The SEC's mission is to adopt regulations that benefit the economy as much as it is to bring enforcement actions. But the SEC derives its reputational prestige and its presence in the newspapers from enforcement actions. As a result, the agency tends to overvalue enforcement actions. Giving greater discretion to enforcement staff bolsters that tendency. At the same time, the agency gives almost no discretionary authority to regulatory staff to provide no-action relief that might facilitate…

This is an excellent report with much useful, practical detail. Anyone involved with the implementation of any aspect of the clearing mandate should read at least the section of the report relevant to that issue.

One clear takeaway: there is substantial complexity to this project and numerous moving pieces that must be put into place in order for the mandate not to damage the market for US government securities.  

Another takeaway: assuming the project can be completed…

To read Chair Gensler's remarks, one might think he had spent his tenure at the SEC promoting crypto assets or that he had overcome terrible resistance to allow the clearing of Bitcoin ETFs. Not mentioned is the fact that the SEC's continuing refusal to allow the listing of ETFs on ether was overthrown by the courts as arbitrary and capricious. Also not mentioned is the SEC's complete failure to think through a workable regulatory scheme for cryptocurrencies.  

As to the Chair's…

This action is the direct result of the SEC's failure to develop any workable regulatory scheme for the regulation of cryptocurrencies or to push for legislation that would have provided for such development. It is ironic that the SEC's failed, heavy-handed enforcement scheme should now potentially lead to the possibility of a complete rejection of federal regulation.

In the long run, some type of workable federal regulation of cryptocurrencies is a necessary and desirable outcome.…