As I testified before the House Financial Services Committee in March, the SEC needs to update its approach to broker-dealers so they can fully support capital markets as they move onchain.
We are delighted to see our onchain-first approach to brokerage services fit within the US regulatory architecture.
Broker-dealers will continue to play an essential role as the trusted perimeter into U.S. securities markets, particularly in onboarding users moving onchain. This is in addition to key protections of US securities laws, ensuring robust disclosures and op and cyber risk management among many other things. The role of the broker-dealer continues to be affirmed under the Atkins SEC.
@Citi estimates that stablecoins will grow 6-12x, to $1.9t-$4t by the end of the decade. Those stablecoins will need a compliant way to earn yield and invest in compliant, regulated infrastructure. We're building for that future.
Now it is time to build that future in America alongside @ThatAlexPalmer @chriseyin @teddyP_xyz and the Kimber Labs (Plume) team.
We are delighted to see our onchain-first approach to brokerage services fit within the US regulatory architecture.
Broker-dealers will continue to play an essential role as the trusted perimeter into U.S. securities markets, particularly in onboarding users moving onchain. This is in addition to key protections of US securities laws, ensuring robust disclosures and op and cyber risk management among many other things. The role of the broker-dealer continues to be affirmed under the Atkins SEC.
@Citi estimates that stablecoins will grow 6-12x, to $1.9t-$4t by the end of the decade. Those stablecoins will need a compliant way to earn yield and invest in compliant, regulated infrastructure. We're building for that future.
Now it is time to build that future in America alongside @ThatAlexPalmer @chriseyin @teddyP_xyz and the Kimber Labs (Plume) team.
Kimber Digital Securities, Plume's affiliated broker-dealer, has been approved for FINRA membership and is now registered as a broker-dealer with the SEC.
This is a milestone for Plume and a major step toward achieving Plume's mission to bring the real world onchain, r-dealer is built to put real tokenized securities with full shareholder rights into an investor's wallet. It carries the protections of a regulated firm, e.g., best execution, independent oversight of operational and cyber risk, and clear, continuous disclosure.
Broker-dealer registration also gives our customers access to the core of U.S. market infrastructure, the Depository Trust Company. Investors will be able to hold eligible stocks, ETFs, and bonds in their self-custodial wallets while keeping the book-entry claim that's already recorded at the DTC.
DTC entitlements give these tokens what most onchain assets lack, a settled, recognized claim on the real U.S. equity, ETF, or bond asset.
Real ownership. Onchain distribution. Designed for compliance.
Read the full announcement: plume.org/blog/%20Kimber…
Securities offered through Kimber Digital Securities LLC, member FINRA. Investment products are Not FDIC Insured, Not Bank Guaranteed and May lose value.
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Looking forward to building American onchain capital markets!
Kimber Digital Securities, Plume's affiliated broker-dealer, has been approved for FINRA membership and is now registered as a broker-dealer with the SEC.
This is a milestone for Plume and a major step toward achieving Plume's mission to bring the real world onchain, r-dealer is built to put real tokenized securities with full shareholder rights into an investor's wallet. It carries the protections of a regulated firm, e.g., best execution, independent oversight of operational and cyber risk, and clear, continuous disclosure.
Broker-dealer registration also gives our customers access to the core of U.S. market infrastructure, the Depository Trust Company. Investors will be able to hold eligible stocks, ETFs, and bonds in their self-custodial wallets while keeping the book-entry claim that's already recorded at the DTC.
DTC entitlements give these tokens what most onchain assets lack, a settled, recognized claim on the real U.S. equity, ETF, or bond asset.
Real ownership. Onchain distribution. Designed for compliance.
Read the full announcement: plume.org/blog/%20Kimber…
Securities offered through Kimber Digital Securities LLC, member FINRA. Investment products are Not FDIC Insured, Not Bank Guaranteed and May lose value.
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Salman Banaei retweeted
Transfer agents still run on 1970s rules — they need your name and a physical mailing address.
For tokenized securities, a digital wallet address does the job better: more privacy, faster settlement, more engaged shareholder governance.
We filed a joint comment with Securitize, ume asking the SEC to modernize transfer agent rules. 🧵
@Securitize @bullish @equiniti @centrifuge @plumenetwork
For tokenized securities, a digital wallet address does the job better: more privacy, faster settlement, more engaged shareholder governance.
