Article Author: Prathik Desai, Nameet Potnis, Thejaswini M A Article Compilation: Block unicorn

Last Friday, the U.S. Securities and Exchange Commission (SEC) took the first step to ease relations with the cryptocurrency industry, but failed to provide all the answers the industry is looking forward to.

After years of "using law enforcement instead of supervision", this securities regulator convened a crypto roundtable meeting with heavyweights in the industry for the first time, claiming to be "a spring sprint towards a clearer cryptocurrency."

While the title is promising, attendees spent a lot of time in the two-hour meeting arguing about following the Howey Test standards from decades ago rather than planning clear regulatory paths.

The meeting did gain something—but was it enough? This article will explore the significance of this regulatory shift to the crypto industry:

How the SEC acknowledges past failures, but still finds difficult to define the future direction

What the proposed DART tracking system means for transparency

Why NFTs may become the next area to receive regulatory guidance

What urgently needed content is missing in the dialogue

New leadership, new regulatory ideas

SEC's governing style around Trump's second term in office is contrasted. Former Chairman Gary Gensler once claimed that most cryptocurrencies belong to securities and used law enforcement as the main means; while acting chairman Mark Uyeda and commissioner Hester Peirce admitted at the opening of the meeting that they needed to collaborate on restarting the regulatory framework.

"I think we're ready for a future sprint," Pierce told attendees, referring to the task force's ambitious "cryptocurrency-clear spring sprint."

"Can we transform the characteristics of securities into a concise classification system to cover many different types of crypto assets that currently exist and may exist in the future? "This is one of the questions Pierce raised when addressing the dilemma of treating cryptocurrencies as securities.

This open dialogue invitation marks a shift in the attitude of the SEC.

The roundtable invited more than a dozen securities lawyers and cryptocurrency experts, including Miles Jennings, A16z's crypto director and general counsel, and critics such as former SEC lawyer John Reed Stark.

The most eye-catching thing is the SEC Frankly admitting that the agency’s previous practices failed.

A16z’s Crypto Director and General Counsel Miles Jennings spoke out loud. "Inaugurated The way the industry regulates the industry failed to achieve any of the SEC’s goals—not protecting investors, nor promoting capital formation or market efficiency. Therefore, the current practice is obviously a failure and we must improve it. "More surprising: The SEC seems to agree with this view.

Old question, limited progress

Although the participants were all new faces and the atmosphere was very harmonious, the roundtable quickly fell into a familiar debate: how to determine securities attributes using the Howie test formulated in 1946?

The participants discussed almost throughout the discussion how this nearly 80-year-old Orange Framework is applicable to tokens, decentralized exchanges and other crypto innovations.

This focus on improving old tools rather than building new ones disappoints many people for an industry looking to completely get rid of the past.

The industry hopes to have a whole new beginning—defining what is and what is not—not applying stale jurisprudence endlessly.

This tension is taking place in real time, with some participants trying to lead the conversation to a more forward-looking approach. Rodrigo Seira, special advisor at Cooley LLP, questioned the basic premise of investment intentions to automatically generate securities. "I think we have to understand that just because there is an investment intention behind the purchase does not mean that the transaction will automatically become securities," Seira takes the purchase of artworks that have both aesthetic value and investment value. Although the conversation remains on the definition of securities, subtle hints of more practical progress appearing at the edge of the activity.

Commissioner Pierce told reporters off the court that following the recent statement on Meme coins and proof of work mining, non-fungible tokens (NFTs) could be the next category to receive guidance from the SEC. "I think we will see that the NFT field will also introduce relevant regulatory guidelines," Pierce said. "

This inadvertent remark has had a significant impact on projects such as Stoner Cats and Flyfish Club, which previously faced SEC lawsuits for funding their businesses using NFT sales. A formal clarification could open the door for creators to use NFT as a legal fundraising tool without securities registration.

DART System: Transparency Revolution is quietly coming

In addition to a few concrete outcomes of the roundtable, there are some things that really stand out—a report that parallel developments could fundamentally reshape crypto trading.

The SEC's recently announced digital asset reporting and tracking system (DART) will change the way regulators monitor crypto markets. Unlike the philosophical debate about the Howie Test, DART represents a practical approach to address one of the core issues of the SEC: transparency.

The proposed system tracks not only transactions on public blockchains, but private off-chain transactions, resulting in a comprehensive understanding of cross-platform digital asset ownership. This solves a long-standing regulatory blind spot—while transactions on the DeFi protocol are publicly visible on-chain, centralized exchanges often process transactions internally without recording them on the blockchain.

<“Digital asset securities trading – whether ‘on-chain’ or ‘off-chain’ – should comply with the same trading reporting requirements as standard securities.”

DART is particularly important because it was developed in collaboration with the U.S. Commodity Futures Trading Commission (CFTC) – in stark contrast to the Roundtable, which did not include CFTC representatives despite the shared digital asset jurisdiction between CFTC and DART.

This cross-sectoral collaboration model shows that under the appearance of open debate, regulators are quietly advancing a more unified regulatory framework. For crypto industries that have been long-stricken by regulatory dispersion, this pragmatic collaboration may ultimately achieve regulatory synergy that cannot be achieved by roundtables and public speeches.

However, the DART system also raises serious privacy issues. By simultaneously crawling public blockchain data and private off-chain transaction activities, the system enables regulators to gain unprecedented monitoring capabilities of the cryptocurrency market. For traders who value the anonymity of blockchain transactions, this monitoring force marks a major shift in cryptocurrency regulation to traditional financial monitoring models.

Industry observers are paying close attention to how the DART system will balance transparency goals with privacy protection needs—and whether the system will create a new wave of innovation in privacy protection technology.

First View

Four days after the roundtable ended, the industry began to wonder whether this would pave the way for a new era of crypto-regulation or just redefine the same old challenges.

The SEC Encryption 2.0 program, led by Commissioner Pierce, has changed the tone. Staff’s statements on Meme coins and mining, upcoming potential NFT guidance and the agency’s willingness to engage directly with the industry all indicate a tangible change in approach.

The current timing is particularly critical - the U.S. Congress is advancing a legislative process similar to last year's FIT21 Act, which will establish a new framework for the classification of digital assets. Renato Mariotti, a well-known lawyer, pointed out: "Friday's roundtable missed the opportunity" and failed to influence the legislative process by cultivating innovative ideas with long-term regulatory value.

The emergence of this compromise is not surprising given institutional limitations.

The SEC is currently maintained by only three committee members and needs to wait for the appointment hearing of Paul Atkins this Thursday, so the SEC now lacks both the statutory mandate to promote comprehensive reform and the corresponding mechanism guarantee. Limited regulatory measures can only be implemented by issuing non-binding staff statements on Meme coins and mining activities.

The proposed DART system represents the most substantial progress—through cooperation with the CFTC, it is expected to establish an unprecedented transparency mechanism in the cryptocurrency market—but its essence is to apply the traditional financial regulatory paradigm to emerging financial industries.

The fatal shortcomings of the current regulatory system lies in its response speed. Blockchain innovations iterate at the speed of code deployment, while SEC decisions are subject to slow progress in committee consensus. This growing "regulatory innovation deficit" has become a core contradiction that the industry has tacitly understood.

Crypto companies moving forward in the fog of regulation should recognize the strategic direction: the real momentum of change comes from Congress legislation, not roundtable discussions. Compared to endless debate on how the "Ouvian Test" applies to digital assets, the FIT21 Act clearly provides a more constructive regulatory framework.

The so-called "spring sprint" is actually more like a cautious stroll - although it is better than standing still, it is ultimately difficult to catch up with the industry train that is speeding at full speed.