Regulatory Chaos: SEC Commissioner Questions Conflicting Crypto Rules
Regulatory chaos erupts as SEC sends conflicting signals on crypto, fueling uncertainty over the future of digital asset oversight.
SEC Commissioner Criticizes Agency’s Mixed Signals on Crypto Assets, Warns of Regulatory Chaos
U.S. Securities and Exchange Commission (SEC) Commissioner Caroline A. Crenshaw issued a pointed statement on May 31 criticizing what she sees as deep inconsistencies in the agency’s handling of crypto assets. Speaking amid a push by the SEC Cryptocurrency Task Force to provide regulatory clarity, Crenshaw argued that the Commission’s actions have instead created more confusion, particularly regarding whether digital tokens like ethereum (ETH) and solana (SOL) are securities. Crenshaw cited a series of SEC staff statements in early 2025—covering meme coins, proof-of-work mining, and stablecoins—that declared a range of digital assets not securities. These statements were issued by the SEC’s Division of Corporate Finance between February and April, and Crenshaw responded to each with public dissents that highlighted the risks of reducing regulatory oversight. Despite those earlier assertions, she noted, the Commission does not oppose new ETFs filed under the Investment Company Act of 1940 that rely on ETH and SOL as securities. The commissioner stated:
In the name of clarity, we have seen staff statement after staff statement declaring that all cryptoassets are not securities. However, we now see no objection to the effectiveness of new exchange-traded funds that assert that certain cryptoassets ETH and SOL are indeed securities.
“Does this Commission believe that ETH and SOL are, in fact, securities?” she added. Crenshaw questioned how the SEC could allow both ETPs and ETFs to be registered under different assumptions about the same underlying asset. She argued:
How is it that these cryptoassets are deemed not to be securities when it comes to registration requirements, but conveniently are securities when the registrant sees an opportunity to sell a new product?
She added that rather than promoting consistent regulation, the agency appears to be encouraging a “maximum aggressive approach to entering our markets,” often at odds with its own legal standards. Concluding her remarks, Crenshaw warned: “To date, the journey of the Commission and the Cryptocurrency Task Force has only taken us further adrift in increasingly muddy waters of our own making.” Digital asset advocates, such as Commissioner Hester M. Peirce, have defended the broader crypto ecosystem, asserting that “most cryptoassets currently on the market” are not securities.