Marshall Beard

Now that Washington is turning the page on crypto, it is important to take stock of the last four years and think boldly about what comes next. Over the last four years, a small group of regulators in Washington forced wondrous innovation in the digital asset space through a gauntlet. On the one side were a set of securities laws and regulations fashioned in and for another era. Federal securities regulators knew there was no way for our new industry to comply with these anachronistic rules. Yet they refused to engage in a constructive dialogue about how to adapt them for the modern era. On the other side of the gauntlet, federal banking regulators tried to debank crypto—operation Chokepoint 2.0. The obvious goal was to kill crypto and then fold the remnants into tradfi—with the remnants being blockchain technology and the few digital assets that happened to mature into “digital commodities” before the gauntlet was put in place. Nobody should be surprised that these cynical and regressive policies have spawned a massive backlash. Moving forward, the first question to be asked is this: Should the future of crypto policy be framed around an 80-year-old decision about orange groves in Florida? Clearly not. The Howey test has outlived its utility, at least as it applies to the digital asset space. More broadly, labelling some digital assets as “digital securities” and some as “digital commodities” misses the mark. Those labels are rooted in a historical regulatory paradigm that fails to account for crypto’s unique attributes. Worse, they lead some to the conclusion that the SEC and CFTC should share jurisdiction over crypto. Such a model would stifle innovation. This new technology needs a new set of rules. And those rules should be enforced by one primary federal regulator—not two. The lynchpin of the American economic success story has been our ability to innovate at speed. Let’s come together to keep pace with that noble tradition. We need to abandon prior attempts to shoehorn crypto into a regulatory paradigm designed in and for another era. The promising innovation unfolding in the digital asset space warrants an altogether new regulatory approach. Washington should write from a clean slate.