This is a segment of the Forward Guidance Newsletter. Subscribe to read the full edition.
The SEC did a lot between Gary Gensler’s departure in January and Paul Atkins’ confirmation last week.
Some of the latest actions are crypto-related disclosure statements from the institution’s corporate finance department. And the SEC once again asked the court to suspend the case.
But what is the most meaningful move the SEC in recent months? According to Kyla Curley, a partner at Stoneturn, the agency’s rapid creation of a cryptographic task force and its corresponding roundtable.
The roundtable is especially important given that “includes stakeholders in all aspects of the industry, extending far beyond the perspectives and objectives of regulators and lawmakers.”
The SEC’s second crypto roundtable, hosted last Friday, focused on adjusting the regulations of crypto trading. The panelists came from a variety of employers, including the huge centralized Coinbase and decentralized player Uniswap Labs. The speakers also included legal experts and leaders on the New York Stock Exchange.
Acting SEC Chairman Mark Weda acknowledged some challenges (with a pre-recorded virtual appearance). Example: National Stock Exchanges can list registered securities only, but most tokenized securities in today’s market are unregistered.
Compliance with the “Order Protection Regulation” may not be possible in a variety of tokenized or non-tokenized securities transactions in the on-chain and off-chain markets, he added. There is also the fact that (unlike stock exchanges) crypto trading platforms may handle custody, execution and Clear.
At one point, the panelists were asked about their main wishes regarding future SEC actions.
Jon Herrick, chief product officer at NYSE, had a general question about the problem to solve (you can start with a solution and search for problems that it can solve).
Texture Capital CEO Richard Johnson said the goal should reach the point where the blockchain is used as an official record of securities ownership. We use smart contracts for settlements. We also use Stablecoins/Tokenized Treasurys for cash legs in our securities transactions.
Coinbase’s Gregory Tusar wanted a little more concrete, seeking a “overall and integrated” market structure where securities and products could be traded side-by-side.
“When you have a conversation about securities and products, you come to believe there are these very clear swimming lanes,” he said. “But in reality it’s not so clean and accurate.”
Some panelists went a step further. Johnson and Ulvin Finance co-founder Dabrauer said the SEC and CFTC should merge.
Austin Reid, head of revenue and business at Falconx, noted that the integrated regulations will unlock innovation and allow US companies to compete globally. For example, companies like Falconx and Coinbase said they would find they could work with more than 50 regulatory authorities (SEC, CFTC, US states, and other local agencies).
Katherine Minarik, Chief Legal Officer of UNISWAP Labs, urged the committee not to intentionally (or accidentally) hamper the future potential of Defi Tech by requiring them to act like centralized finance.
Her wish was: “It’s about the SEC becoming a champion for the importance of privacy and safety values for the everyday people that come from peer-to-peer transactions, self-reliance technologies, and the kind of technology.”
Discover more from Earlybirds Invest
Subscribe to get the latest posts sent to your email.
