All crypto policy at @SECGov would not be possible without @HesterPeirce

Thank you for your leadership @HesterPeirce! I remember when I reached out to you about 10 years ago when I was new financial services committee staffer and you were at a think tank and you made time to meet with me. As great of a policymaker you are, I agree with everyone that says you are an even better person!

Timely speech from @HesterPeirce given to @SIFMA today: "Today society is at a crossroads. Down one path lies the status quo: more data collection, more intermediary surveillance, more “know your customer” requirements that turn our financial rails into a panopticon. Down the other path lies an opportunity to use new technologies to improve our ability to catch criminals while collecting less personal information than ever before, and monitoring more sparingly to protect Americans’ privacy."

Commissioner @HesterPeirce's Statement on Today's @SECGov Innovation Exemption Order is one of the best characterizations of DeFi we've ever seen. "What does the order not do? This order is not about decentralized finance. Truly decentralized systems that are driven by automated software do not give rise to the foundational concerns underlying securities regulation, namely that an intermediary you trust to act on your behalf will be foolish, careless, or compromised. An investor does not need an exemption to avail herself of permissionless smart contracts that mediate peer-to-peer trading." Thank you, Commissioner Peirce, for your tireless leadership defending the values that matter to builders of blockchain technology and DeFi systems.

The innovation exemption is an actual thing: sec.gov/newsroom/press-relea…

back to my better content piped.video/mG8vLmA3fkI?si=zhbi…

My thanks go to everyone who put so much effort into the CLARITY Act— across the Administration, Congress, investors, and innovators. Our collective conviction that America must continue to lead is indispensable. I have been unequivocal: with or without legislation, we will act decisively within the SEC’s statutory authority to deliver certainty for American investors and for the entrepreneurs shaping our technological future. Stay tuned.

The best a constructive regulator can do is revise rules, within the authorities granted by Congress, to move the ball forward. But a constructive regulator is only as effective as the extent and quality of engagement it gets from industry. We have constructive regulators in the US (for now). Is industry engaging them enough? And where industry engages, does industry internalize the limits of regulatory power granted by Congress so as to ensure that paths forward suggested are actually feasible? I am not sure...

We've been doing some stuff for years now. sec.gov/securities-topics/cr… Want us to do more? sec.gov/about/crypto-task-fo…

Thomas Barrandon - Body piped.video/82dmO9l6nNU?si=C4sq…

Family Tree (Official Visualizer) - Ethel Cain piped.video/L9I6YUWaAhw?si=D8EB…

The transfer agent rule proposal, more than a decade in the making, is finally out. We welcome comment on all aspects, including implications for tokenization: sec.gov/files/rules/proposed… and sec.gov/files/34-106246-fact…

GTA 6 is, as expected, the new crown achievement of humanity. A digital cathedral built by thousands of the very best artists & engineers over years of dedication, both art & software of unfathomable complexity, only made possible by incomprehensible levels of craftsmanship.

GTA 6 in Trailer 1 (2023) vs Extended Look (2026)

8 citations to LeXpunK’s Gensler-Era “Regulation X Proposal” in the SEC’s new Regulation Crypto Assets release. Good company alongside many of our frens’ work too.

SEC Commissioner Hester Peirce off the top rope… “A whole generation has struggled with the SEC’s insistence, without regard for adverse effects on investors & entrepreneurs, that people apply a set of inapt rules to crypto.” In less than two years, SEC’s approach to crypto has gone from harsh regulation by enforcement to commonsense regulation aimed at fostering innovation. Love to see it.

The @SECGov just proposed Regulation Crypto Assets, its first actual rulebook for token offerings. The gist: you can raise money selling tokens under a $5M exemption or a $75M one, and there's a defined way for the token to stop being a security when the company's work is done. For a decade, the SEC's answer to "how do I sell a token legally" was "register it like an IPO" (or the infamous "come in and talk to us"). Nobody could since public company requirements don't track well for a distributed system. In March, the Commission finally wrote down what a lot of us had been arguing: the token itself usually isn't the security, the promise to build the network is. That promise is the "investment contract" and today's proposal builds the on-ramps around that idea. Call them the startup exemption and the fundraising exemption. The startup exemption: Sell or give away up to $5M of tokens over 4 years, once per token. Capital raises count, but so do airdrops, points-style usage rewards & validator or governance rewards. The paperwork is light. File a short notice to the SEC, plain-English disclosures on your website (who's building, what you promised, how you're doing on it), and a report when the 4 years are up. Retail can buy, you can market it publicly & the tokens aren't restricted. The fundraising exemption: Reg A (the "mini-IPO" rule) with a token skin: up to $20M or $75M per year, prepare a formal offering document the SEC reviews, and make ongoing reports after. This higher threshold comes with a few hooks, though. Retail investors are capped at 10% of income or net worth, reports never turn off, and only US companies with US management can use it (and at the $75M level they need audited financials). The Safe Harbor. If you've finished (or permanently stopped) the work you promised token holders that you would do and you file a report saying so, the SEC treats the investment contract as over and the token is just another thing that a company made and distributed. @HesterPeirce floated a version of this back in 2020 tied to decentralization, but this one turns on whether YOU finished your job rather than how many validators the network has. Why does this matter? The biggest problem with tokens wasn't the sale, it was that nobody could say when the security stopped being a security. So what happened? Exchanges, custodians & funds treated every token like it was radioactive forever. A filed, dated, public exit is the thing every one of them wanted to point at when questioned about their treatment. There's much more to cover in the proposal than a single not-too-long post can get to, but here's a few other fun easter eggs: State securities laws are preempted, both for the offering and for people trading the token afterward (as long as filings are kept current, no pressure). And second, slipped into a footnote, the SEC says these investment contracts aren't "equity securities," so a big holder count won't force you into full SEC registration. They ask whether to make that official. Please do 🙏 The two exemptions are definitely a useful step, but Congress can rewrite them, and every commissioner said today they still want the Clarity Act. How far we've come. A few years ago "is this token [offering] a security" led to a high six-figure legal bill, a memo that ends in "maybe," and possibly a subpoena from a government agency. Now that same question is about to have a real answer and a real pathway.

Build. Disclose. Make it functional. Keep enhancing. That’s the token lifecycle the SEC’s proposed Regulation Crypto Assets recognizes. When a pre-functional token is sold subject to an investment contract, it is reasonable to require disclosures. Once those promises have been met, the investment contract can end. Importantly, the team and other contributors can continue improving the project without causing the token to become subject to a new investment contract.

My statement on Reg Crypto Assets: sec.gov/newsroom/speeches-st…