"White House begins review of SEC crypto rules…including overhaul of hedge-fund disclosures"

Minseung Kang

Summary

The U.S. Securities and Exchange Commission (SEC) is said to have submitted crypto-related rules and proposed revisions to hedge-fund and private-fund disclosure requirements to the White House Office of Management and Budget for review.
The crypto rules are expected to include an 'innovation exemption' that waives registration obligations for a set period, allowing crypto companies to operate without registration, it said.
The market is watching the possibility that the review could affect the broader crypto regulatory environment and the overall private-fund disclosure framework, it said.

Forecast Trend Report by Period

The U.S. government is said to be reviewing cryptocurrency regulation and an overhaul of the private-fund disclosure regime at the same time.

According to Bloomberg on the 23rd, the U.S. Securities and Exchange Commission (SEC) submitted proposed rules related to crypto assets and revisions to hedge-fund and private-equity disclosure requirements to the White House Office of Management and Budget (OMB), which is now conducting its review.

The proposed crypto rules are expected to include an "innovation exemption" that would waive registration obligations for a certain period. The provision would allow crypto companies to operate for a limited time without registering as a broker or an exchange.

Revisions concerning hedge funds and private funds are also under review. The proposal is reported to focus on easing the burden of Form PF filings submitted by managers.

Previously, following the Archegos Capital episode, the SEC strengthened disclosure items related to margin requirements and counterparty exposure, among others. Recently, however, analysts say there are growing calls for adjustments reflecting criticism that the reporting burden is excessive.

Meanwhile, the market is focusing on the possibility that the review could affect the broader crypto regulatory environment and the overall private-fund disclosure framework.