We filed a joint comment with Securitize, ume asking the SEC to modernize transfer agent rules. 🧵
@Securitize @bullish @equiniti @centrifuge @plumenetwork
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Strongly agree with @milesjennings. A few comments from someone also helping build vault infrastructure @plumenetwork for institutional use cases in particular. We made 101-level suggestions to @SECGov in September. I am grateful that @crypto_council, @Morpho, @KaminoFinance, in the work to put together a graduate school-level seminar.
Mainstream finance and policymakers have been explicit that the prize of onchain finance is collateral mobility and utility, and they cannot capture it without legal certainty. GFMA and SIFMA estimate tokenization could free roughly $100B in collateral. DTCC calls tokenized collateral a way to unlock billions and transform liquidity management. MAS’s Project Guardian and IOSCO’s tokenization work point the same direction. Regulated institutions will not move size onto these rails on faith. Legal certainty is the unlock.
How do we get legal certainty? We need a pragmatic reconciliation of the vaults with the @SECGov regulatory perimeter. What matters is control, not code. Writing and publishing immutable, non-custodial smart contracts should never trigger regulatory obligations. Regulation should attach only where a centralized actor retains discretion after a user deposits and derives financial benefit from it: curating a vault, setting and reconfiguring parameters, intermediating returns. That is Miles’s point. If no one can unilaterally reconfigure the parameters, the user did not buy a security and the protocol is not an investment.
On the CCI versus Aave/Veda/Kamino strategy debate in this thread: these are complementary, not competing papers.
The Aave, Veda, and Kamino paper does the doctrinal work, showing why decentralized lending and non-custodial vaults do not fit the existing securities laws: no note under Reves, no common enterprise under Howey, no issuer under the 1940 Act, user-custodial throughout.
CCI’s “Under Control” framework takes the next step. For the cases where a person does retain control, it builds proportionate regulated pathways where none currently exist nor are likely to exist absent some acceptance of regulation. The pathways are calibrated to that control rather than defaulting to blanket registration, and it recognizes that fully immutable, non-custodial vaults can fall outside the statutes entirely. Nothing in it undermines DeFi. It puts guardrails where investment returns are intermediated, which is where accountability belongs.
Blanket relief is also not realistic for the subset of vaults that actually carry these risks. The Advisers Act exists to eliminate, or at least expose, the conflicts of interest inherent in investment advisory services. The 1940 Act’s declared policy targets pooled vehicles operated in the interest of insiders rather than investors and inadequate disclosure. Where a compensated curator exercises discretion, the SEC will not exempt it wholesale. Yes, DeFi infrastructure reduces many of the risks securities laws target, but they do not eliminate them. Hence the meme below from @ConcreteXYZ "If you don’t know where the yield comes from, you are the yield.”
That is precisely why control-calibrated pathways, not blanket exclusion, are the credible ask and far more likely to unlock regulated use cases.
The worry that a framework picks winners and losers has it backwards. Uncertainty is what picks winners, because it deters the entry of regulated institutions into this ecosystem. For DeFi use cases to grow, DeFi needs compliant pathways to integrate into mainstream finance.
I'll reiterate my core point: legal certainty is what unlocks institutional use of lend protocols and vaults, and legal theories that reach the end point of blanket deregulation are unlikely to earn much accommodation from this otherwise open-minded SEC. Look at how tepidly the agency has moved AMMs toward the regulated perimeter under the "Innovation Exemption."
Deep respect for the expertise of Miles, @TuongvyLe12, and @LindaJeng1, who have done as much as anyone to make these distinctions legible to regulators.
The CCI paper is not capitulation. It is how you give a risk-averse regulator @SECGov a reason to say yes to regulated use cases of lend protocols and vault infra.
Mainstream finance and policymakers have been explicit that the prize of onchain finance is collateral mobility and utility, and they cannot capture it without legal certainty. GFMA and SIFMA estimate tokenization could free roughly $100B in collateral. DTCC calls tokenized collateral a way to unlock billions and transform liquidity management. MAS’s Project Guardian and IOSCO’s tokenization work point the same direction. Regulated institutions will not move size onto these rails on faith. Legal certainty is the unlock.
