On March 6th, the Chamber of Digital Commerce held its Fourth Annual D.C. Blockchain Summit. One of the first panels featured a discussion on the current and future contours of the digital asset regulatory regime with Daniel Gorfine, Director of LabCFTC; Kavita Jain, FINRA’s Director of the Office of Emerging Regulatory Issues; Jessica Renier, Senior Advisor on Domestic Finance for the Treasury Department; and Valerie Szczepanik, the SEC’s Senior Advisor for Digital Assets & Innovation.
Ms. Szczepanik explained that the SEC staff is developing guidance regarding digital assets but declined to provide a timetable for its release. She noted that whether a digital asset is a security will, as it does now, depend on whether it is an investment contract in light of its individual facts and circumstances. Ultimately, the SEC is seeking to promote financial innovation, capital formation, and wealth creation but in balance with investor protections.
Mr. Gorfine discussed the CFTC’s engagement strategy with the digital asset industry, explaining that LabCFTC has engaged in hundreds of conversations with blockchain and digital asset companies. Moreover, he discussed the CFTC’s decision to allow for the self-certification of bitcoin futures, a decision that helped discipline the bitcoin spot market.
Ms. Jain explained that more than 10% of broker-dealers are interested in providing digital asset services, but are concerned about the uncertainty surrounding their custody obligations and their ability to verify their control of a client’s digital asset. She said that FINRA is working with the industry as a whole to ensure compliance.
Concluding the panel, Ms. Renier discussed the Treasury Department’s focus on illicit transactions, explaining that Treasury is seeking to promote innovation by protecting the digital asset market from criminal actors.