FinReg scholar & Teacher. Co-organizer of Digital Assets at Duke🎙 Co-Host of Coffee & Crypto with Lee & Jimmie. MOOC Coursera professor - FinTech Law & Policy

Durham, NC
On this week's Coffee & Crypto, @jimmie_lenz & I discuss the pending departures of @HesterPeirce & @SummerMersinger, the potential for AI driven bank runs, & a new @BlackRock report on the intersection of AI & blockchain. Give it a listen! open.spotify.com/episode/2PS…
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Even crypto people now realize the @SECGov is run by and for the crypto industry. Classic leopard ate my face situation.
read the SEC's new crypto assets FAQ the securities laws are starting to look opt-in now, at least as applied by the SEC to crypto if you raise money by selling a non-rights-bearing token, are careful about what you represent or promise, and have a functional crypto system, there is now an extremely broad path outside the securities laws--arguably 'functionality' is not even necessary but there's some equivocation on this the buyback guidance goes further than I expected. once the system is functional, even announcing a token buyback *program* (which I guess even could be a 'perpetual program') does not, in the staff's view, constitute a promise of essential managerial efforts. same for promises to improve the system or grow its network effects so you can retain enormous influence over the thing, keep developing it, support its price with buybacks (including under a permanent "program"), and get many of the benefits of having a public investment instrument, without giving holders the rights or protections that normally come with one they have opened a loophole in a regulatory regime whose whole point was supposed to be that you couldn't draft your way around economic reality (see e.g. papers.ssrn.com/sol3/papers.…) can't really say if this is good or bad, but VCs etc. got a lot of what they wanted & the market should absorb all the implications of this among others, I am growing skeptical how much of a 'long tail' there will be for tokenized equity. . .if you can get people to buy a coin in the style of BNB, HYPE, PUMP, etc., with minimal regulation, why voluntarily take on the burdens of selling them equity? if you are not mag-7 level, it doesn't seem there would be much reason to focus on equity securities for your capital-raising. . . if you want to access 'traditional buyers' you can wrap the token in an equity instrument like an ADR for those institutions. . . the obvious next question is how far this extends beyond crypto businesses. can an ordinary company attach a functional token to its business and apply 100% of its profits to discretionary buybacks, without giving holders any right to those profits or making representations about future business efforts that independently trigger Howey? the FAQ doesn't expressly resolve that, but it opens a pretty enormous door equity still gives investors something a discretionary buyback token doesn't. . .the question is whether the market will pay enough for those rights to make granting them worthwhile. otherwise the incentive is to keep the equity for insiders and sell everyone else the coin crypto's current focus on hyping tokenized equity may be misguided, the bigger trend is "get all the benefits of equity with none of the burdens" of course this is SEC guidance, not a repeal of the statutes or a command to the courts. a private plaintiff or a future SEC could have other ideas but did not think I'd see it in my lifetime. . .the securities laws are being "disrupted" in substantial part by incentivizing making fewer commitments to investors. and if Warren Dems eventually take control and try to undo all this, after an entire market has organized around it, the resulting chaos will be something to behold sec.gov/about/divisions-offi…
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My latest article for The @ConversationUS explains how Trump’s crypto profits undermined the industry’s push for looser regulation. If you weren’t following the CLARITY Act fight all that closely, it’s a quick rundown of what happened and why: theconversation.com/how-trum…
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On the latest Coffee & Crypto, @jimmie_lenz & I discuss all of the post-Clarity finger pointing, the concept of "onchain finance", the @SECGov's new "Innovation Exemption" for tokenized stocks, & @circle's new strategic partnership with @binance & what that implies for the future of stablecoin rewards. Give it a listen: open.spotify.com/episode/61o…
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Lee Reiners retweeted
The Senate said no, so SEC Chair Paul Atkins said yes by decree. My article documents every step of this Frankenstock tokenization debacle: how the order got issued, what it hides, how it contradicts the SEC's DTCC letter and 10 ways it bleeds investors.
Article

The Atkins Tokenization Debacle

Paul Atkins, the current Chairman of the U.S. Securities and Exchange Commission, has now gleefully presided over two crypto-tokenization launches in nine months. The first, at DTCC, was so hedged

