Read the blockchain group that struggles with US regulators | Long text warning

Who is mediating with US regulators dominated by the US Securities and Exchange Commission (SEC) to fight for a more friendly blockchain regulatory environment?

Libra was born, and the interaction between the encryption world and the regulatory authorities became more frequent. Faced with the cryptocurrency, which is highly uncertain, difficult to regulate, and difficult for the government to share, it is difficult to avoid a strict regulatory situation. And Bitfinex’s attempt to overthrow the New York Attorney General’s Office (NYAG)’s motion for its investigation in the face of the New York Supreme Court has not been approved, and the results of the investigation will remain high in the air for another 90 days.

In the face of a number of government employees whose minds and bodies are rooted in the "old age", the US encryption industry has not waited empty-handedly, but took the initiative to attack and rush to appeal. For example, Ruibo recently sent a letter to the US Congress, urging Congress to speed up the introduction. The relevant regulations on cryptocurrency avoid high-quality enterprises and capital outflows, thus making the United States lose its technological leadership.

In addition to Ripple, there are more institutions/individuals in the regulatory transformation of the blockchain and cryptocurrency. Senior venture capital consultants, entrepreneurs, market and strategy experts, and blockchain industry observer William Mougayar, authoring the new forces under the old regulatory regime, PANews authorized to compile and release.

Kik has previously expressed the most open (and formal) objections to the SEC and challenged the applicability of the 73-year-old regulatory framework to the blockchain, influential companies, associations and individuals. It also expressed dissatisfaction with the current state of the regulatory framework in the United States.

Below, we will introduce the group in alphabetical order , including what they say or the claims, and the types they require to change the regulatory rules.

Anderson Hogwitz Fund (A16Z)

Katie Haun is a general partner of the A16 Cryptographic Fund and a former federal prosecutor. In a recent blog post, Katie believes that the Kik case may be more important for clearer cryptocurrency regulation. She cited several advantages that support the Kik case. The venture capital firm has been publicly and behind the scenes, promoting the existing The need for modernization of securities regulation to better adapt to the new reality of blockchain technology. Katie Haun is the general partner and former federal prosecutor of the A16Z cryptocurrency fund. In a recent blog post by Katie, she said that the Kik case may have become more clear and significant in the area of ​​cryptocurrency regulation, and cited some of the advantages of supporting the Kik case.

Blockchain Association

The Blockchain Association is the most recent Washington-based industry organization dedicated to blockchain promotion and advocacy for decision makers. The association claims that its board of directors includes some of the most respected and respected industry players. They are Coinbase, Circle, Protocol Labs, Digital Money Group (DCG), Polychain, Cumberland, and Anchorage. Recently, the association took over the “Defend Crypto” program initiated by Kik. In addition, when criticizing the SEC, the company's blog is also outspoken.

Main appeal or opinion

+ Blockchain related policies should be generated in an open decision-making or legislative process, during which relevant ideas can be audited, debated, and improved, and any stakeholder can share their views.

+ Congress needs to remain open minded about "understanding the impact of cryptocurrencies"

+ Potential Kik case has a major impact on the open blockchain ecosystem

+SEC staff guide asks more questions than answers

Member of the Diet sent a letter to the White House

On May 24, 2019, a non-partisan letter was sent to Lawrence Kudlow, the director of the White House National Economic Council. Members of the letter include: Trey Hollingsworth, Darren Soto, Bill Foster, Tom Emmer, Ted Budd, Josh Gotteimer, and David Schweikert.

Main appeal or opinion

+ Host a blockchain technology forum to provide input and support to stakeholders.

+Include blockchain technology in your management plan

Member of Parliament sent a letter to the SEC Chairman

In September 2018, more than a dozen members of the House of Representatives wrote to SEC Chairman Jay Clayton, urging his agency to use a plain language to tell investors how it plans to regulate cryptocurrencies.

