:
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Custody Risks: Platforms often lack the infrastructure to securely store digital assets, exposing users to theft or loss.
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Execution Standards: With little oversight, users cannot verify whether platforms execute trades fairly or at optimal prices.
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Registration Gaps: Many platforms continue to operate without registering as brokers or exchanges, denying investors the protection of regulatory oversight.
Crenshaw asked attendees to grapple with these critical questions as they consider the future of crypto regulation. She challenged developers, compliance officers, and platform operators to examine whether their operations align with the core principles of investor protection.
A Roundtable with Diverse Voices
The roundtable featured more than just regulators. Lawyers, exchange operators, blockchain developers, DeFi protocol builders, academic researchers, and consumer advocates all contributed to the discussion. They provided a well-rounded view of how crypto trading functions today—and where the industry needs guidance.
Some participants supported Uyeda’s suggestion for limited regulatory flexibility and praised the SEC for acknowledging that traditional laws fall short in addressing crypto’s unique attributes. Others sided with Crenshaw, warning that relaxing oversight could open the door to more fraud, manipulation, and user losses.
One exchange executive shared examples of how their platform voluntarily implemented transparency tools such as real-time audit trails, segregated wallets, and AI-driven transaction monitoring. They argued that compliance does not have to conflict with innovation, provided that regulators offer clarity.
A DeFi protocol developer raised the issue of decentralized governance and questioned how current rules could apply to protocols without centralized teams. “Who registers, and with whom, when code governs the system?” he asked.
This tension between decentralization and accountability formed one of the core themes of the roundtable. While most attendees agreed on the need for regulation, they diverged on how to define responsibility in an ecosystem that resists central control.
The Path Ahead: Flexible, Principle-Based Regulation
By the end of the event, one consensus emerged clearly: crypto trading will not disappear. Regulation must evolve with it—not by attempting to force crypto into outdated models, but by recognizing where new approaches make sense.
Commissioner Peirce, who moderated the final session, summarized the challenge. “We need to build guardrails, not walls. Our rules should protect investors without choking the innovation that drives this space.”
The SEC plans to use insights from this roundtable to guide future rulemaking, no-action letters, and exemptive relief programs. The task force will continue soliciting public feedback and working with Congress to shape a federal framework tailored to digital assets.
The roundtable highlighted a fundamental truth: no one-size-fits-all rulebook can govern crypto effectively. Instead, the future demands principle-based regulation, crafted with collaboration, agility, and deep understanding of both technological possibilities and investor vulnerabilities.
Conclusion
The SEC’s second crypto roundtable, “Between a Block and a Hard Place,” marked a significant moment in the ongoing regulatory evolution of digital assets in the United States. Acting Chairman Mark T. Uyeda called for regulatory reform that accommodates innovation, while Commissioner Caroline Crenshaw emphasized the need to protect retail investors from inherent risks. The mix of perspectives reflected the complex nature of regulating a market that continues to transform faster than laws can adapt.
As the SEC navigates this terrain, collaboration between regulators, innovators, and investors will define whether the U.S. becomes a leader or a laggard in the global crypto economy.
