US SEC: There is limited case law on the application of securities laws to crypto assets, and we are coordinating multiple parties to supervise this area

According to a statement released by the Office of Inspector General of the U.S. SEC, the SEC's ability to maintain effective supervision requires it to continuously monitor the market environment and adjust and modernize its expertise, rules, regulations, and supervisory tools and activities where appropriate. In this regard, two emerging areas have brought certain challenges to the SEC: crypto assets and artificial intelligence (AI). Given the rapid rise of these and other innovative fields, the SEC must continue to adapt and build new expertise and capabilities.
The SEC recognizes that the rapid growth of crypto assets is one of several "evolutionary risks." The Congressional Budget Justification for Fiscal Year 2024 states that the crypto asset market lacks basic disclosures about assets and companies that execute investor transactions. SEC Chairman Gary Gensler has repeatedly commented on the widespread lack of compliance with existing securities laws by crypto asset market participants. It has been widely reported that the SEC has taken enforcement actions related to crypto assets, many of which have been strongly challenged by the defendants.
However, as reported by the Financial Stability Oversight Council (FSOC) and the Government Accountability Office (GAO), there are gaps in the regulation of crypto-asset activities in the U.S. Specifically, no federal financial regulator has comprehensive authority to regulate the spot market for non-securities crypto-assets, and there are regulatory gaps in regulating certain stablecoins (crypto-assets).
Therefore, FSOC (including the SEC Chairman) and GAO recommend that Congress consider legislation to provide federal oversight of these issues. Among other things, FSOC recommends strengthening its members' capabilities in data and analysis, monitoring, supervision, and regulation of crypto asset activities. GAO further recommends that the seven federal financial regulatory agencies establish or adjust existing coordination mechanisms.
The SEC’s comments on the GAO draft report noted that efforts are underway to coordinate cooperation among federal financial regulators through the FSOC, the President’s Working Group on Financial Markets, the Council on Financial Literacy and Education, joint participation in international institutions, and other bilateral and multilateral efforts.
For fiscal year 2024, the SEC is seeking to add positions in the Examination, Trading and Markets, and Enforcement divisions, in part to address key and evolving risks associated with crypto assets. The Office of General Counsel and the Office of International Affairs are also seeking additional positions to focus on crypto asset regulation, policy, and related matters.
In addition, case law regarding the application of securities laws to crypto assets is limited and still developing. As recent decisions have demonstrated, even judges in the same district may render inconsistent decisions on similar facts or issues. It may take years for the law in this area to become clear to the point where the outcomes can be reasonably predicted. This uncertainty may affect the SEC’s enforcement decisions and priorities.