Blockchain Leaders in the Regulatory Struggle

As Kik publicly challenges the applicability of the SEC's 73-year regulatory framework in the blockchain space, some influential companies, associations, and individuals have also begun to express dissatisfaction with the current regulatory situation in the United States.

The following introduces these important participants in alphabetical order, including their main views and demands:

Andreessen Horowitz Fund ( A16Z )

Katie Haun, a general partner at A16Z Crypto Fund, believes that the Kik case may have significant implications for cryptocurrency regulation. She listed several reasons supporting Kik and stated that top venture capital firms have been publicly and privately advocating for the modernization of existing securities regulation to better adapt to the new realities brought by Blockchain technology.

Blockchain Association

The industry organization based in Washington is dedicated to promoting Blockchain and educating decision-makers. Board members include well-known companies such as Coinbase and Circle. Recently took over the "Defend Cryptocurrency" initiative launched by Kik.

Main appeal:

• Blockchain policies should be generated through an open decision-making or legislative process.
• Congress needs to keep an open mind and understand the impact of cryptocurrency.
• The guidance documents from the SEC raise more questions than they answer.

Members of Congress Send Letter to the White House

In May 2019, several independent lawmakers sent a letter to the Director of the White House National Economic Council, calling for:

• Hold a Blockchain technology forum to hear stakeholders' opinions.
• Incorporate Blockchain technology into the management plan

Members of Parliament Send Letter to SEC Chairman

In September 2018, more than a dozen congressmen sent a letter to SEC Chairman Clayton, urging:

• Clarify when the issuance of tokens is considered a securities issuance
• Clarify how tokens originally sold as securities transform into non-securities.
• Describing tools that the SEC can use to provide more specific guidance for innovators

Congressional Blockchain Core Group

Composed of members from both parties, believing in the future of Blockchain and understanding the role of Congress in its development. Advocating for a non-interfering regulatory approach to Blockchain.

Three bills have been proposed:

1. Resolution supporting digital currencies and Blockchain
2. Blockchain Regulatory Certainty Act
3. Taxpayer Fork Asset Safe Harbor Act

Digital Chamber of Commerce

The association based in Washington calls on the U.S. government to formulate a comprehensive national Blockchain strategy.

Main Appeal:

• Clarify policies and regulatory requirements before enforcement.
• Preventing regulatory patchwork
• Establish an official agency to coordinate the United States Blockchain strategy.

Circle

Circle CEO Jeremy Allaire clearly stated that the U.S. cryptocurrency policy needs to change.

Main Points:

• Oppose the general view of cryptocurrencies as securities
• U.S. regulators are creating an uncertain environment for crypto assets.
• Stop using 20th-century laws for 21st-century technology
• Many token projects lack the key elements of the Howey test, yet the SEC still considers them as securities.

Token Center(Coin Center)

A senior blockchain promotion organization focused on research, educating policymakers, and promoting cryptocurrency technology.

Main Points: Securities regulators should avoid stifling innovations that are not suitable for the Howey test, such as highly decentralized cryptocurrencies, sidechains, etc.

Cooley Law Firm ( Cooley )

A law firm known for founding SAFT. It has actively represented cryptocurrency companies, including defending those entangled with the SEC. Partner Nancy Wojtas even suggested that the SEC is not the right agency to regulate cryptocurrency.

"Defend Cryptocurrency" Fund

Originally initiated by Kik and now managed by the Blockchain Association. Committed to helping more projects defend cryptocurrency.

Electronic Frontier Foundation ( EFF )

A letter to the SEC opposing its ruling against the founder of the decentralized exchange EtherDelta, arguing that it violates the right to free speech.

Main points:

• Computer code is protected speech under the Constitution.
• Participants involved in the development of protocols and mining verification transactions are not responsible for the operation of the securities exchange.
• The current SEC regulation may hinder Blockchain innovation.

Christopher Giancarlo

The outgoing CFTC chairman, a supporter of gradual regulation.

Main Points:

• Adopt a "harmless" regulatory approach to distributed ledger technology.
• Support the review of existing regulatory frameworks to ensure their effectiveness in the digital age.
• Regulatory agencies must participate in emerging economic activities; ignoring their development is irresponsible.

Global Digital Finance Association ( GDF )

Headquartered in London, it includes dozens of industry leaders dedicated to establishing asset custody standards, promoting industry compliance, and consumer protection.