Main appeal or opinion

+ Clearly when it is determined that the digital token is issued and sold, it should be regarded as an “investment contract” and then recognized as a securities issue;

+ Clarify whether a token originally sold in an investment contract can be considered a non-securities;

+ Describe the tools available to the SEC on these topics that provide more specific guidance for innovators.

Congressional Blockchain Caucus

In September 2018, the 114th Congress established the Congressional Blockchain Core Group, which is expanding significantly and growing. This bipartisan organization believes in the future of the blockchain and understands the role Congress plays in its development. The team believes that the blockchain technology should adopt a non-interventional regulatory approach that allows it to evolve in the same, autonomous way of the Internet.

The core team members include the following members of Congress:

David Schweikert, Bill Foster, Tom Emmer, Darren Soto, John Dewey, Stehpen Lynch), Denny Heck, Mark. Meadows, Jef Duncan, Jerry McNerney, John Larson, Greg Gianforte, Wrren Davidson, Ted Budd, John Curtis, Eric Swallwell.

Led by a member of the Emo, the group proposed three bills to promote its initiative:

Resolution Supporting Digital Currencies and Blockchain Technology (Resolution Supporting Digital Currencies and Blockchain Technology)

Like the Internet, the bill argues that the federal government should provide an easy, consistent, and simple legal environment for the blockchain and express support for the blockchain industry and its development, requiring the US government to:

+ Prioritize the development of blockchain technology to recognize its strengths, allow consumers to protect and support their future innovations, and support the transparency, security and authentication of blockchain technology;

+ Creating an environment that allows the private sector in the United States to lead the innovation of blockchain and further deepen the growth and success of blockchain networks and digital currencies;

+ Federal setting agency dedicated to building a coordinated framework that supports digital currency and blockchain technologies;

+ Avoid undue restrictions on the blockchain network and the trusted decentralized computing services it facilitates;

+ Support and implement a predictable, easy, consistent and simple legal environment for the services facilitated by the blockchain network;

+ Identify the potential benefits and widespread use of digital currency and blockchain technologies in improving public services, promoting business growth, capital formation and investment.

Blockchain Regulatory Certainty Act (Blockchain Regulatory Certainty Act)

It is clear that specific blockchain-related entities that do not control client funds need not be registered as Money Transferrs (Money Trasnmitter), which also seeks protection for non-controlling blockchain services and software developers. Examples of these entities include "miners" who verify network integrity, as well as multisignature providers, which provide users with greater asset security.

Safe Harbor for Taxpayers with Forked Assets Act

In the absence of relevant management guidance, the Act aims to provide a temporary safe haven for hard-fork taxation regulations for convertible virtual currency. In addition, the Act will limit fines for individuals who attempt to file such assets before the Internal Revenue Service (IRS) provides any type of guidance for the appropriate filing of such assets.

Chamber of Digital Commerce

The Washington-based Blockchain/Digital Asset Trade Association has been advocating that the US government needs to demonstrate its support for the development of blockchain solutions in terms of speech and action, and they call on the federal government to develop blockchains. A comprehensive national strategy. The initiative is called the Blockchain National Action Plan.

Main appeal or opinion

+ Prior to law enforcement, policy and regulatory requirements should be defined and established

+ Prevent the patchwork of supervision

+ Establish an official body to coordinate the development of the US blockchain strategy


In a powerful blog post in May 2019, Circle CEO Jeremy Allaire made it clear that the US cryptocurrency policy needs to change. In the next blog post, he outlines Circle's interpretation of the signals recently released by US regulators. A tragic result of Circle is that they have to cut 10% of their employees (30 jobs), which is directly attributed to “restrictive” regulatory conditions.

Main appeals and opinions:

+ US regulators generally regard cryptocurrencies as securities, but we do not agree;

+ US regulators are creating an uncertain environment for cryptographic assets;

+ Stop using the laws enacted in the 20th century for technologies created in the 21st century;

+ Many of the CSI projects do not have the key elements of the Howe test, but their lack does not seem to affect the SEC’s consideration of securities.

