The deadline for comments on the Securities and Exchange Commission’s proposed Regulation Crypto Assets (Reg CA) passed this week, but feedback continues to trickle in. Notably, most comments support the proposal, which exempts issuers from raising up to $75 million for a project. Reg CA has been crafted along somewhat similar rules that enable online capital formation, Reg CF, and Reg A.
Roughly 75% of comments supported Reg CA, with some caveats or adjustments the Commission will likely consider. The other 25% tend to lean heavily on partisan politics, relevance protection, and investor-protection claims.
While not a scientific tally, about 5% were clear endorsements, and 70% supported the direction with recommended changes. About 10% called for withdrawing Reg CA, with some claiming the SEC lacked authority to create new rules. The remaining 15% leaned toward critiques of shortcomings or off-topic comments.
Industry groups, including crypto exchanges, were clearly supportive. Industry participants have long called for bespoke rules.
The anti-Reg CA cartel included investor-protection advocates, state officials, and progressive/left-wing entities, with groups like Better Markets, NASAA, NY AG, the California Department of Financial Protection and Innovation, and others calling for withdrawal.
Supporters include crypto proponents like Bitwise, Nasdaq, Blockchain Association, DeFi Education Fund, Uniswap Labs, Ripple, Solana Policy Institute, Stellar, Skadden, Wall Street Blockchain Alliance, the Institute for Portfolio Alternatives, and the CFA Institute.
This exercise reflects the axiom that the Perfect Is the Enemy of the Better. It should be obvious to everyone that the emerging sector of finance needs updated rules. No rules will do more harm than rules that may be adjusted over time. And then there is the question of the country’s competitive position in the global digital asset realm. It is far better for the US to guide the way and help define the global regulatory ecosystem than to let another jurisdiction take the lead.
