Feedback on DA Policy Proposal

[akk45]

1. Feedback on Separate Framework:

• All digital assets (DAs) shouldn't be defined as "financial assets." A fungible token would be a financial asset but a non-fungible token (NFT) probably should not be defined as such. The corollary is we do not consider art a financial asset in real life even if it can store value.

• On the substance, a separate framework sounds good in theory but it's extremely difficult in practice because of the "bundle" of legal interest concerned (e.g., Property, IP, Privacy, Safety & Soundness, Consumer Protection, Transparency, AML, etc.), especially if DAs are defined comprehensively (e.g.: FTs, NFTs, Avatars, Health Info?, etc.).

• And you'd have to carve out current regime/institutions' powers and stand up a new one, as you all alluded to (See CFPB woes). You'll need technologists/Lawyers/Policy makers that thoroughly understand thestill nascent and evolving space to regulate all digital assets on the DL/Blockchain.

2. Feedback on Single Regulator for MDAs:

• Generally agree with establishing standards for marketplaces for financial DAs. But as mentioned above, the space for digital assets is more encompassing than a simple marketplace. Some of the "spaces" will exist to share/display ideas, collaborate, etc.

• A SRO should be established until single regulator is sorted out; but until then, the SRO can work with all the (federal and state) regulatory bodies to ensure a single framework is agreed upon to govern all digital assets (or financial DAs if that's the focus now). It should be apparent that the rules for fungible tokens should differ from the rules for NFTs.

3. Feedback on 3 Goals New Framework Should be Guided By:

• Generally agree with 3 goals; think goal 1.ii regarding flexible disclosure requirements allowing for applicability to a wide range of digital assets is instructive. That said, scope of this rule should probably be limited to "financial DAs" (aka fungible tokens).

4. Feedback on Interoperability and Fair competition: Agree with both bullet points.