+ Disappointed with the consequences of the current guidelines.

Coin Center

One of the most experienced and respected blockchaining organizations in Washington, Coin Center focuses on research, policy maker education, and the promotion of cryptocurrency and decentralized computing. Their work is instructive, and most of them are conducted through private briefings and in collaboration with policy makers to help them develop and form new laws. One of the reports they must read is the Framework for Securities Regulation of Cryptocurrency.

Main appeals and opinions:

Securities industry regulators should avoid cooling promising innovations that are not suitable for Howe's testing, and expose users to fewer risks, such as highly decentralized cryptocurrencies, sidechains, and openness without capital investment. The initial allocation of competitive mining or proof-of-burn mechanisms, ie, no risk capital is provided to the issuer or promoter.

Cooley (Cooley)

Cully is known for its Simple Agreement for Future Tokens (SAFT), which was founded by its former partner, Marco Santori. The powerful company with more than 1,000 lawyers has been actively representing several companies involved in the cryptocurrency sector, including defending companies that are entangled with the SEC. Nancy Wojtas, a partner at Cully, even hinted that the SEC is not the right body to regulate cryptocurrencies.

"Defend cryptocurrency" fund

Originally initiated by Kik, currently managed by the Blockchain Association. Looking ahead, the fund will work to help other projects outside of KIK defend cryptocurrencies. Kik has transferred its initial $500 million to a separate account and promised to transfer another $200 million to the fund, and Kik also called on other agencies to follow suit. All donations will be managed by the Blockchain Association and will be used to influence other litigation in the broader encryption industry.

Electronic Frontier Foundation

The historic Internet agency has sent a letter to the US SEC, opposing the recent ruling against Zachary Coburn, the founder of the decentralized exchange EtherDelta, that the SEC’s violation of this The right to freedom of expression in the First Amendment to the US Constitution.

Main appeals and opinions:

+ computer code is a constitutionally protected freedom of speech (smart contract is the meaning of its title);

+Participating in the development agreement, the person who verified the transaction through mining and writing the code is not responsible for the operating/assisted operating stock exchange;

+SEC's current regulatory context may hinder blockchain innovation, even on decentralized exchanges

Christopher Giancarlo

The outgoing CFTC chairman won the title of "Encrypted Dad" after telling about his discussion of Bitcoin at the family table. Christopher is a celebrity in the progressive regulatory support, as evidenced by his continued support for innovation during his time at CFTC. Specifically, his testimony to the Senate Banking Committee is noteworthy because it emphasizes the need for “no no-harm” regulation .

Main appeals and opinions:

+ "harmless" regulation is the correct overall approach to distributed ledger technology

+ We will support policy efforts to revisit these (existing) regulatory frameworks and ensure that they remain valid and efficient in the digital age;

+ We can't keep the technical elves in the cage. Virtual currency marks how we view the paradigm shift of payment and traditional finance;

+ Regulators have to deal with and participate in such economic activities. Ignoring its development will not let it disappear, it will also make our behavior an irresponsible regulatory act.

Global Digital Finance (GDF)

The London-based Global Digital Finance (GDF) includes dozens of industry leaders committed to building asset stewardship standards, advancing industry compliance and consumer protection. In addition, GDF is committed to building stable currency issuers, secondary market trading platforms, KYC and anti-money laundering rules.


Kik has challenged the SEC through his case. Although the SEC has no real value for Kik's complaint (because Kik has not yet responded), Kik replies to the SEC's Wales (Wells Response; usually, after reviewing the evidence, the SEC staff decides to take further action, They usually provide Welsh Notice to the review subject; the latter can decide whether to respond by submitting a written statement, ie, Wells Response, which challenges the Howell test and the SEC's over-expansion because the latter tried Standardize "money", a business that is not within the scope of its traditional supervision.

