1) I lived under the regime of the #SEC for 25 years as an investment banker. So what I am about to tell you is nothing new to me. Every member of the securities industry can corroborate and every securities lawyer with integrity can back these statements.
2) DISCLAIMER: Before you proceed, you must know that I am not a #securities lawyer, and this is not legal advice. In addition, these are only my own opinions.
3) The SEC designs rules that makes them "operatively contagious", like a virus. If Im sick and I touch you, you get sick. To understand what this means one first MUST understand the term #Gatekeeper as it is has been commonly used in the regulatory community.
4) The term gatekeeper is used to describe a cog in the hierarchical and interlocutory wheels of the SEC's regulatory architecture. #Gatekeepers are #banks, #brokerdealers, #custodians, asset managers, #exchanges, transfer agents, #lawyers and #accountants.
5) They are formally responsible for enforcing SEC rules. All employees are issued, are required to read, understand, retain and #COMPLY WITH the written supervisory procedures manual of each of their respective employers in the securities industry.
6) The #ESMA and most other established regulatory jurisdictions work the same or in a similar way.
7) #GaryGensler's repeated public statements about 90 year old #public #policy is an intensifying narrative based on well settled law. I will spare you the additional citations. You have seen and heard them all.
8) In SEC v @DiaryofaMadeMan At that point, their ETH contributions were validated by a network of nodes on the Ethereum blockchain, which are clustered more densely in the United States than in any other country. As a result, those transactions took place in the United States".
9) This controversial claim supports a #jurisdictional argument but its implications are far reaching if SEC prevails on this specific claim. Everyone knows that the SEC can assert #jurisdiction anywhere in the world by virtue of the #contagious nature of SEC law.
10) In other words, if a speck of dust ends up in the wallet of a US person, SEC can assert jurisdiction over the token issuing entity and/or the persons that played a role in the development, #deployment and distribution of that #token.
11) Ethereum's move to #PoS is less about sustainability, throughput and cost. Public statements indicate that gas fees wont be declining anytime soon. #ESG and #sustainability are a critical public interest issue and are a fulcrum for the move.
12) The SEC is pushing to mandate sustainability reporting by public companies and gatekeepers heavily promote sustainability to gain marketing favor and shape public opinion.
13) #TheMerge is about moving #blocks creation and the validation of transactions, smart contract deployments and call functions to SEC Gatekeepers who can afford the 32 #ETH required to run a validating node AND who are already well prepared to enforce compliance with SEC rules.
14) If you believe that #Web3 "Internet of Value" is here to stay AND believe that institutional adoption is occurring or will occur, then you MUST hold that the majority of the #ETH at stake will be custodied by regulated gatekeepers.
15) This means that proof of identity AND of securities law compliance will be needed in the payload submitted for validation. Without it, validators will be forced BY #LAW, to refrain from validating activity that...
16) may likely be seen as directly or indirectly engaging in the issuance and distribution of unregistered, non-#exempt #securities. This includes bridging activity to and from Ethereum Mainnet. .
17) Think about this long and hard. The SEC will provably testify before the #Senate Banking Committee that they are an efficiently run agency acting in the public interest by (i) continuing to fund their budget through fines for crypto violations,
18) (ii) The Merge solved the crypto compliance problem, (iii) they did it with no new legislation from Congress and (iv) should be allocated a budget increase for a public narrative turning public opinion of the SEC back in their favor.
19) 80% of securities law #compliance for issuers is financial and operational disclosure. This does not mean token issuers must file full blown S-1s, 10-Ks and 10-Qs with the SEC. There are exemptions to securities registration.
20) There are also different levels of financial disclosure compliance required based the exemptions claimed but you WILL need to articulate financial and operational state in #USGAAP and/or #IFRS, FULL STOP.
21) This requires the counsel of an "honest lawyer" and the assistance of a skilled #CPA or #CharteredAccountant.
22) @Auditchain offers solutions for financial disclosure in #Web3 using its "Luca" for financial #disclosure composition, and #Pacioli for internal testing and audit, which are part of the Auditchain #Protocol: the world's first Web3 financial disclosure infrastructure.
23) Ethereum is the clear winner for #transformation in the next era of sustainable growth for the $100 trillion global financial services industry. Mass adoption MUST be accompanied by the well financed #gatekeepers on the front lines of regulation.
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