How does the SEC determine if a token is a security? Why is DeFi particularly hard to regulate? What will regulators do about stablecoins? On Unchained, Greg Xethalis, chief compliance officer at Multicoin Capital, and Collins Belton, founding partner at Brookwood P.C., dive into crypto regulation, discussing securities laws, DeFi regulation, and why the US should be promoting stablecoins rather than trying to shut them down. Highlights:

why the SEC and CFTC have not announced bigger crypto enforcement news at the end of their fiscal years
why the SEC is going after DINO (decentralized in name only) companies
what the Howey and Reves tests areand how the SEC uses themto determine whether an asset is a security or not
why Collins and Greg think the SEC has recently begun been applying Reves more often
why they think centralized crypto lending products should not be considered securities under the Howey test
whether new legislation needs to be written for cryptocurrency-based products
what makes Collins think the SEC is being “disingenuous” regarding the SEC registration process for crypto companies, like Coinbase
how regulators will end up handling DeFi and why both Greg and Collins are long-term optimistic
how the US government has a “great history” of respecting privacy and encryption
why regulatory pressure is likely to build up around centralized crypto exchanges and what we can learn from the EtherDelta case
why Collins thinks most cryptocurrency companies should be regulated
why the SEC is the best motivator for forcing protocols to fully decentralize
how smart contracts could theoretically be used to standardize SEC Commissioner Hester Peirce’s Safe Harbor proposal
how blockchain data makes cryptocurrency companies more transparent and easier to regulate than centralized entities
what Collins and Greg think will happen with stablecoin regulation going forward
why the US should be pushing to make dollar-pegged stablecoins more prominent

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Episode Links

Greg Xethalis

Collins Belton

Twitter: https://twitter.com/collins_belton
LinkedIn: https://www.linkedin.com/in/collins-belton-10226283/

Cases Mentioned

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How the Greatest Decentralizing Force for Crypto Projects Is the SEC - Ep.278 01:16:36 Share

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How the Greatest Decentralizing Force for Crypto Projects Is the SEC - Ep.278