Main appeals and opinions:

+ Give up the Howe test

+ Do not monitor cryptocurrencies

+Let entrepreneurs innovate through a pass-through model


In a recent public response to the Canadian Securities Administrators (CSA) and the Investment Industry Regulatory Organization of Canada (IIROC), Kraken strongly opposed the Canadian authorities' implementation of "encrypted assets" on cryptocurrency exchanges. Proposed Framework for Crypto-Asset Trading Platforms, a securities law regulatory framework.

Main appeals and opinions:

+ The regulatory layer needs to distinguish between cryptographic assets that comply with current Canadian securities laws and cryptographic assets that operate only in the form of payments;

+ Clarify the position of the exchange operated by the trustee. To clarify that the “assets are legally owned by the client, not the operator of the exchange”, which is only the trustee and should not be regulated by securities laws;

+ It is neither necessary nor appropriate to implement a securities law regulatory framework for exchanges.

Libra / Facebook

This is an experimental process that has only set off waves. Facebook claims that it will build a desire to link to the global financial system. (Translator's Note: According to some media reports, Facebook has recently held a hearing with the US Congress, its vision or Adjustment).

Apparently, Facebook is closely linked to the US and European regulators. After the former announced the Libra plan, the latter two immediately requested a hearing and inquired and investigated Facebook. I just want to say that if Facebook succeeds, the regulators will open the door to the rise of Bitcoin/Ethernet's non-sovereign currency. There is no doubt that Libra will be a groundbreaking initiative from a regulatory perspective.

Timothy Massad

The former CFTC chairman witnessed the actual outbreak of the blockchain for the first time during his tenure (2014-2017). He was hailed as a chairman who made CFTC open to thinking about blockchain technology. This practice was followed by his succession. Christopher Giancarlo is further promoted. Recently, Timothy wrote a report from the in-depth study published by Bookings, “It's Time to Strengthen the Supervision of Encrypted Assets,” in which he made a series of recommendations that rely heavily on Congressional action as the key to change.

Main appeals and opinions:

+ The SEC has jurisdiction over securities-encrypted assets, but cryptographic assets, including widely traded bitcoins, are not securities;

+ prefer to create a comprehensive regulatory framework through action by Congress;

+ The cryptocurrency industry should not be subject to regulation, and it should form self-regulatory standards in terms of transactions, custody and other functions from now on.


By disclosing the registry and interacting with the regulators, Messari believes that the self-disclosure system can largely alleviate some of the SEC's concerns. Disclosure registration may be the closest option when the SEC has no formal registration procedures for token-issuing or cryptocurrency operations, with the aim of increasing the transparency required by the industry.

William Mougayar (the author himself)

I am not sure where to start. Through my numerous blog posts and interviews on the topic of cryptocurrency, I held a group meeting at the Token Summit and several practical interactions with the top regulators in the US, Canada, and Europe. The news I have heard has been shared with entrepreneurs and regulators.

For entrepreneurs, I have been promoting safe ICO practice strategies and better disclosure methods. For regulators, I have advocated them to conduct harmless regulation. Before they start to supervise, let the market evolve its own time and re-establish it. Examine how the regulator should interpret the current law and aim to escalate the law. What I am most certain is that I advocate the implementation of new types of regulation rather than the existing regulatory framework.

Hester Pierce

As the most outspoken SEC commissioner, Hester Pierce is affectionately known as the "encrypted mother." More importantly, Pierce is already a clear stream within the SEC, although her remarks always begin with such a habitual disclaimer—the opinions are her personal and not representative of the SEC, but she is not afraid of it. The institutions served are criticized. Pierce has always been fierce and fearless, and her several speeches and interviews have brought hope to our cryptocurrency practitioners. Many blockchain enthusiasts are happy to see him become the next SEC female president.

