Hester Peirce with another banger “Today society is at a crossroads. Down one path lies the status quo: more data collection, more intermediary surveillance, more “know your customer” requirements that turn our financial rails into a panopticon. Down the other path lies an opportunity to use new technologies to improve our ability to catch criminals while collecting less personal information than ever before, and monitoring more sparingly to protect Americans’ privacy.”

a lot happened behind the scenes on clarity. most i’ll never say bc good people on both sides stuck their necks out but the fact that this wsj story only has 1 industry source on the record to substantiate its core claims of “blame game” should tell you all you need to know 🙄

Freedom Tech DC kicks off THIS WEEK. A summit on the future of money, speech, and intelligence — and the fight to keep them free. We're gathering the builders and the regulators with one purpose — to encourage Washington to embrace open source technology. Stream both days live on X from @bitcoinpolicy, plus YouTube and Rumble. Tuesday, September 22 at 10:00 AM ET. Wednesday, September 23 at 9:00 AM ET.

“The Clarity Act was never going to be the end of this work. It was always going to be the start of it. We may have lost the vote, but we didn’t lose the argument.” my thoughts on the failed clarity vote and where we go from here

The BRCA news. The Liquid hack. An update from Bitcoin Red Team. All this (and more!) in tonight's Coin Based, brought to you by @AnchorWatch. Featuring... @Rob1Ham @intangiblecoins @arbedout @tpacchia Click below to watch the stream.

i read this post below from @JohnReedStark and he's completely wrong on a number of the points he makes about the innovation exemption, and i can't help myself but rebut them after reading the order this morning john writes that it allows third parties to create "tokens that track the price of any public stock" with "no firm guarantee of voting rights" "no dividends" and "just a digital wrapper around a stock you don't actually own". we care a lot about the difference between issuer-sponsored tokenized securities and third party wrappers. (tokenized $GLXY is an issuer-sponsored tokenized security.) but the instrument john describes is basically the one thing the innovation exemption specifically forbids SEC release no. 34-106402 (the "innovation exemption") defines "Tokenized NMS Stock" and then expressly excludes "securities where a third party issues a crypto asst representing its own security that provides synthetic exposure to an underlying security, such as a tokenized linked security or a tokenized security based swap." price tracking wrappers that don't convey ownership are outside the exemption -- not lightly regulated, not permitted. excluded. atkins listed this under the heading "No Synthetics" in his own statement. it's not some buried technicality. by my read, it's actually a headline design feature that would disqualify most of the offshore tokenized-equity products that have been trading for the last year the release requires the tokenized venue to verify that the token "provides holders the same rights and privileges as does traditional NMS stock of an equivalent class". for the third-party wrapper, the order goes further. the wrapper must distribute or make available to token holders any related proxy materials an other issuer communications "at no cost to the issuer or the shareholders" so dividends are required, voting rights are required, proxy distribution is required etc. john's statement that "no firm guarantee of voting rights. No dividends" is the opposite of what the text says. not sure why john would write all these words without seeing the text, but in any case, his words are false john also says there is "no issuer consent required." actually the order gives issuers a unilateral veto. before a venue can list a third-party wrapper, it must send written notice to the issuer and give the issuer 30 days to opt out. it's true that this is an opt-out rather than opt-in -- i think there's been some controversy over this, but in any case, issuers can unilaterally veto john also argues that these stock tokens will trade on "largely unregulated DeFi platforms". but a venue relying on this exemption must: - be a US person - comply with OFAC sanctions - permission every single participant in the pool with identity verification - keep records of the screening methods and wallet-to-address participant mapping - publish a thirty-item public notice 30 days before it opens, in plain English - notify the SEC within one business day - give 20 calendar days advance notice of any material change - halt trading in a token concurrently with any halt or suspension of the underlying on the primary listing exchange - cannot borrow, hypothecate, permit hypothecation, and cannot extend any credit to buy - cannot host any primary issuance - keep books and records in the US for the term +3 years and produce them promptly in human readable and usable electronic form - and must "consent to examinations of its books and records by the Commission staff at any time section 10(b) and rule 10b-5 apply in full.. the order says so twice reasonable people can disagree or argue that this isn't *enough* regulation. but nobody who has actually read the order or these conditions can call it "largely unregulated" john also argues that these venues will "siphon liquidity" and function like "opaque, dark pools". this is absolute nonsense. the volume caps are 0.25% or 2.5% of traditionally listed prior month volume.. a quarter of one percent of volume in up to 75 names is not a liquidity drain. also not "opaque" -- far from it. a venue under this exemption must publish every transaction (symbol, price, size, UTC timestamp, direction) free and publicly in machine readable form within 10 minutes.. and publish a ton of other stuff. totally transparent -- arguably more so than trading on a national securities exchange maybe the most misleading thing that john writes is comparing it to stream finance.. stream was a catalog of failures modes that this order addresses one by one.. stream was a CeDeFi hybrid, an onchain token whose assets were managed offchain by an outside trader with no formal relationship to the project, under a pseudonymous operator taking a 35% fee share. the ~$93m loss happened offchain and stayed invisible onchain for weeks because lending markets hardcoded xUSD at a $1. roughly $160m in deposits were levered into a claimed half-billion of assts.. xUSD was re-hyped as collat across morpho, euler, and silo, which is how the hole grew.. ALL OF THIS IS PROHIBITED UNDER THE ORDER: - leverage prohibited (no borrowing secured or unsecured, no hypothecation, rehyping prohibited) - offchain opacaity -- venue must describe all offchain functionality and where in the trade lifecycle it is used, and must publish transaction and pool data every 10 mins - price concealment: impossible when the underlying has a continuous public reference price - pseudonymous control -- venue must be a US person with published contact details, disclosed ownership and governence, and named holders of contract upgrade and pause authority - customer assets; any Covered Firm "must not hold or custody customer assets" - no yield products allowed STREAM IS AN ARGUMENT *FOR* THE CONDITIONS INCLUDED IN THE INNOVATION EXEMPTION (john has it backwards) john is correct that this is a section 36(a)(1) exemptive order, not APA notice-and-comment rulemaking. the commission chose this over a proposing release -- that's a legitimate process objection.. but we need some time to try and find out pain points before formal rulemaking is proposed, and we support that route. and while this is not APA notice-and-comment, the idea that the public hasn't been consulted is patently false. the SEC has graciously welcomed hundreds and hundreds of meetings with the crypto task force; it held an april 2025 roundtable about this specifically, and it is actively soliciting comments from the public on the order. beyond that, there have been dozens and dozens of meetings between interested stakeholders and the commission.. everyone involved in advocating for or against this has been widely heard, and continues to be heard i could go on and on. it's important to tell the truth when debating complex issues. calling the innovation exemption "dismantling 90 years of market structure" simply doesn't survive a plain reading of the document. nothing is repealed. reg NMS still governs the NMS market. exchange and ATS regulation is unchanged for everyone not operating on one of these venues. this is a 5 year, conditional, symbol capped, volume capped exemption from two statutory definitions, with an open comment file designed to eventually inform permanent rulemaking we are excited for the innovation exemption precisely because this SEC is acknowledging demand from the public to innovate capital markets and giving innovators space to try, under their watchful eye, before prescribing rigid rules

