Regulatory developments matter to M&A, particularly in the crypto | digital asset industries, given their libertarian roots and more recent embrace of legitimacy.
In the U.S., regulators, in this case the SEC and CFTC, have long squabbled over jurisdiction, or “ownership,” of crypto, but are now formally setting aside their differences and collaborating constructively. Part of that collaboration involves a set of objectives, some of which are as fundamental as defining a taxonomy for the myriad types of crypto assets. Coinbase first attempted this when it published the GDAX Digital Asset Framework in late 2017, more than eight years ago.
Priority areas include:
- Clarifying product definitions through joint interpretations and rulemakings.
- Modernizing clearing, margin, and collateral frameworks.
- Reducing frictions for dually registered exchanges, trading venues, and intermediaries.
- Providing a fit-for-purpose regulatory framework for crypto assets.
- Streamlining regulatory reporting for trade data, funds, and intermediaries.
- Coordinating cross-market examinations, economic analyses, risk monitoring, surveillance, and enforcement.
Regulation has been an important strategic consideration, and sometimes the most important rationale, in virtually every crypto | digital asset M&A transaction Architect Partners has been involved in. This will continue.