Main appeals and opinions:

+Approve cryptocurrency ETFs

+ Used in a functional network rather than a token sold in an investment contract, not in the category of securities;

+ Enforcement actions are not my preferences for those who are trying to find a fundraising method. Therefore, it is important for the SEC to work with Congress and its regulators to provide a more detailed and well-thought-out regulatory framework;

+ Token distribution is not always perfectly mapped to traditional securities products;

+SEC's old framework may not be suitable for a new world of encrypted assets;

+SEC should not stifle innovation;

+ Urge the SEC to consider whether the new regulatory framework may be more suitable for cryptocurrencies;

+ More willing to see innovators and entrepreneurs spend more time and attention on making better products, providing better services, and radically changing the way we interact with each other.

Perkins Coie Law Firm

Similar to Cully, Perkins Coy, a law firm with 1,100 lawyers, is an influential San Francisco law firm that has been actively advising companies on cryptocurrency and currency products. The company advocates a more amicable regulatory regime for cryptocurrencies under the SEC.

ProShares, Direxion, GraniteShares, Bitwise

These companies were among the nine ETF applications rejected by the SEC (the submitted ETFs), and the reason for the rejection was that the resistance to price manipulation was insufficient.


The world's third-largest cryptocurrency and its underlying organizations continue to disagree with the clarity of the SEC's lack of regulation and assert that the latter has hampered progress. In June 2019, Ricky's CTO David Schwartz publicly expressed his views in a speech at the CB Insight Future of Fintech conference.

Main appeals and opinions:

+ Because uncertainty is imminent, the SEC is putting cryptocurrency companies in an awkward position;

+SEC should make more clarification than law enforcement activities.

Token Taxonomy Act

The bill was supported by Congressman Darren Soto and Warren Davidson, and was reintroduced in 2019. The array of supporters was further expanded and the focus was strengthened. The 2019 token classification bill is quite comprehensive and ambitious in both scope and intent.

Main appeals and opinions:

+ Fixed the lack of definition of digital tokens in the Securities Act of 1933 and the Securities Exchange Act of 1934;

+ instruct the SEC to make some regulatory changes to digital units protected by public key cryptography;

+Adjust the tax on the cryptocurrency held in the individual retirement account;

+ tax exemption for transactions between cryptocurrencies;

+ set a minimum tax exemption for proceeds from the sale or trading of cryptocurrencies rather than cash;

Union Square Ventures (USV)

Union Square Capital is an early supporter of the Coin Center and has recently become a supporter of the Blockchain Association. USV partners Brad Burnham and Nick Grossman held briefings and educational meetings with different policy makers and regulators, while partner Fred Wyerson (Fred Wilson) is a prolific blogger and an online activist on a progressive regulatory theme.

Fred Wilson

As the most open-minded partner of USV, Fred Wyerson mainly communicates industry views through his blog, and has written nearly 150 blog posts covering cryptocurrencies, blockchain entrepreneurship and cryptocurrency regulation.

Main appeals and opinions:

+The cryptocurrency network is different from the company, and the cryptocurrency is different from the securities;

+SEC does not seem to understand that not all crypto assets are securities, most of them are commodities, currencies or utilities, just like frequent flyer journeys, and they can't understand that crypto tokens are not like any of the previous assets – they A new regulatory structure is needed;

What the SEC can't understand is that they don't want to consider a new set of regulatory rules, along with the "regulatory enforcement" strategy, in the field of hurting cryptocurrencies, forcing them to be offshore, and making the vast majority of projects Financing outside the United States and/or contributing to the legal structure that looks like a Frankenstein monster.

Winklevos Brothers: Cameron and Tyler

The twin brothers are known as long-term investors and supporters of Bitcoin, and they operate one of the largest exchanges, Gemini. A cryptocurrency ETF bill proposed by their Winkleworth Trust has been rejected twice. They recently decided to suspend another submission until further notice, in part because the SEC is dissatisfied with the necessary conditions for the approval of such documents. Last year, they launched the Virtual Commodity Association (VCA), a consortium of exchanges focused on self-regulatory principles. Recently, VCA has created six regulatory committees to prepare for its Congressional presentation.