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On the latest Coffee & Crypto, @jimmie_lenz & I discussed CLARITY's demise, the @SECGov's new transfer agent proposal & no action relief for @FTDA_US tokenized money market fund custody, a dispute between @AMCTheatres & @RobinhoodApp over tokenized stock, & the banking regulators warning shot to community bank core service providers: open.spotify.com/episode/2sG…
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Covered stablecoin and tokenized deposit insights from the @KansasCityFed's annual Jackson Hole symposium, @worldlibertyfi new trust company being backed by the UAE, & @Uniswap founder @haydenzadams thoughts on how tokenization will supercharge automated market making w/ @jimmie_lenz on the latest Coffee & Crypto: open.spotify.com/episode/3A6…
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Senators Coons and Rounds recently introduced a bill directing @FERC to start planning for the day quantum computers break the encryption protecting the electric grid. Meanwhile, @SECGov is racing to move American capital markets onto public blockchains secured by the exact cryptography Congress no longer trusts to run a substation. When the grid's crypto breaks, a utility patches it. When a blockchain's crypto breaks, you need thousands of anonymous, unaffiliated node operators to agree to a hard fork. Bitcoin has no mechanism to do that. There is no CISA advisory for a chain that refuses to upgrade. Congress is legislating post-quantum resilience for one piece of critical infrastructure while the SEC builds another one on rails that cannot be patched by anyone.cyberscoop.com/quantum-guard…
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On a special start of the semester Coffee & Crypto, @jimmie_lenz & I discussed the White House meeting to jumpstart Clarity, a Trump @HyperliquidX shoutout, the @SECGov's new Regulation Crypto Assets, comments on the SEC's repeal of the Trade-Through Rule, @worldlibertyfi getting an @USOCC trust charter, & @USTreasury's new proposal on key Genius Act provisions: open.spotify.com/episode/1ri…
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The @SECGov proposed Regulation Crypto Assets is a sweeping gift to the crypto industry. It would ease access to retail investors, provide immediate token liquidity, preempt state securities laws, and let crypto projects self-certify their way out of securities-law treatment. My latest for The FinReg Blog: Policymaking by Crypto, for Crypto. sites.duke.edu/thefinregblog…
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I know, right. And then they organize themselves into these things called Democracies which are really expensive to buy. So awful.
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Covered the @SECGov delaying its open meeting on new crypto rules, @WellsFargo tokenizing deposits, @BlackRock's new tokenized MMFs in Europe, UK banks refusing to do business w/ crypto, the latest attempt at tokenizing metals, & a new government policy that may let companies "hack back" w/ @jimmie_lenz on the latest Coffee & Crypto. Give it a listen! open.spotify.com/episode/4w4…
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On the latest Coffee & Crypto, @jimmie_lenz & I discuss the threat quantum computing poses to crypto & my new paper on the subject, the Coinkite Bitcoin wallet hack, & a new crypto index from S&P that excludes Bitcoin: open.spotify.com/episode/0Br…
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This photo has serious ‘mom said you have to let your little brother come’ energy
Enjoyed touring Raikes' feedlot in Ashland, Nebraska, a 5th generation family-run operation that manages about 10,000 head of cattle. Visits like these offer valuable insight into running a successful finishing operation and how the @CFTC and our markets can support our cattle producers every step of the way.
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Yes indeed. Cramer talking about selling all his crypto due to quantum threat while Paul Atkins proudly proclaims capital markets are moving "on chain." You know, maybe someone at @CNBC should ask @SECPaulSAtkins about this. Here's a paper to get you up to speed: sites.duke.edu/thefinregblog…
BREAKING: JIM CRAMER JUST SAID LIVE ON CNBC THAT HE WILL SELL ALL HIS #BITCOIN DUE TO QUANTUM COMPUTERS IBM CEO TOLD HIM "YOU SHOULD BE PARANOID ABOUT IT IN 3-4 YEARS" "PEOPLE NEED TO TAKE THIS MAN SERIOUSLY" WE ARE OFFICIALLY SAVED 🔥
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Paul Atkins invokes Adam Smith & the Founding Fathers to justify @SECGov's retreat from crypto enforcement. His history is wrong. My latest argues that Smith & the Founders were all far more concerned with concentrated private power than Atkins lets on: sites.duke.edu/thefinregblog…
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