Blog by Bill Singer Esq WEEK IN REVIEW

September 10, 2022
As securities lawyer Aegis Frumento sees it, we need a new kind of regulatory structure for cryptoassets. Some cryptoassets are currencies. Some cryptoassets are commodities. Some cryptoassets are utility tokens. In what seems something akin to a Zero-Some Approach, however, the SEC is trying to have all of the aforementioned "somes" deemed securities-by-default. Clearly, the SEC is marking what it sees as its rightful territory; but, as Aegis Frumento argues, our present securities laws can only be stretched so far before they will shred and fail to offer any meaningful investor protection.
Today's traveling regulatory circus makes its way back to FINRA's fairgrounds. The tents will be raised yet again. The lawyers hired. The festivities will begin. And then, after the tents come down and the animal shit swept up, yet again, this whole carnival will likely wind its way back to the SEC and, who knows, maybe back to the 9Cir. By that time, if past is prologue, maybe another five or so years will have come off the calendar. And who knows how many tens-of-thousands of dollars in legal fees will be paid by Respondent for a second bite at a rotten appeal. And who knows how much otherwise valuable regulatory time at FINRA and the SEC will be wasted on this nonsense. For the sake of argument, let's say that Respondent likely engaged in some misconduct and will likely find himself barred for something when this is all said and done. The question that I raise, like the aforementioned circus tents, is what is the consequence for FINRA's misconduct in failing to render an intelligible decision? What sanctions (likely none) will the SEC impose upon FINRA for not saying what it meant, and not meaning what it said? Of more import, how does this failed system of self regulation protect the public and the industry?