Doc's Daily Commentary

Mind Of Mav

SEC Crypto Regulation: 1 Step Forward & 12 Steps Back?

Today, the SEC Chairman, Jay Clayton, announced he is stepping down.

In his wake, he leaves quite a scene of ambiguity and chaos.

Compounding that, the SEC also released new guidelines today for broker-dealers handling digital assets — in their announcement, they made it clear that they would grant a five-year grace period for special purpose broker-dealers handling digital asset securities:

“…a broker-dealer operating under the circumstances set forth in the statement will not be subject to a Commission enforcement action…”

Or, as “Crypto Mom” put it:

 

The statement does not use the terms “safe harbor” or “no action,” but does indicate that the SEC is not planning to bring actions against most digital asset security broker-dealers as it navigates how to craft new standards.

In a statement outlining the amended procedure, the SEC acknowledged that the “technical requirements” for transacting and holding custody of digital asset securities are different from the traditional securities realm, and the market itself is still evolving.

The regulator says it hopes the five-year window will foster an environment in which firms are developing best practices to be shared with the SEC in the form of formal comments.

“The five-year period in which the statement is in effect is designed to provide market participants with an opportunity to develop practices and processes that will enhance their ability to demonstrate possession or control over digital asset securities,” said the statement. “It also will provide the Commission with experience in overseeing broker-dealer custody of digital asset securities to inform further action in this area.”

Of course, the timing is raising eyebrows due to the ongoing fight between XRP and the SEC.

The move follows official charges recently brought on Ripple executives. Several crypto exchanges have rushed to delist XRP in the US. And notable hedge fund, Bitwise, has already liquidated all of its XRP (3% of the fund) and moved into other crypto assets. While SEC Commissioner Hester Peirce said the announcement was a baby step, others (especially proponents of XRP) called the move “1 step forward, 12 steps back.”

The SEC, according to the statement, seeks to “encourage innovation” regarding digital asset securities.

While the SEC did not specifically name any companies in the release, some onlookers speculate that the timing is not coincidental. An additional quote from an official supplementary document reads:

“The Commission envisions broker-dealers performing the full set of broker-dealer functions with respect to digital asset securities – including maintaining custody of these assets – in a manner that addresses the unique attributes of digital asset securities and minimizes risk to investors and other market participants.”

Ripple CEO Brad Garlinghouse staunchly criticized the uncertain regulatory landscape back in October. Garlinghouse even hinted that Ripple could relocate to a more favorable jurisdiction outside of the US.

The wordy release continues to raise questions regarding the lack of regulatory clarity surrounding digital securities and custody in the country. The Commission appears stuck between an innovation rock and a protective hard place:

“…the Commission is requesting comment to provide the Commission and its staff with an opportunity to gain additional insight into the evolving standards and best practices with respect to custody of digital asset securities.”

 

The ReadySetCrypto "Three Token Pillars" Community Portfolio (V3)

Add your vote to the V3 Portfolio (Phase 3) by clicking here.

View V3 Portfolio (Phase 2) by clicking here.

View V3 Portfolio (Phase 1) by clicking here.

Read the V3 Portfolio guide by clicking here.

What is the goal of this portfolio?

The “Three Token Pillars” portfolio is democratically proportioned between the Three Pillars of the Token Economy & Interchain:

CryptoCurreny – Security Tokens (STO) – Decentralized Finance (DeFi)

With this portfolio, we will identify and take advantage of the opportunities within the Three
Pillars of ReadySetCrypto. We aim to Capitalise on the collective knowledge and experience of the RSC
community & build model portfolios containing the premier companies and projects
in the industry and manage risk allocation suitable for as many people as
possible.

The Second Phase of the RSC Community Portfolio V3 was to give us a general idea of the weightings people desire in each of the three pillars and also member’s risk tolerance. The Third Phase of the RSC Community Portfolio V3 has us closing in on a finalized portfolio allocation before we consolidated onto the highest quality projects.

Our Current Allocation As Of Phase Three:

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The ReadySetCrypto "Top Ten Crypto" Community Portfolio (V4)

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Read about building Crypto Portfolio Diversity by clicking here.

What is the goal of this portfolio? 

The “Top Ten Crypto” portfolio is a democratically proportioned portfolio balanced based on votes from members of the RSC community as to what they believe are the top 10 projects by potential.
This portfolio should be much more useful given the ever-changing market dynamics. In short, you rank the projects you believe deserve a spot in the top 10. It should represent a portfolio and rank that you believe will stand the test of time. Once we have a good cross-section, we can study and make an assessment as to where we see value and perhaps where some diamonds in the rough opportunities exist. In a perfect world, we will end up with a Pareto-style distribution that describes the largest value capture in the market.
To give an update on the position, each one listed in low to high relative risk:
SoV/money == BTC, DCR
Platforms == ETH, XTZ
Private Money == XMR / ZEC / ZEN
DeFi == MKR / SNX and stablecoins
It is the most realistic way for us to distill the entirety of what we have learned (and that includes the RSC community opinion). We have an array of articles that have gradually picked off one by one different projects, some of which end up being many thousands of words to come to this conclusion. It is not capitulation because we all remain in the market. It is simply a consolidation of quality. We seek the cream of the crop as the milk turns sour on aggregate.

Current Top 10 Rankings:

 

 

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