Uncovering the new leadership team of U.S. cryptocurrency regulation, how long will it take from taking office to implementation?

Author: jk, Odaily Planet Daily

On January 21, local time in the United States, SEC Commissioner Mark Uyeda replaced SEC Chairman Gary Gensler, who officially stepped down on Monday, and will serve as acting chairman until Paul Atkins (the official nominee to replace Gensler nominated by Trump) completes the Senate confirmation process. On the same day, Mark Uyeda announced the establishment of a cryptocurrency working group, aimed at creating a clear and explicit regulatory framework for U.S. crypto assets, which the crypto industry has long awaited. On January 22, another major regulatory agency for cryptocurrencies, the Commodity Futures Trading Commission (CFTC), also announced its nomination, with Harry Jung (also of Asian descent) designated as the head responsible for crypto assets.

The news sent shockwaves through the industry. In this article, Odaily Planet Daily will analyze the backgrounds of these two Asian leaders, Mark Uyeda and Harry Jung. Why is this considered a significant positive development?

Who is Mark Uyeda? Will he become "Heavenly Mark"?

After Trump was sworn in as president, his administration quickly nominated SEC Commissioner Mark Uyeda (a Republican) as acting chairman. According to a memorandum released by the White House on January 20, this appointment is part of the new administration's adjustments to the leadership of several federal agencies.

What can be confirmed is that Mark Uyeda is a clearly pro-crypto official.

Mark Uyeda (left) is sworn in as an SEC commissioner. Source: YouTube

He has over 15 years of experience working at the SEC and has supported the industry's position on several significant events concerning the crypto industry. However, unlike "Crypto Mom" Hester Peirce, Mark Uyeda is not as well-known in the industry.

So, what has he done?

• He voted in favor of the SEC review on whether to approve ETFs.

• He and Peirce opposed an SEC decision in December 2023. At that time, Coinbase requested the SEC to place the rules regarding cryptocurrency regulation on the formal agenda to establish clear regulatory rules. However, the SEC rejected this request. Uyeda and Peirce believed the SEC had a responsibility to respond directly and establish clear rules.

• He has expressed strong views on the SEC's role in the digital asset space. He frequently criticizes the SEC majority's regulatory actions against the crypto industry, such as the so-called Staff Accounting Bulletin No. 121 (SAB 121), which makes it difficult for banks to provide services to digital asset clients. He has stated support for the repeal of this policy, and this decision is now within his authority.

• Additionally, he previously established connections with the crypto sector during his consulting work in Washington.

From the SEC's official statement, it can be seen that Mark T. Uyeda was born in Orange County, California, received a Bachelor of Business Administration from Georgetown University in 1992, and graduated with honors from Duke University School of Law in 1995. In the early stages of his career, he worked as a lawyer in Washington and Los Angeles, later joining the California securities regulatory agency, the California Department of Business Oversight, as chief advisor. During Trump's first term, he held positions in the senior leadership of the U.S. Department of the Treasury and the U.S. Department of Labor. He also served as a detailee to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. At the SEC, he served as a senior advisor to Chairman Jay Clayton, legal advisor to Commissioners Michael S. Piwowar and Paul S. Atkins, and as assistant director and senior special advisor in the Division of Investment Management, ultimately becoming an SEC commissioner on June 30, 2022.

"I am honored to serve in this capacity after being a commissioner since 2022 and participating in the SEC's work as an employee since 2006," Mark T. Uyeda stated. "I have great respect for the knowledge, expertise, and experience of the SEC and its staff. The SEC's mission is critical—protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation, which plays a key role in driving innovation, creating jobs, and realizing the 'American Dream.'"

By the way, his full name is Mark Toshiro Uyeda, which is clearly a Japanese surname. Based on the common practice among Japanese Americans of placing their Japanese names as middle names, his Chinese name should be 上田俊郎.

According to customary practice, although the acting chairman has the same powers as the official chairman, typically, the acting chairman may choose to delay significant decisions, waiting for the new chairman to take office. This means that Mark Uyeda is unlikely to make major decisions, such as approving an ETF, before the new chairman takes office, and will likely wait until Paul Atkins is in position.

