Anne Kelley

The end of an era. Markets, investors, and the Commission are losing one of the most thoughtful and courageous voices we have had. @HesterPeirce was a tireless public servant. I was fortunate to work with her for over 20 years-when she was SEC staff, and again when she was Senate Banking staff as we worked on Dodd-Frank. I later had the privilege of shepherding her nominations through the Senate and of working with her as a Commissioner. Principled. Dedicated. A kind-hearted good human — a sometimes rare combination in DC. Thank you for your service, Commissioner Peirce. You will be missed. Your students at Regent are lucky to have you. But I know you’re going to do so much more and look forward to continuing to work with you.

Old Hill saying: if everybody’s a little disappointed because they got something — but not everything — it’s probably a good bill. Today’s reports on CLARITY sound like that. DeFi gave a little on BRCA. The President gave more on ethics. Banks got something on yield. Democrats got a little more on ethics. Nobody ran the table. Not perfect. But if it passes, one of the big wins is for consumers: crypto exchange accounts would finally be bankruptcy-protected. They aren’t now. I don’t know about you, but I want the crypto in my account to stay mine — not get used to pay off an exchange’s debts if it goes bankrupt. A lot moved in 24 hours. We’ll know at 2:15 — and remember, that’s just the first step toward final passage. Lots more to go.

On September 22, I will be speaking at @GBBC_ios 9th Annual #BlockchainCentral UNGA, taking place in New York City in partnership with @DLA_Piper, to discuss how we can leverage blockchain-powered solutions to accelerate progress towards the @UN #SDGs.    Learn more: gbbcblockchaincentral.io/

The SEC has put out “Regulation Crypto” sec.gov/files/rules/proposed…

Important level-set: The Constitution gives Congress alone the power to write laws. Congress, in its wisdom, then delegates authority to agencies like the SEC to write rules that implement those laws. Tomorrow’s open meeting would have been only the first formal step in a proposed rulemaking—not a final rule. That process includes public comment (where members of Congress regularly weigh in) and typically takes months. The Commission can advance rulemaking in different procedural forms—open meetings, seriatim consideration, interim final rules in limited cases, or guidance—but substantive rules still must follow the APA. If CLARITY advanced during that time, the agency would NOT have to start over. It could adjust the proposal through a Supplemental Notice of Proposed Rulemaking (SNPRM) and continue building on the existing work. Even if CLARITY passed tomorrow, the SEC and CFTC would still have to write the implementing rules. That is a months-long process at best. GENIUS was passed a year ago and still has not been fully implemented for the same reason. There is no instantaneous solution. Rules that last and survive judicial review have to follow the APA. We should want them to and this should not be the SEC vs Congress, they work in tandem.

Important context: Friday’s open meeting is solely to consider whether to propose a tailored offering regime for certain crypto investment contracts — the first formal step in the rulemaking process. Under the traditional notice-and-comment process, a proposal would be followed by a public comment period, economic analysis, potential revisions, and a separate final vote. Historically, significant SEC rules have often taken roughly 12–18 months from proposal to adoption (though interim final rules or temporary exemptive relief remain possible in appropriate cases). This is still welcome progress. It shows the SEC is moving forward rather than waiting for Congress, and is prepared to work in tandem with legislative efforts. The Commission clearly recognizes that the crypto industry needs clear rules and cannot operate indefinitely in a vacuum. Constructive engagement from industry and investors during any comment period will matter.

Great reporting by @ElleBeyoud on the ethics addendum under negotiation for the Clarity bill. The reported forced divestiture provision could actually create a meaningful tax advantage for covered government officials — the ability to defer capital gains on crypto holdings — that could help unlock a quick ethics agreement between the White House and Congress. 🤞Looking forward to seeing the full text and how/if this moves the ball forward. bloomberg.com/news/articles/…

This is a great synopsis of all the things that need to be done in accordance with Senate procedure before the Senators leave for their district work period.

Realities of CLARITY Act expectations and Senate Rules and Math: Senate floor time is the most valuable commodity in Washington. The Senate is scheduled to leave August 7 — leaving roughly two weeks. Under Senate Rule XXII, once cloture is invoked on a major bill, that measure becomes the unfinished business to the exclusion of all other business until it is disposed of. You generally cannot advance other contested legislation at the same time. Even nominations require unanimous consent to interrupt (meaning every single Senator must agree — one objection blocks it). That’s an important constraint on what else can move. That means hard choices on priorities have to be set for the larger agenda. Major bills that could come to the floor in this short window include CLARITY, the SAVE Act, a Russian sanctions bill, budget-related legislation, or the NIL bill, ect. Choosing to advance any one of them will come at the expense of the others, because the Senate can effectively process only one major contested measure at a time. Even if CLARITY were brought up today, the procedural steps — cloture → amendment process → second cloture → up to 30 hours of debate — make finishing before recess extremely difficult without UC agreement to waive process, which is rare on contested bills. I know many people are disappointed it won’t clear by early August. That does not mean CLARITY is done for the year. The bill includes critical protections for everyday crypto users. If a crypto exchange goes bankrupt, customers’ assets are currently at risk of being treated as the exchange’s property and used to pay off the company’s debts — leaving regular people with nothing. CLARITY’s bankruptcy remoteness provisions help prevent that outcome and keep customers’ crypto from being swept up to satisfy the exchange’s creditors. That real-world protection is one of the core reasons this legislation matters. Having the text out for people to read and digest over the recess, while the hard-working Senate staff continue building toward consensus, can still set up quicker movement in September. Every step is progress.

