SEC should create ‘customized’ S-1 forms for digital asset securities: commissioner Mark Uyeda

U.S. Securities and Exchange Commission commissioner  Mark T. Uyeda said the agency needs to create a distinguished S-1 registration form for digital asset securities during a fireside chat at Tuesday’s Korea Blockchain Week 2024 event in Seoul, South Korea.

An S-1 form is the registration statement from the SEC that U.S. issuers must file prior to offering a new securities product. It includes various disclosures, such as an income statement and a statement of cash flows.

Uyeda used registered index-linked annuities to illustrate how the SEC's standard registration form may be inadequate for certain financial products. He said the SEC works with product sponsors to develop tailored registration requirements.

“Well, why shouldn’t we do the same thing with crypto, digital asset securities?” Uyeda said. “We have the flexibility to do that, and that was in part, expressing my frustration in that we have not done more of that to accommodate sponsors of these types of digital assets that they have concluded as securities.”

Uyeda said the agency does not have room to create a “catch-22 situation” where the SEC asks digital asset securities sponsors to register and provide disclosures that are not relevant or that they are not able to.

Nonetheless, Uyeda said such filings come after the issuer's analysis and the decision to view their product as a security under federal regulations. While digital asset-based securities such as tokenized bonds or cryptocurrency exchange-traded funds fall under the SEC's supervision, it is still uncertain whether cryptocurrencies are classified as securities.

"The term 'crypto asset security' is nowhere to be found in any statute—it's a fabricated term with no legal basis. The SEC needs to stop trying to deceive judges by using it," Ripple's Chief Legal Officer Stuart Alderoty said on X yesterday.

Ripple has been entangled in legal disputes with the SEC over classifying certain digital assets as securities. Along with many other companies, such as Coinbase, Ripple contended that the SEC has failed to provide sufficient regulatory clarity.

When asked about his dissent to the SEC’s decision to deny Coinbase's rulemaking petition, Uyeda said the SEC should clarify what securities are and are not in digital assets.

“I hope at some point, whether it’s Gensler or any of his successors, will think about, we’ve now had a fair amount of regulatory uncertainty on digital assets, maybe we ought to move forward with some legislation or rulemaking,” Uyeda said.

However, digital assets are not among the over 50 items SEC chairman Gary Gensler added to the regulatory agenda during his term. Uyeda added that Gensler has the final say in adding new items to the regulatory agenda.

Uyeda added the SEC needs to consider jurisdictions worldwide, including the EU, South Korea and Japan, for future rulemaking on digital assets.

Uyeda, one of the SEC’s five commissioners, has a fixed term until June 2028 and has stated that his views are personal and do not reflect the entire agency's.