Barr Questions Witnesses at Hearing on the Future of the Digital Asset Ecosystem

Mr. Garrison and follow up with Mr. Kaplan’s testimony it seems that Mr. Kaplan is making the argument that everything except Bitcoin is a security. I want you to amplify your testimony in reference to this or what I think is Mr. Kaplan’s testimony.
In your written testimony you talked about how the application of existing security laws, Mr. Kaplan says are perfectly applicable in this new innovative marketplace that the application of these existing security laws to digital assets is not always clear and amplify your analysis of how how we doesn’t really cover everything in the current modern world.
Yes, so we’ll start with the statute with the analysis of what is a security statute is quite clear in the list of list of instruments digital assets are not there. So then the question becomes, is it an investment contract? The Supreme Court in the Howey case before the tenancy contract transaction scheme it was an investment.

Common enterprise the reasonable expectation of profit from the essence of others is the security now a digital asset at times and in fact, suited to an investment.
That does not mean that the digital asset itself evidence is security for all of time.
That set of promises and may have been launched of a project is getting off the ground to developing the network for the first time and raising money to do that.That’s selling a token pursuant to an investment contract.

But over time tokens operate differently. They’re not equity securities. They’re not your traditional stocks or bonds or notes. People purchased them for a number of different reasons, but one of the reasons is, they want to use it on the platform itself on the network itself. So at some point in time, when the network is fully decentralised, decentralised, fully functioning, that digital asset does not bear the characteristics of the security and the application of securities laws, is so overly burdensome to render the use of the network.

So in summary, what do you make of Mr. Kaplan’s argument that existing securities laws are all we need?

I disagree with your position. I think it’s securities laws are a piece of the puzzle. But I think there’s a large piece of the puzzle that is missing. Let me follow up with a question about custody. It’s essential for any market structure lead legislation to set rules for the custody of digital assets so that consumers can have confidence that their digital assets actually are where an intermediary says they are digital assets raised several novel issues when it comes to custody that must be addressed. Mr. Garrison would you discuss some of the key questions when it comes to the application of the SE C’s requirements for custody of digital assets?

So the expected custody of digital assets in a number of different questions relating to the intermediaries, they hold digital assets typically broker dealers and that’s Investment Advisors. Generally one of the questions that comes up, demonstrate as a digital asset, where digital assets work is you have private keys and of course, the private key that you shared with others and may be charted or put in different fluids. So a lot of securities regulations or debates going on in the circulation was how do you actually show exclusive control? Now the industry has a number of solutions do they think is sufficient? And the SEC has been talking about it and refusing to come up to a conclusion since I want to say about well, here again, the status quo is unacceptable. It’s stifling innovation. The banks tell us that.

Mr. Coy Garrison

So interesting and good news for crypto in the USA if you like to see this part of the hearing you can see this video –>Barr Questions Witnesses at Hearing on the Future of the Digital Asset Ecosystem – YouTube

For the full hearing you can watch this video —> The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem (EventID=116085) – YouTube