On May 2, the Blockchain Association, representing leading industry figures such as Coinbase, Ripple, and Uniswap Labs, submitted detailed comments to the U. S. Securities and Exchange Commission (SEC) under new Chair Paul S. Atkins. The Association advocates for an “incremental, flexible approach” to regulation that aligns with blockchain’s unique decentralized nature and digital assets, arguing that traditional equity-style regulatory frameworks are ill-suited for this rapidly evolving ecosystem. These conventional rules, designed for centralized financial instruments, could impose excessive restrictions that stifle innovation within decentralized finance (DeFi) and broader Web3 development, potentially jeopardizing the U. S. ’s position as a global blockchain leader and ceding ground to more adaptable jurisdictions. A core recommendation is updating the “best execution” rule—a fundamental securities regulation requiring brokers to execute orders on the best terms for customers. The Association suggests replacing prescriptive equity norms with a diligence-based framework recognizing blockchain markets’ continuous, decentralized trading across multiple venues. This change aims to create a practical standard that encourages innovation while protecting investors. Additionally, the Association proposes using public exchange application programming interfaces (APIs) for regulatory oversight. They argue this method allows regulators to access necessary market data and surveillance information without massive collection of personal user data, respecting user privacy and aligning with blockchain’s transparent design while enabling monitoring of market manipulation and illicit activities. They also recommend establishing public-private roundtables to foster ongoing dialogue and collaborative policymaking among regulators, industry participants, and stakeholders.

Such forums would help iteratively refine tokenization guidelines, ensuring regulations evolve alongside technological advances and market realities. These proposals emerge at a pivotal moment as the SEC pursues litigation against major cryptocurrency firms. Reflecting a broader policy shift from adversarial enforcement to cooperative rulemaking, the Association’s appeal could enhance regulatory clarity, predictability, and fuel a regulatory renaissance boosting U. S. competitiveness in digital assets. This approach aligns with international trends like the European Union’s Markets in Crypto-Assets (MiCA) regulation and Singapore’s comprehensive digital asset frameworks, which balance innovation support with risk management. Adoption of similar principles by the SEC would reinforce U. S. leadership in the expanding digital asset ecosystem, attracting innovation and investment. In summary, the Blockchain Association’s formal SEC comments present a forward-looking regulatory vision tailored to blockchain’s realities. They call for modernized rules balancing investor protection with innovation, privacy with oversight, and enforcement with engagement. Embracing these principles could foster sustainable growth and solidify U. S. global leadership in the dynamic Web3 and digital asset space.