The Lummis/Gillibrand Crypto Bill: Is the 'Ancillary Token' Approach the Best Way? - Ep. 361

Lewis Cohen, lead attorney at DLx Law LLC, joins to discuss the recently proposed Lummis-Gillibrand bill, the Responsible Financial Innovation Act, which he helped shape. In this episode, we cover: 
how Lewis was impressed by Gillibrand’s and Lummis’s offices’ hard work and bipartisanship  
how the bill creates a new definition for an “ancillary asset” with split oversight responsibilities between the CFTC and the SEC 
how the bill proposes a test of managerial centralization as a determinant of disclosure requirements for digital assets 
his response to criticism that the ancillary token approach is more complicated than need be and gives too much power to the SEC 
why the bill didn't adopt an approach more similar to something like SEC Commissioner Hester Peirce’s token safe harbor proposal 
how Lewis would respond to SEC Chair Gary Gensler’s contention that the vast majority of digital assets are securities 
how Cohen is concerned about legislation or regulation impinging on basic freedoms to transact by over-applying securities regulation
what kind of SEC disclosures will be required for “ancillary assets” and the requirements for projects to be able to cease mandatory disclosure
how the bill defines stablecoins
whether the requirement for stablecoins to maintain reserves means the end of algorithmic stablecoins or whether they will just be called something else
how the bill handles DAOs and how legislation in this area must be delicate
why Lewis believes the proposal is a “bright spot” for thoughtful US legislation and bipartisanship
why he doesn’t see the bill being adopted in the current Congress 
Thank you to our sponsors!
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EPISODE LINKS 
 
Lewis Cohen 
DLx Law LLC: https://dlxlaw.com/

Twitter: https://twitter.com/NYcryptolawyer 
LinkedIn: https://www.linkedin.com/in/lewis-cohen-a3211410/

 
Lummis-Gillibrand Proposal (Responsible Financial Innovation Act) 
Legal Memo from DLXLaw : https://dlxlaw.com/wp-content/uploads/2022/06/DLX_FSV-summary_RFIA_060722.pdf

Lummis-Gillibrand Section by Section Overview (summary by bill authors): https://www.gillibrand.senate.gov/imo/media/doc/Lummis-Gillibrand%20Section-by-Section%20%5bFinal%5d.pdf

Responsible Financial Innovation Act (full text): https://www.gillibrand.senate.gov/imo/media/doc/Lummis-Gillibrand%20Responsible%20Financial%20Innovation%20Act%20%5bFinal%5d.pdf

Blog post intro (by Senator Kirsten Gillibrand) : https://gillibrandny.medium.com/the-responsible-financial-innovation-act-218a764abd6c

Commentary:
CoinDesk recap: https://www.coindesk.com/policy/2022/06/07/key-us-senators-introduce-bill-outlining-sweeping-plan-for-future-crypto-rules/

Fortune on what the bill means for algo stablecoins: https://fortune.com/2022/06/08/algorithmic-stablecoins-terra-luna-crypto-regulation-senate-bill-lummis-gillibrand/

JW Verret's critique: https://twitter.com/JWVerret/status/1534165678831325191?s=20&t=nIWYdZKJzXsr-SVK7F_W9w

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