A version of this story appeared in The Guidance newsletter on December 1. Sign up here.Hi all, Liam here. A leading trade group for high finance has a few notes for the Securities and Exchange Commission on its ambitious crypto plans. The Securities Industry and Financial Markets Association issued a letter last week, cautioning the SEC about its approach to tokenisation. The letter was a response to the watchdog’s plans — also known as Project Crypto — for developing a “tailored” exemption regime for crypto projects to build their ideas without “navigating a maze of regulatory uncertainty.” The problem, cautioned SIFMA, is that the regulatory maze is part of what makes American capital markets the deepest and most trusted in the world. “The Commission should exercise great caution to ensure that innovation supports rather than undermines the regulatory architecture that tens of millions of American families rely on,” it wrote.SIFMA is a US lobbying organisation that represents the interests of broker-dealers and securities firms, among other groups. In the past, the organisation has advocated for faster settlement times and campaigned against what it perceives as burdensome capital requirements for banks.Tokenisation is the process of bringing traditional financial instruments, such as stocks and bonds, onto a blockchain. Proponents argue that the technology allows faster settlement times and greater transparency among market participants. The total tokenisation market is worth roughly $36 billion, according to data from RWA.xyz. Standard Chartered estimates the sector, excluding stablecoins, could grow to as large as $2 trillion by 2028.Now, SIFMA is pushing the SEC to tread lightly as it moves to absorb blockchain-based technologies into mainstream financial markets. That revolves around two key components. First, SIFMA suggests that existing securities laws around asset issuance and intermediation are likely sufficient to regulate crypto versions of the same — echoing an argument often voiced by former SEC Chair and anti-crypto firebrand Gary Gensler. The names may be different, and when, for instance, examining a platform that matches buyers and sellers — be it in crypto or stocks — there’s no reason that laws regulating brokers shouldn’t apply in the same way. “It would be inconsistent with fundamental principles of US securities regulation — and with decades of Commission precedent — to allow functionally identical activities to operate outside the federal securities laws simply because they are facilitated through elements of distributed ledger technology,” the letter reads. Second, SIFMA raised concerns about exemptions the SEC may grant to crypto projects operating in the tokenisation space. The bar should be extremely high, especially for upstarts in the tokenisation space, SIFMA argued. When a project alleges that its technology excludes it from securities laws, projects would need to explain how that’s possible, and the SEC should publish each proposal for a notice-and-comment period. Without uniform rules governing both tokenised stocks and traditional stocks, argues SIFMA, the SEC could end up creating two markets, thin liquidity, and material price differences between the token and its underlying asset.That certainly isn’t the ideal outcome. And as SIFMA highlights, unwieldy markets can also have a much more noxious effect on the broader market.This “could potentially further disincentivise companies from going and remaining public, undermining the supremacy of the US capital markets.”Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.A version of this story appeared in The Guidance newsletter on December 1. Sign up here.Hi all, Liam here. A leading trade group for high finance has a few notes for the Securities and Exchange Commission on its ambitious crypto plans. The Securities Industry and Financial Markets Association issued a letter last week, cautioning the SEC about its approach to tokenisation. The letter was a response to the watchdog’s plans — also known as Project Crypto — for developing a “tailored” exemption regime for crypto projects to build their ideas without “navigating a maze of regulatory uncertainty.” The problem, cautioned SIFMA, is that the regulatory maze is part of what makes American capital markets the deepest and most trusted in the world. “The Commission should exercise great caution to ensure that innovation supports rather than undermines the regulatory architecture that tens of millions of American families rely on,” it wrote.SIFMA is a US lobbying organisation that represents the interests of broker-dealers and securities firms, among other groups. In the past, the organisation has advocated for faster settlement times and campaigned against what it perceives as burdensome capital requirements for banks.Tokenisation is the process of bringing traditional financial instruments, such as stocks and bonds, onto a blockchain. Proponents argue that the technology allows faster settlement times and greater transparency among market participants. The total tokenisation market is worth roughly $36 billion, according to data from RWA.xyz. Standard Chartered estimates the sector, excluding stablecoins, could grow to as large as $2 trillion by 2028.Now, SIFMA is pushing the SEC to tread lightly as it moves to absorb blockchain-based technologies into mainstream financial markets. That revolves around two key components. First, SIFMA suggests that existing securities laws around asset issuance and intermediation are likely sufficient to regulate crypto versions of the same — echoing an argument often voiced by former SEC Chair and anti-crypto firebrand Gary Gensler. The names may be different, and when, for instance, examining a platform that matches buyers and sellers — be it in crypto or stocks — there’s no reason that laws regulating brokers shouldn’t apply in the same way. “It would be inconsistent with fundamental principles of US securities regulation — and with decades of Commission precedent — to allow functionally identical activities to operate outside the federal securities laws simply because they are facilitated through elements of distributed ledger technology,” the letter reads. Second, SIFMA raised concerns about exemptions the SEC may grant to crypto projects operating in the tokenisation space. The bar should be extremely high, especially for upstarts in the tokenisation space, SIFMA argued. When a project alleges that its technology excludes it from securities laws, projects would need to explain how that’s possible, and the SEC should publish each proposal for a notice-and-comment period. Without uniform rules governing both tokenised stocks and traditional stocks, argues SIFMA, the SEC could end up creating two markets, thin liquidity, and material price differences between the token and its underlying asset.That certainly isn’t the ideal outcome. And as SIFMA highlights, unwieldy markets can also have a much more noxious effect on the broader market.This “could potentially further disincentivise companies from going and remaining public, undermining the supremacy of the US capital markets.”Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at liam@dlnews.com.

