Crypto vs. SEC: A Hilarious Tale Unfolds

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Behold, dear spectators, how the formidable laws of these United States stumble when asked to pirouette before even a single digital coin! Mark you this parade of crypto connoisseurs who, like lovesick suitors, sought the favors of that most scrupulous of overseers — the Securities and Exchange Commission (SEC) — yet ended in sorrowful defeat. Or so counsels Master Rodrigo Seira, a legal sage with Cooley LLP, who addressed a most curious House Committee on the ninth day of April. ⚖️🤔

This grand hearing — styled American Innovation and the Future of Digital Assets Aligning the U.S. Securities Laws for the Digital Age (forsooth, a title lengthier than a French tragedy!) — assembled Seira, Mistress Tiffany J. Smith of WilmerHale, the venerable Jake Werrett from Polygon, and the sharp-witted Alexandra Thorn from the Center for American Progress. 💼🚀

“Pray observe how the present securities framework sighs and swoons at the mere notion of crypto,” quoth Seira. “’Tis plain it cannot suspect itself a fitting garment for such modern finery. Lo, the SEC’s suggestion that one might simply register a token is but a jest unworthy of a jester!”

Yet Master Seira did concede that promoters of fresh blockchain fancies who raise gold from the populace must not slip from the watchful gaze of federal securities laws. Indeed, yes. 🤷‍♂️💰

“But in practice, dear hearts, no crypto venture has danced through the proper registration steps and lived to pen a merry ballad of triumph,” he lamented, adding:

Projects that have ventured forth to satisfy the SEC’s inscrutable demands poured forth their treasures aplenty with naught but a feeble or uncertain existence to show. And verily, if one registers a token like one does a stock, one invites all manner of public disclosures thereafter, as though joining a never-ending masque.

Righting the ship

Ladies and gentlemen, it so befell that Representative Bryan Steil, steward of the Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, did note the many high walls and ditches dug by earlier regimes. He declared these same obstacles must now be smoothed over by new legislation, to which we may only say, “Huzzah!” 🏛️🏴‍☠️

’Twas under the era of President Donald Trump, so ‘tis claimed, that lawmakers are turning the ship’s wheel with new laws wise and gentle, says Steil. The first sign of progress arrived last week, when the House Financial Services Committee advanced the so-called STABLE Act, regulating stablecoins that cling to the U.S. dollar like barnacles. 🏦💸

A month prior, the Senate Banking Committee waved forth the GENIUS Act, which aspires to ensure stablecoin issuers hold ample reserves and remain allergic to money laundering. But wait, there’s more merriment: next on the menu is a comprehensive digital asset market structure bill, says Steil. Such hope! Such promise! 🪙🙌

Representative Ro Khanna proclaimed with a flourish that a market structure law shall sail across the legislative finish line this year. The chief aim? To instill order and clarity in the realm of crypto, to define its many shapes and forms — all under the watchful eyes of the SEC and the Commodity Futures Trading Commission. May the comedic tragedy of uncertain rules soon meet its reprieve! 🤡🏆

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2025-04-09 19:51