Partner quoted in ‘Board IQ’ on crypto regulatory ‘dogfight’

BCLP Partner Renato Mariotti was quoted Oct. 18 by Board IQ (subscription required) concerning the Securities and Exchange Commission (SEC) order that fined Kim Kardashian $1.26 million for touting the EthereumMax token EMAX on social media without disclosing she was being paid for the content. The omission was significant because it repeatedly referred to the digital asset as a “security.” To some observers, that constituted another claim on the space by SEC Chair Gary Gensler, who has indicated that his agency should set the rules, not the Commodity Futures Trading Commission (CFTC.)  “What I saw [with the Kardashian order] was the chairman of the SEC planting a flag that he wanted to regulate the space and making sure that as many people in the U.S. knew,” said Renato, a former federal prosecutor. He added that fund directors also should ask how their adviser would mitigate litigation risk and noted that private plaintiffs often follow regulatory action. Experts said that they expect Congress to make the final decision of who will regulate digital assets. “My prediction is that…Mr. Gensler will win out,” he said. “The question is whether he believes there is value in having both agencies involved and whether an external force, like the industry, which wants the CFTC to regulate, whether they will force the issue.”