The US Securities and Exchange Commission has long been an influential financial regulator worldwide, which helps to ensure that our capital markets are the deepest, fair, and most accessible in the world. But its constant relevance depends on whether it can do more in responding to the change – it should be actively protecting it.
For nearly a century, the SEC has adapted to emerging markets, new technologies and more retail participation. At its best moment, the agency embraced the transparency service change, investor protection, and capital development. But in recent years, it has been lost from that heritage – nothing more visible than its crypto and blockchain approach.
Tuongvy Le is a speaker at Consensus 2025 in Toronto May 14-16.
The good news is that, with a change in leadership and a more open posture emerging, the SEC has the opportunity to take the course well. But the bigger question is: How can we watch that change? How can we build a DNA change in the SEC so that the next promising financial technology is not stunned in its crib?
I spent almost six years in the SEC, first as a senior advice in splitting the implementation and then as a chief advice to the legislative office and intergovernmental affairs. Ever since I held senior legal and policy of crypto firms throughout the ecosystem. From both views, one thing is clear: the SEC can fulfill its mission more effectively – and maintain its global leadership – if it becomes an active partner in modern financial.
The SEC at the best
The SEC has a proud history of embracing the change in the benefits of investors and markets alike. In the 1990s, corporate films through Edgar, replacing paper documents with finding databases. The ATS regulation was later approved, which enabled the increase in alternative trading systems that increased competition and liquidity. ETFs, a former novel, are now major products that offer low cost, variety exposure to a wide range of properties. Most recently, fractional-share trading has empowered millions of retail investors owned by a cut of companies that sometimes they can only admire from afar.
A particularly relevant example as the SEC thinks about how to regulate crypto is the treatment of the asset-supported security agency. In the 1980s and 1990s, the SEC recognized that these complex financial products did not fit well with existing disclosure regimes. After years of study and letters without action, it developed a fixed disclosure framework in 2004-Pinino in 2014-the balanced change in investor protection. And there is no need to bring ways -the execution actions to do so.
When the SEC collapsed
There are also times when the SEC has failed to adapt, with the destruction of both investors and markets. This has slowed down to increase high-frequency trading, which contributed to the 2010 flash crash. It took many years to implement the Crowdfunding policies authorized by the Jobs Act. This is caught in digital reporting standards, delaying more access to market data.
And, in most recent years, its stance in crypto has been cautious from caution to direct hostility. Instead of issuing clear policies for digital possessions, the agency pursued a Scattershot implementation campaign -often against companies seeking to adhere to good faith. Many of these actions are not involved in fraud or loss of investor. Meanwhile, American crypto companies fled overseas, and a global industry has evolved without us.
Even the SEC approved the Bitcoin ETF spots in 2024 only came after it was forced by a federal court. And while the agency at one point talks about creating a crypto disclosure framework similar to what it did for ABS, it didn’t follow.
Innovation is not the enemy
Crypto may be new, but the SEC faces this challenge before. It knows how to change its policies to meet new facts. What is different now is the opportunity to use the change – it just doesn’t fix it.
Get blockchain technology. It can enable close instant trading settlement, risk reduction and capital liberation. This can improve market transparency through unchanged notes and real-time transaction data. This can reduce operational costs by reducing intermediaries. And tokenization can expand access to private markets and it is difficult to reach property classes, benefiting both providers and investors.
In particular, the SEC does not seriously explore how the blockchain can improve its own market supervision. That’s a missed opportunity. But it’s never too late.
A blueprint for the future
So what would the development of a change in the main mission of the SEC look like?
- Change the command of the SEC: Congress should change the Securities Exchange Act of 1934 to clearly include the promotion of change and modernization, in conjunction with investor protection, market integrity, and capital development.
- Rethink Metrics of Success: The SEC should not measure success only by the number of execution actions or penalties collected. It should also look at the development of capital, investor confidence, and safely adopting new technologies.
- Create an office of change: A dedicated, powerful team must engage in entrepreneurs, technology, and academics to guide responsible change – as did similar offices in the UK and Singapore.
- Make regulation based on risk: Not all new products or platforms require full regulatory treatment in the day one. Pilot programs, safe Harbours, and sandbox regulations will help test ideas while maintaining the appropriate guards.
- Invest in education and training: SEC staff require better flexibility with emerging technologies. Cross-discipline expertise should be rewarded and cultivated.
These are not radical ideas – proven tools drawn from SEC’s own playbook.
In a global race to determine the future of finance, the SEC has the choice: lead or fall. Its greatest strength is always the credibility and flexibility.
The next generation of investors and entrepreneurs will not wait around for the rules of the 20th century to achieve change in the 21st century. Nor should it be. If the SEC wants to remain a standard gold, it should adapt again – not just at present, but next.