Thank you @SECPaulSAtkins @HesterPeirce @MarkUyedaUS for leading on digital asset policy !!! Innovation exemption moves tokenization ahead. Proud to be first on Nasdaq to tokenize shares. More to come with tokenized $GLXY !

📜 new CLARITY act text dropped last night. two big things stand out: the ethics sunset has been deleted entirely. the ban is now permanent, broader, and enforceable by state AGs and what appears to be a big compromise on BRCA.. all refs to 18 USC 1960 are GONE

🚨💧 LIQUID HACKERS RETURN 85% OF STOLEN BITCOIN TO LIQUID FEDERATION after a lengthy conversation with blockstream via OP_RETURNs, in block 965,950 hackers sent 3400 BTC back to the original Liquid Federation address, apparently keeping 598.5 BTC (~$47m) for themselves (15%)

💧 LIQUID WHITE HATS SAY THEY’LL RETURN ‘MOST’ OF 4000 BTC ONCE LIQUID NETWORK BUG IS PATCHED the hackers have been conversing with blockstream via OP_RETURN messages and PGP encrypted text - block 965,822 blockstream address sent 1,000 sat with "Please contact security at blockstream dot com" - block 965,865 an encrypted message addressed to the holder's own key, with a detached PGP signature. that signature verifies against the key published at - block 965,869: the hacker replied by self-spending their own balance but sending 1,000 sat to the federation's peg wallet and the text: "sending most back to [the federation address], is that ok". - block 965,875: substantive answer. again a self-spend, with 1,000 sat peeled to the federation and an OP_RETURN reading: "Please fix the bug first. The chain is under risk at latest commit right now. Make sure every node is patched. Then we will transfer the money back safely after confirming the fix." technical detail follows as a PGP message encrypted to Blockstream's published key, so only Blockstream can read it interesting back and forth here. never a dull day in bitcoin

ALL EYES ON BTC’S 50W MOVING AVERAGE every time BTC reclaimed the 50w MA in a bear market, the first time it retook that 50w the bottom was “in” 50w MA is currently $81.8k (will be ~$81.1k on sunday). retaking it historically has heralded the end of a bear can we get there?

📊 updated numbers on coldcard exploit 8865 addresses lost 1789.28 BTC worth $114.7m at the time of theft ($138.8m today) - loss by address median 0.00152 mean 0.20184 dormancy median 3.2yr dormancy mean 3.6yr - loss by victim reports (221) median 1.04272 mean 3.57792 dormancy median 3.25yr dormancy mean 2.99yr victim reported loss 790.72 (44.2% of total) if we expand to include medium confidence losses (not yet confirmed) the total loss is 1,824 BTC ($140m at the time of loss)