The Dismal Departure of Gary Gensler

Gary Gensler resigned on the day Trump was sworn in, according to previous statements. Almost all senior legal officials who worked under Gary Gensler, including personnel from the enforcement division and the Office of the General Counsel, have left, suggesting that his entire team has departed. Reports indicate that former SEC Chief Economist Jessica Wachter and General Counsel Megan Barbero have also left, while Chief Accountant Paul Munter is expected to depart on January 24.

The mere fact of Gary Gensler's departure is enough to excite the crypto industry.

After these departures, compared to the CFTC, which has a bipartisan ratio of 2:2 among commissioners, the SEC has a Republican commissioner majority of 2:1 over the sole Democratic commissioner.

Since becoming an SEC Republican commissioner in June 2022, Mark Uyeda has criticized Gary Gensler's rule-making and enforcement approach. However, on the day of Gensler's departure, these commissioners still gave the former chairman enough dignity: "While we as commissioners have differing positions on policy issues, our disagreements have always maintained dignity. Chairman Gensler's commitment to bipartisan cooperation and respectful dialogue has enhanced our ability to serve the American public."

U.S. Version of MiCA: A Clear and Explicit Regulatory Framework for Crypto Assets

On Tuesday, Mark Uyeda announced the establishment of a "cryptocurrency working group," aimed at "developing a comprehensive and clear regulatory framework for crypto assets." The renowned "Crypto Mom" Hester Peirce will lead this working group. According to the press release issued on Tuesday, the group's goal is to provide clarity on registration requirements and offer practical solutions for businesses attempting to register.

The SEC's statement is very brief and powerful, excerpted as follows:

SEC Acting Chairman Mark T. Uyeda today announced the establishment of a special working group on cryptocurrency, dedicated to developing a comprehensive and clear regulatory framework for crypto assets. SEC Commissioner Hester Peirce will lead this working group.

…

The working group consists of outstanding staff from various SEC divisions and will collaborate with internal staff and the public to establish a reasonable regulatory direction that is within legal boundaries for the SEC.

To date, the SEC has primarily regulated cryptocurrencies through enforcement actions in a retroactive and passive manner, often employing novel and untested legal interpretations. This approach lacks clarity on registration requirements and practical solutions, leading to confusion over legitimacy and creating an environment that is detrimental to innovation and fosters fraud. The SEC can do better.

The focus of the working group is to help the commission delineate clear regulatory boundaries, provide practical registration pathways, establish a reasonable information disclosure framework, and wisely deploy enforcement resources.

The working group will operate within the legal framework established by Congress and will provide technical support as Congress modifies the framework. The group will also coordinate with other federal departments and agencies (including the CFTC), states, and international partners.

"I look forward to Commissioner Hester Peirce's efforts in leading cryptocurrency regulatory policy, which involves multiple divisions and offices of the SEC," Acting Chairman Uyeda stated.

"This task requires time, patience, and a great deal of effort. This work can only succeed if the working group can gather input from a broad range of investors, industry participants, scholars, and other stakeholders. We look forward to working closely with the public to foster a regulatory environment that protects investors, promotes capital formation, maintains market integrity, and supports innovation," Commissioner Hester Peirce stated.

The working group plans to hold roundtable discussions in the future and welcomes the public to provide feedback via Crypto@sec.gov.

Whether it is a clear and explicit regulatory framework or the SEC's indication of rejecting retroactive and passive regulatory approaches (such as allowing Coinbase and exchanges to operate directly from the start but immediately suing when issues arise), these are things the entire crypto industry has long sought. It is evident that a regulatory-friendly period for the crypto industry has thoroughly arrived, and the U.S. will introduce a series of clear regulatory measures for crypto assets to clarify what can and cannot be done, thereby transitioning the crypto industry from the "Wild West" to more standardized financial compliance products.

