The formal rulemaking process describes the structured procedure followed by government agencies to create, amend, or repeal regulations. This process typically involves publishing proposed rules, soliciting public comments, reviewing feedback, and issuing a final rule. It ensures transparency, public participation, and due consideration of various viewpoints before new regulations are enacted. This systematic approach lends legitimacy to new legal requirements.
Context
For the digital asset industry, the formal rulemaking process is a critical mechanism for establishing clear and predictable regulatory frameworks. Many in the crypto community advocate for this structured approach to develop comprehensive rules, rather than relying solely on enforcement actions. The slow pace of formal rulemaking, however, can create uncertainty for rapidly evolving technologies. Industry participants actively engage in comment periods to influence future regulations.
The SEC's pivot from litigation to rulemaking fundamentally lowers immediate regulatory litigation risk, enabling firms to prioritize architectural compliance build-out.
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