The background to the MFA brief is theexpanding the definitions of "broker" and "dealer" by further defining the term "as part of a regular business." The SEC's proposed rule is a wholly inappropriate rewriting and expansion of the statute. It is beyond the SEC's authority. Even if the SEC had such authority, the analysis in the proposed rulemaking, particularly on the cost-benefit analysis, is completely deficient.  

Chair Gensler's statement raises the question as to why the SEC allowed Coinbase to register with the SEC and to have shares listed on Nasdaq. If Mr. Gensler believed that Coinbase's operations were illegal, then the SEC should have refused to register the securities or charged Coinbase with a crime at the point it sought to go public, if not before that. It seems unlikely to be the case that the SEC expected Coinbase to register as an exchange once its securities were listed on Nasdaq, and…

Though much of this release focuses on the electronic format by which data would be reported going forward, the changes to the information that must be reported is the more significant issue and the one to which firms should attend.

The hearing is further evidence of the inability of the U.S. government to deal directly with innovation. The witnesses continue the longstanding but narrower debate over whether the SEC or the CFTC should have jurisdiction. (See, e.g. )

To date, the SEC has done nothing to put forth a workable regulatory scheme for digital assets. The end result of the SEC's assuming jurisdiction would be largely to junk pile the technology.  

While the CFTC appears more open to…