How do we get legal certainty? We need a pragmatic reconciliation of the vaults with the @SECGov regulatory perimeter. What matters is control, not code. Writing and publishing immutable, non-custodial smart contracts should never trigger regulatory obligations. Regulation should attach only where a centralized actor retains discretion after a user deposits and derives financial benefit from it: curating a vault, setting and reconfiguring parameters, intermediating returns. That is Miles’s point. If no one can unilaterally reconfigure the parameters, the user did not buy a security and the protocol is not an investment.
On the CCI versus Aave/Veda/Kamino strategy debate in this thread: these are complementary, not competing papers.
The Aave, Veda, and Kamino paper does the doctrinal work, showing why decentralized lending and non-custodial vaults do not fit the existing securities laws: no note under Reves, no common enterprise under Howey, no issuer under the 1940 Act, user-custodial throughout.
CCI’s “Under Control” framework takes the next step. For the cases where a person does retain control, it builds proportionate regulated pathways where none currently exist nor are likely to exist absent some acceptance of regulation. The pathways are calibrated to that control rather than defaulting to blanket registration, and it recognizes that fully immutable, non-custodial vaults can fall outside the statutes entirely. Nothing in it undermines DeFi. It puts guardrails where investment returns are intermediated, which is where accountability belongs.
Blanket relief is also not realistic for the subset of vaults that actually carry these risks. The Advisers Act exists to eliminate, or at least expose, the conflicts of interest inherent in investment advisory services. The 1940 Act’s declared policy targets pooled vehicles operated in the interest of insiders rather than investors and inadequate disclosure. Where a compensated curator exercises discretion, the SEC will not exempt it wholesale. Yes, DeFi infrastructure reduces many of the risks securities laws target, but they do not eliminate them. Hence the meme below from @ConcreteXYZ "If you don’t know where the yield comes from, you are the yield.”
That is precisely why control-calibrated pathways, not blanket exclusion, are the credible ask and far more likely to unlock regulated use cases.
The worry that a framework picks winners and losers has it backwards. Uncertainty is what picks winners, because it deters the entry of regulated institutions into this ecosystem. For DeFi use cases to grow, DeFi needs compliant pathways to integrate into mainstream finance.
I'll reiterate my core point: legal certainty is what unlocks institutional use of lend protocols and vaults, and legal theories that reach the end point of blanket deregulation are unlikely to earn much accommodation from this otherwise open-minded SEC. Look at how tepidly the agency has moved AMMs toward the regulated perimeter under the "Innovation Exemption."
Deep respect for the expertise of Miles, @TuongvyLe12, and @LindaJeng1, who have done as much as anyone to make these distinctions legible to regulators.
The CCI paper is not capitulation. It is how you give a risk-averse regulator @SECGov a reason to say yes to regulated use cases of lend protocols and vault infra.
Regulators aren't incentivized to take on risk. There's very little benefit for them to take a narrow vision of the law because if the path they create works they don't often get credit, but if it results in disaster they do get blamed.
So, if you want regulators to act, some believe that you need to give them every reason and assurance that it's okay to act. That means asking for incremental steps rather than asking for everything you want.
It would be great if the SEC came out and agreed with Aave's interpretation. But if they don't agree, would we rather end up with nothing or what CCI proposed? I think the answer is obvious.
Further, nothing about what CCI proposed would undermine DeFi. It'd just mean that where you have people intermediated investment returns, that those people are subject to regulatory guardrails.
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Salman Banaei retweeted
Regulators aren't incentivized to take on risk. There's very little benefit for them to take a narrow vision of the law because if the path they create works they don't often get credit, but if it results in disaster they do get blamed.
So, if you want regulators to act, some believe that you need to give them every reason and assurance that it's okay to act. That means asking for incremental steps rather than asking for everything you want.
It would be great if the SEC came out and agreed with Aave's interpretation. But if they don't agree, would we rather end up with nothing or what CCI proposed? I think the answer is obvious.
Further, nothing about what CCI proposed would undermine DeFi. It'd just mean that where you have people intermediated investment returns, that those people are subject to regulatory guardrails.
So, if you want regulators to act, some believe that you need to give them every reason and assurance that it's okay to act. That means asking for incremental steps rather than asking for everything you want.
It would be great if the SEC came out and agreed with Aave's interpretation. But if they don't agree, would we rather end up with nothing or what CCI proposed? I think the answer is obvious.