Wyoming (and Carin Long)

Wyoming is fortunate that Kailin is the most enthusiastic promoter and spokesperson for the local cryptocurrency and blockchain. As a native of Wyoming, Karin is the co-founder of the Wyoming Blockchain Alliance and has played an important role in helping the state develop a total of 13 blockchain laws, making the state the only one to offer comprehensive, The US state, which has a welcoming legal framework for cryptocurrency and blockchain, can help blockchain technology boom for both individuals and companies.

Wyoming is already a "Delaware State in the field of digital asset law," as the latter's leading position in corporate law.

The following are key points about Wyoming's latest blockchain law (in March of this year, PANews also interpreted this, reference: Digital Currency Lending: Potential Market and Compliance Variables):

+ Recognize the direct property rights of individual owners for all types of digital assets (virtual currency, digital securities, and general-purpose tokens) and apply the super-negotiability rules of commercial law to virtual currency, by applying The very similar rules of money applied to virtual currency will greatly increase their liquidity. Wyoming's commercial law reflects the true nature of digital assets, and I strongly encourage other states to adopt the same commercial legal protections as Wyoming;

+ Create a financial technology regulatory sandbox to provide financial innovators with a three-year regulatory exemption. Whether in the United States or globally, the regulatory sandbox is widely reciprocal;

+ Authorize a new state-chartered savings agency to provide basic banking services for blockchain and other businesses. Banks must have a 100% reserve, no loans, their depositors are limited to commercial establishments, and FDIC insurance is optional. Such a bank may be put into operation as early as March 31, 2020.

+ The first truly “qualified trustee” authorized for digital assets (it is a bank).

What will happen next?

The above combing represents the industry and the market, and there are a lot of rational voices. People will feel that there is enough collective thinking, which will lead to some very interesting and progressive legislation.

Regrettably, these voices are often influenced by persistent, confusing and contradictory signals from the SEC or its commissioners, as if regulators disregarded market demand, mostly did not participate in it or did not interest.

Of course, other regulatory regimes around the world have adopted more friendly regulation, but no region is more important than here.

Through its chaos (and inaction), the SEC is "ensuring" that the latest blockchain companies in the US are far from being able to realize their potential.

These views and initiatives underscore the seriousness of the situation.

It is not an exaggeration to think that the US SEC has killed the entire liberation of the blockchain industry in the United States.

Although many of the SEC's initiatives are positive, the reality is that the SEC will act quickly (and in the right direction) only after the Congressional bill. At the same time, the SEC is accepting a position to maintain the status quo, although it has little to do with providing so-called guidance and has done little to play.

Regrettably, there is currently no high-level government official who can set the tone and push the blockchain forward. In the Internet age, Vice President Al Gore was the high-ranking person who pushed the Internet forward. He saw the need to hire an e-commerce tsar. This is a rare move that has not yet been blocked. Chain copying.

In collecting these influential people, my goal is to demonstrate the importance of dissent and to see if the industry can be more united to compensate for the SEC's divide-and-conquer strategy (loss).

Regulation cannot define innovation, business talent . Regulators should allow innovation to flourish rather than become a barrier to innovation.

The entire blockchain market wants to innovate, but they have been plagued by a daunting problem: "What do the SEC think?" The truth is that the SEC has injected fear, uncertainty and suspicion into the eyes of the US market and entrepreneurs. This forces true innovators to develop their business in Asia or elsewhere in Europe, and they are emerging from the SEC's heavy regulatory shackles.

Assuming that the United States is ultimately correct, is it possible to recover the lost positions in the blockchain field? This is a typical problem.

The pressure is getting bigger and bigger, and the time left is getting less and less.

Author | William Mougayar (Twitter: Translator | Wang Zelong Proofreading | Cattle