        Highlights:  US prosecutors requested a 12-year prison sentence for Do Kwon after the Terra collapse. Terraform’s $40 billion downfall caused huge losses and sparked a long downturn in crypto markets.  Do Kwon will face sentencing on December 11 and must give up $19 million in earnings.   US prosecutors have asked a judge to give Do Kwon, Terraform Labs co-founder, a 12-year prison sentence for his role in the remarkable $40 billion collapse of the Terra and Luna tokens. The request also seeks to finalize taking away Kwon’s criminal earnings.  The court filing came in New York’s Southern District on Thursday. This is about four months after Kwon admitted guilt on two charges: wire fraud and conspiracy to defraud. Prosecutors said Kwon caused more losses than Samuel Bankman-Fried, Alexander Mashinsky, and Karl Sebastian Greenwood combined.  U.S. prosecutors have asked a New York federal judge to sentence Terraform Labs co-founder Do Kwon to 12 years in prison, calling his role in the 2022 TerraUSD collapse a “colossal” fraud that triggered broader crypto-market failures, including the downfall of FTX. Sentencing is… — Wu Blockchain (@WuBlockchain) December 5, 2025  Terraform Collapse Shakes Crypto Market Authorities explained that Terraform’s collapse affected the entire crypto market. They said it helped trigger what is now called the ‘Crypto Winter.’ The filing stressed that Kwon’s conduct harmed many investors and the broader crypto world. On Thursday, prosecutors said Kwon must give up just over $19 million. They added that they will not ask for any additional restitution. They said: “The cost and time associated with calculating each investor-victim’s loss, determining whether the victim has already been compensated through the pending bankruptcy, and then paying out a percentage of the victim’s losses, will delay payment and diminish the amount of money ultimately paid to victims.” Authorities will sentence Do Kwon on December 11. They charged him in March 2023 with multiple crimes, including securities fraud, market manipulation, money laundering, and wire fraud. All connections are tied to his role at Terraform. After Terra fell in 2022, authorities lost track of Kwon until they arrested him in Montenegro on unrelated charges and sent him to the U.S. Do Kwon’s Legal Case and Sentencing In April last year, a jury ruled that both Terraform and Kwon committed civil fraud. They found the company and its co-founder misled investors about how the business operated and its finances. Jay Clayton, U.S. Attorney for the Southern District of New York, submitted the sentencing request in November.  TERRA STATEMENT: “We are very disappointed with the verdict, which we do not believe is supported by the evidence. We continue to maintain that the SEC does not have the legal authority to bring this case at all, and we are carefully weighing our options and next steps.” — Zack Guzmán  (@zGuz) April 5, 2024  The news of Kwon’s sentencing caused Terraform’s token, LUNA, to jump over 40% in one day, from $0.07 to $0.10. Still, this rise remains small compared to its all-time high of more than $19, which the ecosystem reached before collapsing in May 2022. In a November court filing, Do Kwon’s lawyers asked for a maximum five-year sentence. They argued for a shorter term partly because he could face up to 40 years in prison in South Korea, where prosecutors are also pursuing a case against him. The legal team added that even if Kwon serves time in the U.S., he would not be released freely. He would be moved from prison to an immigration detention center and then sent to Seoul to face pretrial detention for his South Korea charges.    eToro Platform    Best Crypto Exchange   Over 90 top cryptos to trade Regulated by top-tier entities User-friendly trading app 30+ million users    9.9   Visit eToro eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong.