The SEC draws a line on panic response despite the Bitcoin price plunge.
The U.S. Securities and Exchange Commission (SEC) has made it clear that it will prioritize establishing a regulatory framework over "price defense," even as the Bitcoin (BTC) price recently fell to the $66,000 (approximately KRW 956.41 million) level. SEC Chairman Paul Akins dismissed calls for emergency intervention due to the short-term plunge, stating that addressing cryptocurrency market volatility is not a core responsibility of the regulator.
At the Ethereum developer event "ETHDenver" in Denver on February 18th, Commissioner Akins shared the stage with SEC Commissioner Hester Peirce to answer questions about recent market corrections and regulatory direction. "It's not the regulator's job to worry about day-to-day price fluctuations," he said. "Those who believe the numbers should always go up are doomed to disappointment."
The cryptocurrency market has been experiencing widespread selling pressure recently. Bitcoin is hovering around $66,000 (approximately KRW 956.41 million), and the market is closely watching for a possible retest of the $60,000 (approximately KRW 869.46 million) support level. Ripple's XRP fell about 5% to $1.40 (approximately KRW 20.29 million), and Ethereum (ETH) fell back below the $2,000 (approximately KRW 28.98 million) level. Even before Atkins' remarks, Bloomberg Intelligence strategist Mike McGlone repeatedly expressed his pessimistic view that Bitcoin could fall to $10,000 (approximately KRW 144.91 million).
Nevertheless, Chairman Akins briefly discussed price movements and devoted most of his time to outlining "Project Crypto," an initiative the SEC is pursuing in collaboration with the Commodity Futures Trading Commission (CFTC). This project includes establishing asset classification standards to distinguish the legal status of cryptocurrencies, designing trading rules for tokenized securities using automated market makers (AMMs), and establishing custody guidelines for non-securities such as stablecoins.
Shifting focus from execution to framework building
Chairman Akins' message is seen as a signal that the SEC will step back from its long-criticized "enforcement-heavy" approach and shift to designing regulations and setting clear standards. He emphasized that the SEC has already withdrawn numerous cryptocurrency-related lawsuits and is focused on ending criticism of what he called "regulation by enforcement." He also added that internal employee guidelines have established a certain level of standards for controversial areas such as mining, staking, and meme coins.
At the same event, Commissioner Pierce described the current bear market as "the builders' time." He said, "The current motto should be 'Numbers go down,'" and criticized some critics for indulging in "schadenfreude" (enjoying others' misfortune) regarding the cryptocurrency industry's difficulties. However, he drew the line, saying regulatory clarity alone cannot create value for the industry.
Commissioner Pierce emphasized, "Ultimately, we need to create something people actually need and want to use. Only then can we gain support from both the ruling and opposition parties in Washington, D.C." Resolving regulatory uncertainty is only a prerequisite; without real services and protocols that meet market demand, prices and reputations could falter again.
Promoting "innovation exceptions" and allowing DeFi token securities experiments.
Chairman Akins has repeatedly emphasized that SEC rules should not stifle innovation. He has encouraged developers and project teams to "come in and talk to us," and has publicly proposed granting "innovation exemptions" if certain requirements are met.
This exemption will allow tokenized securities to be traded on decentralized exchanges (DEXs) or other automated platforms, with limited timeframes and strict limits on trading volume. The intent is to allow market participants to experiment and accumulate data in a real-world environment until regulators finalize a "permanent rule."
Chairman Akins urged the audience to "put your nose to the grindstone and work to build things that matter." He emphasized, "In doing so, we can transform Schadenfreude into Freudianfreude (the joy of seeing others succeed)." His message was that even amidst the cold gaze, if tangible innovation and achievements accumulate, both American politics and public sentiment can gradually improve.
The recent ETH Denver statement is interpreted as a reaffirmation of the SEC's commitment to focusing on structural issues, such as tokenized securities, stablecoins, and DeFi regulatory frameworks, rather than being swayed by short-term events like the Bitcoin price plunge. Whether a clear regulatory design will actually provide a level of "regulatory predictability" and whether the market will be able to leverage this as a growth driver will depend on the pace of progress in future dialogue between the SEC and the industry.
"The regulatory framework is in place. Now, all that remains is your 'skill.'"
The SEC's message that it will focus on "structural challenges" like tokenized securities, stablecoins, and DeFi discipline rather than short-term price fluctuations suggests that in the future, a market where "differences in skill," rather than regulation, will determine profits will emerge.
As the institutional framework for "Project Crypto" between the SEC and CFTC, innovation exemptions, and permits for tokenized securities, AMMs, and DEX experiments become more established, investors will no longer have any excuses. Ultimately, deciding what to include and how to operate it comes down to individual study and strategy.
At this point, TokenPost Academy's seven-step masterclass curriculum provides a systematic roadmap for both investors and builders preparing for the "post-regulatory clarity era."
Phase 1: The Foundation – From the nature of assets like Bitcoin, Ethereum, and stablecoins to wallet security, onboarding, and taxes. As regulations become more sophisticated, "basics" and "compliance" become essential.
Phase 2: The Analyst (Valuation and Analysis) – Now that the SEC has moved beyond enforcement and announced its "asset classification standard," the ability to determine true security characteristics and sustainability through tokenomics and on-chain data is crucial. This section covers analyzing dumping risk, inflation, and real user and revenue data.
Phase 3: The Strategist (Portfolio and Risk Management) – Learn a portfolio construction and risk management framework that will help you survive market corrections and maintain compound growth, echoing the SEC's message that "numbers don't always go up."
Phase 4: The Trader (Charts and Real Trading) – Instead of panic trading swayed by short-term volatility, learn the skills to select favorable price ranges within structural trends based on an understanding of logarithmic charts, support/resistance, patterns, and order book windows.
Phase 5: The DeFi User (Decentralized Finance) – This is the area where the SEC has announced rules for DeFi, AMMs, and tokenized securities trading. Understand staking, lending, LPs, impermanent loss, LTV, and liquidation mechanisms, and learn how to utilize DeFi to survive under regulation.
Phase 6: The Professional (Futures and Options) – Protect your portfolio with short and hedging strategies even during periods of sharp price declines and increased volatility, and learn how to utilize derivatives only within "managed risk" through leverage, margin, and options strategies.
Phase 7: The Macro Master (Macro and Cycles) – Just as the SEC focuses on macro structural reform rather than short-term price defense, investors should cultivate an eye for "liquidity, halvings, and market cycles" rather than daily fluctuations. We review past cycles and portfolio changes through case studies.
As the regulatory direction becomes increasingly clear, the remaining variable is "How prepared am I?" TokenPost Academy offers a consistent framework for reorganizing everything from the basics to DeFi, futures and options, and macro analysis.
Curriculum : 7-step masterclass from basics to DeFi, futures options, and macros.
Special offer : Get your first month free!
Go to : https://www.tokenpost.kr/membership
🔎 Market Interpretation
Despite the recent price plunges of Bitcoin and major altcoins, SEC Chairman Paul Akins has reiterated that the role of regulators lies not in short-term price stabilization, but in establishing a long-term regulatory framework. He has drawn a line under the belief that the high volatility of the cryptocurrency market "is not the responsibility of regulators," reaffirming his commitment to focusing on institutional design rather than price shocks.
Atkins's remarks came at a time when Bitcoin was pushing near $66,000, and Ethereum and XRP were also showing signs of weakness, leading to growing pessimism about a retest of $60,000 and even $10,000. Nevertheless, the SEC is seen as signaling that it will refrain from panicking and restructure its regulatory framework to foster long-term trust.
💡 Strategy Points
1) Reassess regulatory risk: As the SEC shifts from an "enforcement-heavy" approach to a "framework-building" approach, regulatory risks are likely to unfold based on announced rules and guidelines rather than sudden litigation issues. For mid- to long-term investors, a strategy that closely examines actual draft rules and guidelines, rather than regulatory headlines, is effective.
2) Focus on structure, not price: Since the SEC has firmly stated that it will not intervene in short-term price declines, regulatory news is unlikely to immediately boost prices during a market correction. Instead, the future benefits and losses for each sector may vary depending on how the regulatory framework for tokenized securities, stablecoins, and DeFi is designed. Projects that secure a "legal space for experimentation" first are likely to be long-term winners.
3) Opportunity for Builders (Developers and Projects): Just as Commissioner Pierce characterized a bear market as "the time of the builders," teams building "regulatory-compliant products and protocols" are currently more advantageous than those focused on price momentum. The "innovation exemption" proposed by the SEC could provide a pathway for legally testing DeFi tokens in a restricted environment, allowing teams that actively engage in regulatory dialogue to gain a head start in institutional onboarding.