Honored to moderate “A Balancing Act: Growth & Compliance” at GBBC USA’s Blockchain Central on Risk. Compliance. Security. Grateful to our outstanding panelists from the SEC Crypto Task Force, Droit, Elliptic, and Chainalysis — for their candid insights. Some of the topics we covered: balancing innovation with compliance, what comes next if CLARITY doesn’t pass, and why the industry must proactively engage with the SEC to better inform their understanding of fast-evolving digital asset developments. Essential dialogue for the industry’s future. #Blockchain #GBBC #CryptoRegulation #CLARITYAct #DigitalAssets

Excited to be speaking at #BlockchainCentral: Risk. Compliance. Security. hosted by Global Blockchain Business Council (GBBC) @GBBC_io, June 8–10 at The George Washington University Law School in D.C.! Request an invite or to join the live stream: gbbcblockchaincentral.io/ Honored to join a very distinguished list of speakers for insightful discussions on RegTech, AML/KYC, the GENIUS Act, quantum security & more. #Blockchain #DigitalAssets #RegTech #CyberSecurity #crypto

Clarity Act passage before August recess just got more challenging. I tell my clients that the most valuable commodity in Washington, DC is Senate floor time — and I always run the “Senate math” to figure out if we have enough floor time for passage. Reconciliation to end the TSA shutdown being pushed into June reportedly because it now includes ballroom funding and the $1.8 billion anti-weaponization fund adds a new challenge to getting the Clarity Act done before recess while it competes against the housing bill, nominees, and possible supplemental war funding ect.

Clarity Act passage before August recess just got more challenging. I tell my clients that the most valuable commodity in Washington, DC is Senate floor time — and I always run the “Senate math” to figure out if we have enough floor time for passage. Reconciliation to end the TSA shutdown being pushed into June reportedly because it now includes ballroom funding and the $1.8 billion anti-weaponization fund adds a new challenge to getting the Clarity Act done before recess while it competes against the housing bill, nominees, and possible supplemental war funding ect.

Dodd Frank required the SEC to fund its operations almost entirely through Section 31 fees on “covered sales” of “covered securities”. These are transaction-based fees paid only by covered SROs (exchanges and @FINRA) — scaling directly with market volume — and are usually passed on to customers along the way. The statute and Rule 31 make this obligation clear: each covered SRO must pay the SEC a fee based on the aggregate dollar amount of “covered sales” on their venue (or through their members for FINRA). The @SECGov does not bill broker-dealers, clearing firms, or investors directly. That makes the upcoming “innovation exemption” for tokenized stocks especially fascinating. Per Bloomberg, a framework is coming soon for trading crypto versions of public equities on blockchain/DeFi platforms — enabling 24/7 trading and instant settlement. But how does it interact with Section 31 fees? If tokenized securities get carved out or treated more lightly (and trade outside traditional SRO venues), we could see a two-tier system: traditional stocks carry the full passed-on fees, while tokenized versions get cheaper all-in costs for the same exposure. Would liquidity and volume migrate? Crypto’s efficiency advantages could accelerate the shift — but that shrinks the SEC’s fee-paying base. Is the agency incentivizing cannibalization of its own funding? Should the SEC require tokenized securities to trade through SROs so they qualify as covered sales and continue generating Section 31 revenue? Pivotal moment. Innovation clearly wins for investors, but revenue implications might matter — Congress sets the SEC’s funding levels and could increase its funding even if the fee base erodes. Would it be smart for the SEC to bring as much tokenized volume as possible under their fee regime? Thoughts? Bloomberg: bloomberg.com/news/articles/… #TokenizedStocks #SEC #Crypto #Section31 @pattersonscott

The SEC has released NYSE’s filing to amend its rules and enable trading of securities in tokenized form during the DTC tokenization pilot. Eligible securities (starting with Russell 1000 components & major ETFs) can clear & settle on blockchain while trading on the same book. Full PDF: sec.gov/files/rules/sro/nyse… #Tokenization #NYSE #SEC

There is @SteaknShake in the Rayburn Congressional Office Building. Does this mean the Congressional staff and Congress will be able to buy their lunch with Bitcoin?