I just reviewed the updated guide released by the SEC, and there are quite significant changes for the crypto market. The interesting part is that they now clarified that direct trading between security tokens and Bitcoin is allowed without going through fiat currency, something that previously caused a lot of regulatory confusion.

What catches my attention the most is how they are handling alternative trading systems, which is ATS in securities, let's say. Basically, ATS can facilitate these transactions as long as they comply with federal securities regulations. It's a smart move because it recognizes that the structure of the crypto market is different and needs flexibility.

There is a technical detail that is important: for proprietary stablecoins, brokers can treat them as easily tradable with a 2% discount. That significantly simplifies capital requirements. And now they also allow ATS operators to combine brokerage, custody, and clearing functions into a single platform, which was a bottleneck before.

For cryptocurrency ETPs under Regulation M, the SEC is being more permissive. As long as the ETP shares are listed on a national securities exchange and existing rules are followed, they can operate without much additional paperwork.

Basically, what’s happening is that the SEC is recognizing that trading cryptocurrencies and security tokens cannot be forced into traditional market structures. They need their own rules that make sense for the technology. This guide is a step in that direction, although there’s still a lot to clarify about how this will evolve.