This is going nowhere.

For whatever reason, the Administration appears bent on killing off digital assets. For all the problems with digital assets, the assertion that they are a threat to the real economy seems overdone. Digital assets just lost at least two thirds of their value and it didn't impact the real economy (see FRB Governor Waller’s , which touch on the "lack of spillovers" to the rest of the financial industry). Regulated financial institutions are not speculating or…

The proposed changes are very significant. They will likely prove very expensive and cumbersome to implement. In fact, the difficulty of implementing the rules may restrict the range of products, even securities products, in which advisers registered with the SEC may invest for their clients. To take one example, the indemnification provision that investment advisers are required to obtain from their clients may be quite difficult for advisers to obtain, limiting the ability of advisers to…

Apparently, the researcher is saying that digital assets do not pose a risk to traditional financial markets, but if things were totally different, maybe they would. That is hard to dispute. That said, it is hard to give credence to the worry that any investment by banks in the "digital-asset space" poses a risk to the bank system, given that U.S. banks cannot buy digital assets for investment or speculative purposes. Further, the U.S. government already monitors bank involvement in digital…

In regard to the regulation of digital assets, the SEC is often accused of "regulation by enforcement." This seems a model example.

While staking is a common practice, it would not be obvious to the ordinary person that the practice, even as performed in the instant situation, constitutes a security. Therefore, the SEC's determination that in this case the practice constitutes a security may prevail if challenged in court. That said, making that determination in this enforcement…