So how long will this cycle take? By comparing it with the EU's crypto regulatory framework, we can see that the EU's Markets in Crypto-Assets Regulation (commonly known as the MiCA framework) was first published in June 2023 and, after several industry consultations and applications, is set to officially take effect at the end of 2024. Therefore, relatively speaking, if Mark Uyeda's working group can achieve the same efficiency, we can expect to see the regulatory framework officially introduced within this Trump term, benefiting the entire industry.

Timeline for the implementation of the EU MiCA. Source: European Securities and Markets Authority

CFTC: Harry Jung, Another Pro-Crypto Individual

CFTC? SEC? What do they each regulate?

Before introducing the second Asian executive, let's first explain the differences between the CFTC and the SEC.

The SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission) are two major agencies in the U.S. financial regulatory system, and their responsibilities and regulatory scopes are very different. The primary task of the SEC is to regulate the securities market, protect investors, and maintain the fairness and transparency of the market. It is responsible for overseeing financial products defined as "securities," such as stocks, bonds, and options, and regulates the activities of securities exchanges, investment advisors, and brokers. Its regulatory framework is based on the Securities Act and the Securities Exchange Act, which clearly define "securities."

On the other hand, the CFTC focuses on regulating the commodity futures and derivatives markets. Its responsibilities include ensuring that the futures, options, and derivatives markets are fair and transparent while preventing market manipulation. The CFTC's regulatory authority is based on the Commodity Exchange Act (CEA), which defines the concepts of "commodities" and "derivatives," providing the CFTC with regulatory power.

However, the emergence of crypto assets has blurred the regulatory boundaries between the SEC and CFTC. Crypto assets have been oscillating between definitions of securities and commodities; Bitcoin and Ethereum are viewed as "commodities" by the CFTC because they are typically used as stores of value or means of gas payment, similar to commodities like gold. However, certain crypto tokens, especially those issued through ICOs, may resemble securities more closely because they involve investors putting money into an entity with the expectation of profits from the efforts of others. According to the SEC's Howey Test, such assets may be classified as securities.

One significant reason for the ambiguity of crypto assets between the SEC and CFTC is that current laws do not clearly define the classification of crypto assets. Both the SEC and CFTC regulate crypto assets based on their respective legal frameworks, but since crypto assets may possess attributes of both securities and commodities, the regulatory scopes of both agencies inevitably overlap (and compete for authority). This is why the aforementioned "clear regulatory framework" is so important.

Who is Harry Jung?

According to the CFTC's announcement, Acting Chairman Caroline D. Pham today announced that Harry Jung will become the Chief of Staff. He will serve as the chief advisor to Acting Chairman Caroline Pham while leading the CFTC's work in the areas of cryptocurrency, decentralized finance (DeFi), and other digital assets, continuing to advance related work based on his role as a designated federal officer on the CFTC Global Markets Advisory Committee.

Harry joined the CFTC in 2023, serving as an advisor and senior policy advisor to then-Commissioner Caroline D. Pham. Before joining the CFTC, Harry held multiple positions at Citigroup, including being a member of the CEO's office and the Chief Administrative Officer (CAO) office, and served as the head of capital markets regulation in the regulatory strategy and policy department. In this role, he briefed the executive team on key market developments and impacts, coordinating enterprise-wide working groups to address emerging issues and global policy forums. Harry also coordinated emerging issues and global policy forums across the company, leading regulatory interactions regarding digital assets with U.S. prudential regulators and capital markets regulators. Additionally, he led several cross-business and functional projects in the compliance department's regulatory liaison and examination management areas.

Before joining Citigroup, Harry worked at Morgan Stanley, where he was responsible for conducting internal compliance examinations and developing policies for new activities in wealth management. He also served at the Financial Industry Regulatory Authority (FINRA), leading examinations of broker-dealers to ensure compliance with securities regulations.

From Harry's background, he is also a pro-crypto official who understands the industry from within the regulatory framework. This further validates that Trump's commitment to the crypto industry is gradually being realized, starting with the appointment of pro-crypto individuals to all key positions.