What is SEC?

Jason Yanowitz calls the SEC/CFTC crypto proposal a 'nothing burger' because it is agency guidance, not legislation, and can be reversed by a future administration.

“It can be reversed in a heartbeat. This is not regulation. This is not clarity. And so it's a nothing burger in my mind.”

The SEC's new crypto proposal is historically significant as the first fit-for-purpose federal token offering framework, but remains reversible agency guidance rather than durable legislation, meaning its practical impact depends on whether large non-crypto companies tokenize before a future administration can unwind it.

“We're talking about real live large companies with revenue and distribution who say let me figure out a way to use tokenization for part of my you know go to market part of my capital stack and go and issue a token in the US that is going to change the way people think about the world and if the world is different in two and a half years it doesn't matter.”

Jason Yanowitz notes that the old founder strategy of operating in the regulatory gray zone while saying nothing is now itself a risky path.

“Doing the thing but saying nothing is now a very risky path where in the past that was probably the only path.”

Jason Yanowitz argues that the DAT structure enabling hedge fund positions in projects like Hyperliquid is a far bigger market catalyst than the SEC crypto proposal.

“The ability for hedge funds to express their views on a project like hyperlquid is a big catalyst through this structure of a DAT. that's more impactful in my opinion than the SEC coming out by far and away.”

On why fully permissionless trading of tokenized equities is a regulatory non-starter.

“I don't think the SEC is about to say, "Yeah, we don't really care if you trade shares of Apple with Lazarus Group.”

The SEC has proposed eliminating NBBO rules 611 and 610, but finalization is expected to take a year or longer.

“They're going to eliminate this that's what the SEC has proposed. it's not going to be immediate it's going to take them some time probably a year or longer till it gets eliminated.”

The SEC's new crypto framework is notably silent on token cash flows, suggesting ongoing regulatory hostility to fee-switch or revenue-sharing token models despite other new flexibilities.

“My read is that the SEC sort of like has no problem in network demand tokens but the secure like the cash flow piece they have continue to have like they were silent on it so they have an issue.”

The SEC is changing securitization rules specifically for AI-related assets, a regulatory shift worth tracking for its implications on AI infrastructure financing and potential bubble dynamics.

“When I see headlines last week where the SEC is changing the rules around securizations for anything related to AI.”

Under the prior SEC administration, companies were penalized for disclosing too much, creating incentives to launch meme coins rather than assets with robust disclosure frameworks.

“Under the prior administration, companies were punished for disclosing too much. we had an environment where you know, the enforcement of our federal securities promoted companies or pushed them in or incentivized them towards the direction of launching things that looked more like meme coins rather than productive assets with the type of disclosure that Americans expect and international communities expect on a regular basis.”

Coinbase Advisor launched as the first SEC-registered AI investment advisor, a regulatory milestone worth tracking for AI x crypto convergence.

“First SEC registered AI investment advisor.”