For the last year, Senators Elizabeth Warren (D-MA) and Sherrod Brown (D-OH), and the heads of each of the major financial regulatory agencies, have decried the risks that they perceive in the use of digital assets. Significantly, Senators Kristen Gillibrand (D-NY), Debbie Stabenow (D-MI) and Cory Booker (D-NJ) have each proposed legislation to facilitate the development of digital asset markets. Senator Hickenlooper's remarks draw attention to the differences between these positions…

Notwithstanding the number of FINRA rules that may be expanded in scope, as a practical matter the effect on firms should be limited. That said, firms should review carefully both the rules and their business practices, as there will be some impact. For example, firms should consider whether there are new employee registration requirements applicable to employees engaged in distribution activities with respect to government-sponsored enterprise securities.

It is hard to imagine a non-arbitrary argument for permitting the listing of a bitcoin-futures fund, but not of a bitcoin fund. (See also .)

Mr. Hsu's observation that crypto assets are very different from non-crypto assets contradicts SEC Chair Gary Gensler's position that crypto assets are no different from other securities and that "like must be treated as like." Mr. Hsu warns, quite rightly, that there really are differences and that financial regulators should be thinking through those differences.

That said, Mr. Hsu's statement that crypto assets must be absolutely separated from the traditional banking systems seems…