On March 9, President Biden signed an titled "Ensuring Responsible Development of Digital Assets." (See prior .) Digital asset and crypto-enthusiasts hoped that this Order would open a process to rationalize the U.S. regulatory treatment on digital assets and maybe even loosen the regulatory reins to encourage development. (Note: SEC Commissioner Lee had previously described digital assets and an industry that had grown in defiance of existing laws and regulations.)…

According to the Executive Order, digital assets have implications for climate change, financial growth, financial inclusion, illicit finance, international engagements, democratic values, global competitiveness, and much more. The Executive Order tells us that the United States must be a "global leader [in the] development and adoption of digital assets and related innovation" but we must also develop very substantial regulatory systems.

In light of the above, the President is…

This FINRA request is very significant and should attract broad comment. It raises material policy issues including the extent to which federal securities regulation is to be transformed from a system based on disclosure, to one in which the regulators may effectively disapprove products that they do not like by imposing burdensome regulations on their sale, thereby, making them uneconomic.

As to broker-dealers, arbitration takes place under FINRA Rules that are approved by the SEC and that are intended to give investors substantial rights and the ability to bring claims without undue expense. As such, arguments against mandatory arbitration in the broker dealer context seem misplaced.