In a recent government meeting, discussions centered on the challenges faced by regulated brokers in dealing with digital assets, particularly in light of current SEC regulations. Witnesses highlighted that existing custody, net capital, and customer protection rules do not accommodate the blockchain infrastructure, necessitating new rule-making to facilitate the registration and oversight of digital assets.

One witness suggested that, in the absence of new legislation, the SEC could utilize Section 36 to create a tailored registration regime that would address the fundamental requirements for oversight, including registration and record-keeping. This approach aims to bridge the gap between current regulations and the unique characteristics of digital assets.

The meeting also addressed the SEC's ongoing enforcement actions in the cryptocurrency space, with a notable statistic indicating that since 2013, the SEC has pursued 173 crypto-related cases, with 100 of those involving fraud. Concerns were raised regarding the crypto industry's tendency to evade accountability by claiming decentralization as a defense against SEC rules.

A specific focus was placed on the World Liberty Project, a new decentralized finance (DeFi) initiative promoted by a former president. Questions were raised about the project's governance token structure, particularly the allocation of 20% of tokens for team compensation, which includes members of the Trump family. This allocation raised suspicions due to its similarity to regulatory language concerning ownership thresholds and decentralization.

The discussions underscored the urgent need for regulatory clarity in the rapidly evolving digital asset landscape, as stakeholders seek to navigate compliance while fostering innovation.