Kik

Challenge the SEC through its case. Challenge the Howey test and the SEC's overreach in its response to Wales.

Main demand:

• Give up the Huwei test
• Do not regulate cryptocurrency
• Enable entrepreneurs to innovate through token models

Kraken

In response to Canadian regulators, strongly oppose the implementation of a securities law regulatory framework on cryptocurrency exchanges.

Main points:

• It is necessary to distinguish between crypto assets that comply with current securities laws and those that are only used as a means of payment.
• Clearly operate as a trustee and position the exchange, which should not be regulated by securities laws.
• It is neither necessary nor appropriate to impose a securities law regulatory framework on exchanges.

Libra / Facebook

Facebook announced plans to build a global financial system, drawing the attention of regulators and hearings. If successful, it could pave the way for the development of non-sovereign cryptocurrencies.

Timothy Massad

The former chairman of the CFTC recently wrote an article suggesting to strengthen the regulation of crypto assets, mainly through congressional action.

Main points:

• The SEC has jurisdiction over securities-like crypto assets, but widely traded crypto assets like Bitcoin are not securities.
• Tends to create a comprehensive regulatory framework through congressional action.
• The cryptocurrency industry should start establishing self-regulatory standards from now on.

Messari

It is believed that the self-disclosure system can alleviate the SEC's concerns to a large extent. It promotes the industry to improve transparency.

William Mougayar

Share opinions through various means such as blogs and speeches.

Main Claim:

• Promote safe ICO practices and better disclosure methods to entrepreneurs.
• Call on regulators to adopt a benign regulatory approach, allowing the market to evolve on its own for a period of time.
• Implement new regulatory models instead of enforcing existing regulatory frameworks.

Hester Peirce

The "dissenting voices" within the SEC, known as the "crypto mom," have publicly criticized the SEC multiple times, bringing hope to the industry.

Main Points:

• Approve cryptocurrency ETF
• Tokens used in functional networks do not fall under the category of securities.
• The SEC should consider whether a new regulatory framework is more suitable for cryptocurrencies.
• Innovation should not be stifled.

Perkins Coie ( Law Firm

Law firms that actively provide advice on cryptocurrency and token products to companies. Advocating for a more crypto-friendly regulatory framework under the SEC.

Ripple

The world's third-largest cryptocurrency continues to express objections to the SEC's lack of clear regulation.

Main Points:

• The SEC is putting cryptocurrency companies in an awkward position.
• The SEC should provide more clarification rather than enforcement actions.

Token Taxonomy Act )

The bill supported by Congressmen Soto and Davidson is comprehensive in scope and ambitious in intent.

Main content:

• Amend the definition of digital tokens in the Securities Law
• Guide the SEC in regulatory reform for digitally protected units through cryptography
• Adjust the taxation on cryptocurrencies
• Implement tax exemptions on cryptocurrency transactions

Union Square Capital(USV)

Support Coin Center and the Blockchain Association. Partners hold briefing sessions with policymakers. Fred Wilson conveys industry perspectives through his blog.

Fred Wilson's main points:

• The encrypted network is different from companies, and cryptocurrencies are different from securities.
• The SEC seems to misunderstand that not all crypto assets are securities.
• The SEC is unwilling to consider new regulatory rules, which is harming the cryptocurrency sector.

Winklevoss Brothers

Long-term Bitcoin investors, operating the Gemini exchange. Their ETF application was rejected by the SEC. They initiated the Virtual Commodity Association (VCA), focusing on self-regulatory principles.

Wyoming

Under the promotion of Caitlin Long, 13 blockchain-friendly laws were enacted, making it the only state in the United States to provide a comprehensive cryptocurrency-friendly legal framework.

Main Content:

• Acknowledge individual direct ownership of digital assets
• Create a fintech regulatory sandbox
• Authorize new state-chartered savings institutions to provide banking services for Blockchain business.
• Authorizing the first true "qualified custodian" for digital assets

Despite strong calls from the industry, the SEC seems to be maintaining the status quo, lacking clear guidance. So far, no high-level government officials have stepped forward to promote Blockchain development. The entire industry wishes to innovate, but is troubled by the question of "What will the SEC think?" This has forced many innovators to turn to other regions to develop their businesses.

The pressure is mounting, and time is running out. The United States needs to take action, or it may lose its leading position in the blockchain field.