By forcing the clearing mandate on non-US banks engaged in transactions with non-US counterparties, the SEC may be betting that the clearing mandate will not discourage foreign participation in the US government securities market. If the SEC is wrong, then the cost of financing the US debt will increase.  

There is no compelling reason to think that the SEC is right. In fact, it's a rather remarkable bit of risk taking. And it's hard to see any compelling upside. 

Although the SEC could still appeal to the Supreme Court, that it is not asking for a rehearing before the Fifth Circuit would seem to indicate that it is resigned to the defeat. Further, it may be reasonable to question whether the SEC would want to antagonize the private fund industry further in the period immediately before an election.  

As previously argued, (see reprinted comment below,) this is not a case of the SEC doing the right thing for the wrong reason: it is the SEC doing the right thing for no reason. That the SEC would reverse its position on whether Ethereum might be a security without either any explanation of its reasoning or any explanation of its determination that Ethereum is not a security (while maintaining that other crypto assets are securities) is a dereliction of its obligations.

–(the date the…

With regard to the issue of preemption, referred to in his speech as "polarization," the following comment by Mr. Hsu is notable: "To varying degrees the culture wars, identity politics, and weaponization of finance are pushing toward greater and greater fragmentation of the U.S. financial system. Increasingly banks are being asked by states to pick a side in service of performative politics rather than deliberative policy."

The clear implication of this is that it is the States that…