Further, nothing about what CCI proposed would undermine DeFi. It'd just mean that where you have people intermediated investment returns, that those people are subject to regulatory guardrails.
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Salman Banaei retweeted
Honestly these seem like mild asks from Democrats.
Maxine Water's "Crypto Investor Bill of Rights":
* All exchange withdrawals within 24 hours
* Customer assets segregated and bankruptcy-remote
* Monthly proof of reserves with auditor attestation
Overall, sounds constructive.
Maxine Water's "Crypto Investor Bill of Rights":
* All exchange withdrawals within 24 hours
* Customer assets segregated and bankruptcy-remote
* Monthly proof of reserves with auditor attestation
Overall, sounds constructive.
🚨SCOOP: House Democrats are discussing plans to expand the Crypto Investor and Consumer Bill of Rights, @RepMaxineWaters’ amendment to the Clarity Act in 2025, into a broader crypto “market structure” bill next Congress.
The proposal would fold in Democratic Clarity Act provisions originally offered by Waters in the House (which were not adopted), as well as provisions Senate Democrats were able to agree to with Republicans before the September cloture vote, according to three industry sources who have spoken with Democratic staffers.
Some of the proposals under discussion are said to include giving the @SECGov more of a role in supervising the crypto markets, and a more limited role for the @CFTC. Additionally, it’s likely that further ethics provisions will be offered to restrict the crypto activities of President Trump and other federal officials.
Republicans are calling this a “messaging bill.”
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Salman Banaei retweeted
YOU HAVE TWELVE HOURS TO PLACE THE PRONOUNS BACK IN YOUR EMAIL OR YOU WILL BE REPORTED
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Today we joined @Figure, @Securitize, Equiniti, and @centrifuge in a joint comment letter on the SEC’s transfer agent (TA) modernization proposal. We support the long-overdue update and recognition of blockchain recordkeeping for tokenized securities, but urge a fully principles-based approach to securityholder identification and communication.
Mandating KYC, i.e. name + physical mailing address, as a baseline is an outdated method for investor protection. Digital wallet addresses, emails, and other electronic identifiers can uniquely identify holders and enable reliable communication (often more effectively) especially for directly held tokenized holdings.
We also recommended multi-channel contact for lost holders (not mandatory physical-address database searches) and that AML/BSA goals stay with FinCEN, not this @SECGov rulemaking.
Full letter: sec.gov/comments/S7-20…
Mandating KYC, i.e. name + physical mailing address, as a baseline is an outdated method for investor protection. Digital wallet addresses, emails, and other electronic identifiers can uniquely identify holders and enable reliable communication (often more effectively) especially for directly held tokenized holdings.
We also recommended multi-channel contact for lost holders (not mandatory physical-address database searches) and that AML/BSA goals stay with FinCEN, not this @SECGov rulemaking.
Full letter: sec.gov/comments/S7-20…
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An observation from @TokenPolicyCTM: demand for tokenized products is the challenge for regulated institutions while supply of a wide range of tokenized products is the constraint from the perspective of those in the DeFi tokenized asset supply chain.
Plume General Counsel @banamlas is live in NYC at the @TokenPolicyCTM Tokenized Fund Roundtable, discussing DeFi vs. traditional fund distribution.
With $900M+ in total deposits processed through Plume Vaults, distribution is the next big unlock for Open Finance.
Deposit today: app.plume.org/vaults?utm_sou…
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.@Figure has succeeded in creating a DeFi pipeline for tokenized assets.
144A HELOC and Auto ABS origination + offshore (Cayman) offerings into DeFi (Hastra/PRIME).
PRIME ~$560M TVL, ~$900M+ monthly volume. $15B+ tokenized.
This might be the first successful TradFi -> DeFi distribution supply chain, demonstrating DeFi as a source of liquidity for US HELOC ABS.
144A HELOC and Auto ABS origination + offshore (Cayman) offerings into DeFi (Hastra/PRIME).
PRIME ~$560M TVL, ~$900M+ monthly volume. $15B+ tokenized.
This might be the first successful TradFi -> DeFi distribution supply chain, demonstrating DeFi as a source of liquidity for US HELOC ABS.
@Figure's Democratized Prime marketplace has nearly $800M in lender supply, and nPRIME brings its home equity yield to Plume Vaults.
