While we might be celebrating (or bemoaning) the return of pumpkin spice beverages and the increasingly early appearance of Christmas items on supermarket shelves, spring has apparently sprung for the Securities and Exchange Commission (SEC), which has decided to skip ahead six months and release its “Spring 2025 Statement” – setting out a crypto-forward agenda for the year to come.
On the books (and records)
Summarizing the contents of the “spring” agenda, Atkins explained:
“The agenda covers potential rule proposals related to the offer and sale of crypto assets to help clarify the regulatory framework for crypto assets and provide greater certainty to the market.”
Emphasizing the importance of crypto’s place in the SEC’s ongoing agenda, Atkins described that “a key priority of [his] Chairmanship” would be “clear rules of the road for the issuance, custody, and trading of crypto assets.”
The agenda includes, for the first time, proposals for the SEC to lay out “rules relating to the offer and sale of crypto assets, potentially to include certain exemptions and safe harbors,” as well as to provide clarity around the regulatory status of cryptocurrencies. Interestingly, the rule proposal deems this an “economically significant” priority.
Alongside further proposals around modifications to existing “safe harbor” rules and finalization of previous proposals to introduce new joint data standards across regulators, the SEC has also tabled “Amendments to Broker-Dealer Financial Responsibility and Recordkeeping and Reporting Rules.”
This would include modifying rules 17a-3 and 17a-4 to “address the application of these rules to crypto assets.” These rules currently govern requirements for regulated financial services firms to maintain records related to their business operations, and have clear conditions around accessibility, completeness, format, storage, and retention of this data.
- Rule 17a-3: Requires broker-dealers to create and maintain specific records related to business operations, including customer information, order records, transaction details, correspondence, and regulatory reports
- Rules 17a-4: Governs the storage and preservation of books and records, including the need for instant eDiscovery, downloadability, updatable and recordable audit trails, and protecting digitized records from alteration, deterioration, or loss
Ultimately, the purpose of these rules is to ensure investors are protected and that broker-dealer firms are able to turn over complete data sets that not only assist in regulatory investigations but also allow those firms to conduct proactive internal audits to identify potential misconduct as required. By expanding these rules to apply to firms engaging in crypto trading, the SEC is taking clear steps towards “legitimizing” a fast-growing area of the financial landscape by bringing it into line with currently regulated areas.
“A new day” for the SEC
In his statement accompanying the agenda, Paul Atkins declared that these movements reflect “that it is a new day at the Securities and Exchange Commission”:
“The items on the agenda represent the Commission’s renewed focus on supporting innovation, capital formation, market efficiency, and investor protection.”
Atkins’ outlook certainly marks something of an SEC sea change compared to the regulator’s position on cryptocurrency under the previous administration, including ex-Chair Gary Gensler, whose tenure included several high-profile lawsuits against crypto exchanges that have since been dropped. Since setting up a dedicated crypto task force earlier in 2025, the regulator is picking up momentum toward establishing clearer regulatory guidelines around cryptocurrencies.
This comes alongside a wider SEC shift away from what some have deemed its previous “regulation by enforcement” approach, and toward attempts to, in Atkins’ words, “reduce compliance burdens,” with a focus on deregulation in order to help boost innovation and economic growth. Atkins underscored how proposed deregulatory actions and the removal of some previously suggested regulatory measures by the SEC, including opening up some measures to public consultation, are all part of this “new day” and purposeful return to the regulator’s core mission:
“Importantly, the agenda reflects our withdrawal of a host of items from the last Administration that do not align with the goal that regulation should be smart, effective, and appropriately tailored within the confines of our statutory authority.”
Crypto recordkeeping – the new WhatsApp?
Since the SEC first charged 16 Wall Street firms with recordkeeping failures relating to off-channel communications, particularly the unapproved use of WhatsApp to discuss business in 2022, we have seen a regular cadence of multi-million dollar enforcement actions levied against firms for failing to meet recordkeeping obligations.
This has been focused on so-called “off-channel communications,” where individuals have used unmonitored communications channels that are not being actively captured and archived by compliance teams. This has meant firms are not able to keep complete records of all business conversations, causing them to fall short of their obligations under regulations, including 17a-3 and 17a-4.
The result has been that many firms (around 39%) now capture, archive, and monitor all business communications channels to ensure adequate records are kept. The finance industry has learned from the (costly) mistakes of the firms subject to SEC actions.
Firms trading in cryptocurrencies have, so far, not been subject to these recordkeeping regulations – meaning they may not have the solutions in place needed to capture and archive the data that regulators will expect to be recorded once rules are expanded. While there will be an implementation period that will allow firms to prepare for any (eventual) expansion of these rules, there is a possibility that slower adopters might be caught napping – meaning that we may see crypto recordkeeping replace WhatsApp as the next enforcement battleground.
Previously, the question was whether regulators “are ready for crypto.” The SEC’s suggested expansion of recordkeeping rules to encompass crypto firms has flipped the script, begging the question – “is crypto ready for regulation?”
Whatever financial products and services you work with, ensuring that you’re meeting regulatory recordkeeping requirements is a business essential. Leveraging the right communications data capture and archiving solutions is vital to getting ahead of recordkeeping rules – and staying there.
