What Are Digital Assets? Don't Ask The SEC! Definition Gets Scrapped From Final Rules

The U.S. Securities and Exchange Commission (SEC) has chosen not to include its previously proposed definition of "digital assets" in the finalized hedge fund reporting rules.

The agency is still considering the term and will not adopt it in the current rule, The Block reported.

The SEC's Form PF rules document applies to investment advisers managing private funds with assets exceeding specific thresholds. It requires them to regularly disclose comprehensive information about their funds to the SEC.

Originally, the SEC proposed the definition of digital assets (assets issued or transferred using distributed ledger or blockchain technology, including virtual currencies, coins, and tokens) last August.

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The SEC's official stance on digital assets remains dubious, although the commission has indicated it may reevaluate the definition of an "exchange" to potentially incorporate decentralized finance (DeFi).

Under SEC chairman Gary Gensler, the commission has actively pursued legal action against cryptocurrency companies, including a recent lawsuit against Bittrex and issuing a Wells Notice to Coinbase.

In response, Coinbase sued the SEC to force the agency to respond to a petition demanding specific rules for digital assets.

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