The SEC’s current approach to crypto handling neither supports capital formation nor protects investors, according to Commissioner Mark Uyeda in a recent statement.

By taking notice of crypto disclosure rules, Uyeda announced in a July 1 statement for adoption of new rules. As part of the Registered Index-Registered Index-(RILA) Linked Annuities Act, he changed certain provisions. These changes will specify how specific firms can file their Form N-4 application.

However, the footnotes expose a slight criticism of how the Gensler-led agency handles crypto asset regulations, especially in the way information is disclosed in Form S-1 filings.

Uyeda Criticizes SEC’s Outdated Crypto Filing Rules

In footnote 3, Uyeda criticized the SEC by stating that the  S-1 filing form needs to be updated.   The information required in the form to register and sell crypto assets is not relevant or applicable and does not require information that may be material.

He further stated that there is a need for an update when a firm is going to be public or registering securities to reflect the unique nature of the asset and securities.

“This [current] approach for crypto digital assets is problematic because it neither facilitates capital formation nor protects investors.”

In a July 2 post on X, Alexander Grieve, head of government affairs at Paradigm, stated that this was, to his knowledge, the first time Commissioner Uyeda had publicly called for a customized disclosure framework for crypto assets.

“The SEC under a different admin would be a very different place,” Grieve added.

The Blockchain Association, a U.S.-based crypto advisory group, stated in a July 2 X post that Udeya’s “nuanced, innovation-forward approach” to crypto was what the truly industry needed.

Uyeda’s statement comes after four days when the SEC sued Ethereum wallet applicant MetaMask for the illegal “offer and sale of securities.”. It also targeted Ethereum staking services used by MetaMask for ETH staking.