Figure originates the home equity lines of credit, and lenders in its Democratized Prime pool finance them. @HastraFi's PRIME brings that pool's wraps PRIME as a Plume Vault you can enter with one deposit.
Explore nPRIME: app.plume.org/vaults/nprime?…
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If your goal is to protect investors, then the Binance hack is an argument for digital assets legislation, not against it. Under §20204 of Clarity, a registered DCE must meet CFTC system safeguards core principles and hold customer assets at a qualified custodian.
Weakly supervised venues offshore are the problem and better global oversight of them is the solution.
OTH if your goal is to protect incumbents, then the Binance hack is great to point at.
Weakly supervised venues offshore are the problem and better global oversight of them is the solution.
OTH if your goal is to protect incumbents, then the Binance hack is great to point at.
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When should a tokenized asset be frozen?
Most RWA issuers can freeze and reissue tokens. The open question is what facts trigger that power, and the answer depends on the product. TLDR: We need a “reasonable belief” global standard for emergency freezes. Only GENIUS is moving there while FATF in July recommended a global "emergency freeze" standard.
1-Tokenized securities (US): SEC Rule 17f-1 sets the standard at a “substantial basis for believing” a crime occurred, but it exempts uncertificated securities. This is unfortunately how most tokenized securities are structured. The UCC fallback is notice, then 30 days unless the owner gets a court order or posts a bond.
2-Payment stablecoins: GENIUS requires issuers to be able to carry out a lawful order. FinCEN/OFAC’s proposal adds a risk-based duty to block impermissible transactions.
3-Bermuda digital asset businesses: the trigger is a sanctions designation.
4- EU: MiCA has no freeze rule. Sanctions designation is the trigger.
5-DeFi (FATF) this year recommended lawful order, plus national-level emergency freeze rules.
The gap is an issuer (its agent/service provider) acting on its own onchain analytics before any order or designation. Binance was largely drained in minutes.
Most RWA issuers can freeze and reissue tokens. The open question is what facts trigger that power, and the answer depends on the product. TLDR: We need a “reasonable belief” global standard for emergency freezes. Only GENIUS is moving there while FATF in July recommended a global "emergency freeze" standard.
1-Tokenized securities (US): SEC Rule 17f-1 sets the standard at a “substantial basis for believing” a crime occurred, but it exempts uncertificated securities. This is unfortunately how most tokenized securities are structured. The UCC fallback is notice, then 30 days unless the owner gets a court order or posts a bond.
2-Payment stablecoins: GENIUS requires issuers to be able to carry out a lawful order. FinCEN/OFAC’s proposal adds a risk-based duty to block impermissible transactions.
3-Bermuda digital asset businesses: the trigger is a sanctions designation.
4- EU: MiCA has no freeze rule. Sanctions designation is the trigger.
5-DeFi (FATF) this year recommended lawful order, plus national-level emergency freeze rules.
The gap is an issuer (its agent/service provider) acting on its own onchain analytics before any order or designation. Binance was largely drained in minutes.
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Key point. Your Robinhood account getting drained by an identity thief isn't recorded on a public database vs. crypto hacks are. Not to excuse the cyber risk management practices in crypto - they need to improve - but hacks are ubiquitous. Ex ante (better op/cyber risk, testing, etc.) and ex post (freeze/burn) solutions need to be more broadly implemented EVERYWHERE.
Each hack like this does increases the risk adjusted returns to bring customers and institutions onchain and crypto needs to do better - as does TradFi (esp with rise of AI which brings crypto-level exploit scalability to disparate TradFi platforms).
Each hack like this does increases the risk adjusted returns to bring customers and institutions onchain and crypto needs to do better - as does TradFi (esp with rise of AI which brings crypto-level exploit scalability to disparate TradFi platforms).
At the same time, it was visible fast because things are visible on chain. In a more analog world, hacks can persist for months because the data visibility is poorer.
But also, this is only going to get worse. AI favors attackers on cyber.
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Salman Banaei retweeted
Indeed, congratulations @The_DTCC
Big congrats to @The_DTCC on the launch of its tokenization service. Firms can now tokenize eligible DTC-held securities without giving up the ownership rights and protections that come with them. This is a super exciting step toward connecting the trade, the financing and the collateral, which unlocks significant capital efficiencies. Very proud to see @CantonNetwork alongside DTCC’s own blockchain as the two networks integrated at launch.
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