Good morning, ladies and gentlemen, and thank you for the invitation to join you at this year’s Digital Asset Summit.[1] I am delighted to be here, especially on the close heels of what was, by any measure, a historic week for America’s digital asset markets.
There is much ground to cover and little time to spare. So, I will keep my remarks brief to allow maximum time for discussion with Elad [Roisman]. But first, let me take just a few moments to describe some of what the SEC has done in recent days to deliver long-overdue clarity to our crypto asset markets.
As many of you know firsthand, market participants have operated in a state of persistent, often crippling uncertainty around one fundamental question: when does a crypto asset implicate the federal securities laws? Last week, the SEC took a decisive step toward answering that question by publishing a token taxonomy and interpretation of Howey that draws clear lines in the sand and definitively states our view about the outer bounds of the agency’s jurisdiction.
More particularly, our framework clarifies the contours of an investment contract and distinguishes between five categories of digital assets, four of which are not securities. We have also begun to chart a path of compliance for entrepreneurs who seek to understand when the fundraise for a crypto asset implicates the federal securities laws. Taken together, the SEC’s actions return the Commission to its core mission—and its statutory authority—of protecting investors involved in securities transactions. In short, they help to ensure that we are no longer the Securities and Everything Commission.
Now, as transformative as I expect these steps to be, I should also like to make clear that our interpretation is not an endpoint so much as a foundation.
Milestones like this one can tempt us to think that we have tackled the hard questions. But that would mistake progress for resolution. In light of last week’s interpretation, I am reminded of the Churchillian refrain that “this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” Because while the clarity that we have delivered is essential, it is scarcely sufficient.
After all, only Congress can future-proof regulation in this space through comprehensive market structure legislation. And as lawmakers consider broader reform to guard against rogue regulation, the SEC is doing exactly what it can and should be doing by providing clarity about the proper boundaries of our jurisdiction within existing law. By hastening the end of the beginning, as Churchill would say.
Now, the work ahead merits a fuller discussion than my opening comments allow. So, I want to move to my conversation with Elad so that we can discuss these issues in greater depth. Elad, I look forward to a thoughtful exchange. And I thank you all once again for the privilege of participating in this year’s summit. Thank you.
[1] The Chairman’s views expressed in these remarks do not necessarily reflect those of the SEC as an institution or of the other Commissioners.
