Crypto Firms and Wall Street Urge SEC to Revise Regulation Crypto Assets

Crypto companies and Wall Street banks have formally asked the SEC to revise its proposed Regulation Crypto Assets, closing out a comment period that drew input from across the traditional and digital asset industries. The filings land at the SEC as the commission weighs how to fold token markets into its existing supervisory framework.

The push for revision centers on the SEC's attempt to write a dedicated rulebook for crypto assets rather than handling the sector through case-by-case enforcement and staff guidance. Commenters from both camps — crypto-native firms and major financial institutions — argued the draft rule needs changes before it can work in practice, according to letters filed with the commission before the deadline.

What does the industry want changed?

The comment letters share a common thread: the SEC's proposal, as drafted, doesn't cleanly fit how crypto assets are issued, traded and custodied. Firms pushing for revisions say the regulation should account for the operational realities of distributed-ledger markets — custody arrangements, token issuance mechanics and trading infrastructure that differ from securities settlement as Wall Street has historically run it.

The convergence of crypto firms and large banks on the same docket is itself notable. Both groups operate under or adjacent to SEC oversight, and both have a stake in how the commission defines the perimeter of a federal crypto rule. Their alignment on the need for revision — if not on every detail — signals that the industry sees the current draft as unworkable without amendment.

Why does the timing matter?

The close of the comment window marks the formal end of the public input phase for the proposal. What follows is the SEC's internal review: commissioners and staff must read the record, decide whether to adopt the rule, revise it, or re-propose it in substantially different form.

That decision now sits with the commission itself. Under administrative procedure, an agency must respond to significant issues raised in comments before finalizing a rule, which means the substance of these letters — not just their volume — will shape the final text of Regulation Crypto Assets.

What happens next?

No timeline for a final rule has been set by the SEC following the close of comments. The docket, however, is now complete, and the burden shifts to the commission to demonstrate it has addressed the industry's objections — a step that typically precedes either a revised proposal or an adoption vote.

For market participants, the practical question is operational: whatever the SEC finalizes will determine which crypto-asset activities fall under broker-dealer, custodial and trading rules that Wall Street already follows. Firms on both sides of the comment campaign have told the commission the current draft misses that mark.

The SEC has not indicated when it will act on the record. Until it does, the proposed rule remains in limbo, and firms operate under the existing patchwork of guidance and enforcement that the regulation was meant to replace.

By Daniel Okafor