In the Media

Top line: F- [grade]. Chair Gensler has morphed the SEC from being the gold standard of financial regulators – an agency that protects American investors and the primacy of its capital markets by adapting its statutorily-authorized regulations to innovative technologies – to being an agency that actively engages in merit-based policymaking. That approach is undermining the SEC’s pursuit of its mission and its credibility already. And in turn, it risks doing lasting damage to the agency and the markets it oversees. Watching: The SEC’s ATS/exchange proposal is emblematic of the SEC’s new-found policymaking powers and its disingenuous approach to crypto more broadly. The SEC claims that it is crystal clear everything is within its jurisdiction – and then the agency subsequently makes clear that there is no path to compliance available for anyone or anything that touches a blockchain-based asset. Indeed, this rulemaking proposes that `communication protocol systems’ (a novel and intentionally ambiguous term the proposal does not define) could be national securities exchanges and does not consider whether so-called communication protocol systems could comply with a regulatory regime designed for businesses like the NYSE. Simply put, if you have to exempt cellphones from the definition of a national securities exchange, something has gone very wrong. Future: It’s too soon to tell, but Chair Gensler’s greatest legacy may be reshaping administrative law in fundamental ways.