4) Points to watch for DeFi and tokenized securities: If tokenized securities are permitted on a limited basis on DEXs and AMMs, a new market for on-chain securities trading infrastructure could emerge. However, strict conditions regarding transaction volume and duration are expected. Therefore, it is reasonable to develop a project strategy based on a three-stage roadmap: regulatory sandbox, expanded real-world use, and formal approval.
5) Importance of Stablecoins and Custody: Custody guidelines for non-securities like stablecoins have a direct impact not only on exchanges and custodians, but also on DeFi protocols. Future regulations may lower the barriers to entry for banks and traditional financial institutions, requiring a portfolio strategy that considers the restructuring of stablecoin distribution structures and revenue models.
📘 Glossary
Enforcement-heavy (Regulation by enforcement): Rather than establishing clear rules upfront, this type of regulation seeks to tame the market through post-hoc litigation and sanctions, establishing precedents that "this is not how it should be done." This approach has been most strongly criticized by the US cryptocurrency industry.
Project Crypto: A comprehensive cryptocurrency regulatory project jointly promoted by the SEC and the Commodity Futures Trading Commission (CFTC). It aims to establish the legal status of cryptocurrencies, including asset classification standards (security/non-security/commodity, etc.), rules for tokenized securities trading, and guidelines for stablecoin custody.
Tokenized securities: These are assets issued in the form of blockchain tokens, representing traditional securities such as stocks, bonds, and fund shares. While they must comply with securities laws, they can utilize blockchain-based transfer, settlement, and programmable functions.
- Automated Market Maker (AMM): A form of DeFi that automatically calculates and trades token prices using mathematical pricing formulas and liquidity pools instead of order books. Uniswap and Curve are representative examples, and they are also being discussed as a future infrastructure for tokenized securities trading.
Innovation exemption: This is an "experimental exemption" system that allows regulatory agencies to ease some regulations for a certain period and scale to allow testing of new technologies and services. Similar to a sandbox, it's notable as a preliminary step toward institutional integration, as it can be tailored to individual projects or protocols.
- Stablecoin Custody: This service securely stores and manages digital assets, including stablecoins. Key regulatory issues include who can hold customer assets and under what conditions, and how they are protected in the event of bankruptcy.
Schadenfreude / Freudian Freude: Schadenfreude is a German expression meaning "joy at the misfortune of others," and Freudianfreude means "joy at the success of others." Commissioners Pierce and Akins used this expression to convey the message that the cryptocurrency market must overcome cynicism and shift its perception toward tangible results.
💡 Frequently Asked Questions (FAQ)
Q.
Does the SEC's decision not to intervene in a price crash mean it won't protect investors?
The SEC views its role as "establishing market rules," not "defending short-term prices." In other words, while it won't directly purchase Bitcoin or Ethereum when prices drop or take measures to support the market, it aims to protect investors in the long term through rules and enforcement that prevent fraud, market manipulation, and unfair trading. It views price volatility itself as a risk that the market must bear, and instead prioritizes helping investors make rational decisions through clear systems and information disclosure.
Q.
What changes will the "innovation exemption" bring to individual investors?
With the introduction of the innovation exception, some tokenized securities or DeFi-related tokens can be officially experimented with under limited conditions. This means that services currently unable to launch due to legal uncertainty could be released in the form of "test versions." However, because trading periods, volumes, and investor qualifications may be strictly restricted, not all individual investors may be able to freely participate. However, because these experiments are conducted within the scope permitted by regulators, they offer a comparatively higher level of legal stability compared to completely unregulated projects.
Q.
In a bear market like today, what should investors and developers focus on?
Rather than hoping for a short-term price rebound, investors should examine which assets and services are favored by the "Project Crypto" rules being developed by the SEC and CFTC. For example, whether tokenized securities, stablecoins, or DeFi are more likely to be institutionalized could determine which sectors hold promise in the medium to long term. Developers and project teams should focus on creating regulatory-friendly solutions that "actually appeal to people," as Commissioner Pierce put it. By engaging with regulators and establishing standards now, they can lay the groundwork for faster growth when the market recovers.
TP AI Precautions
This article was summarized using a TokenPost.ai-based language model. Key points in the text may be omitted or inaccurate.
Get real-time news... Go to TokenPost Telegram
Are you missing out on the timing to buy and sell?
Determine your investment direction with real-time good/bad news signals.
Copyright © TokenPost. Unauthorized reproduction and redistribution prohibited.
