2026.10.05 | TB | Fintech | US Digital Assets & Crypto Regulation Expert

Client-led • 17 Sep 2026

Companies: AAPL US, SCHW US, CME US, AMC US, HOOD US

Expert Former Director, Financial Regulation & Corporate Governance at a US-based Public Policy Research & Advocacy Organisation

Agenda

• Well-placed to discuss the US digital assets and cryptocurrency sector, with a strong understanding of big players such as Apple, Charles Schwab, AMC Entertainment, CME Group and Robinhood Markets
• Comprehensive knowledge of perpetual futures in crypto, noting swaps and futures, as well as regulator dynamics and the Clarity Act related to token regulation
• Well-positioned to discuss various aspects related to CFTC (Commodity Futures Trading Commission), SEC (Securities and Exchange Commission) and DTCC (The Depository Trust & Clearing Corp)
• Knowledgeable on perpetual single-stock futures, single-stock equity-linked notes and single-stock ETFs (exchange-traded funds), highlighting legal differences

Questions

00:03:14] We're trying to better understand the US digital assets and cryptocurrency sector, focusing on big players such as Apple, Charles Schwab, AMC Entertainment, CME Group and Robinhood Markets. We would like to discuss perpetual futures in crypto. To begin, are these things swaps or futures?

Expert [00:05:21]: That's the USD 100m question, isn't it? The CFTC has said that they are futures. They are allowing or have moved to allow, for example, Kalshi to list them as futures. CME is suing arguing that actually they are swaps and the CFTC did not do enough analysis to argue that they are actually futures. That question is in the courts.

00:06:11] We've heard CME's comments – there's actually something being litigated, and there's also the idea that you're going against your regulator, which I don't think is very unique, but always feels a bit uncomfortable. What is your take on the whole situation?

Expert [00:06:39]: Yes. CME has always been thought of as being the sixth CFTC commissioner. I think CME has probably the better argument here in the case, but only from a procedural posture and not necessarily from a statutory posture. In allowing exchanges to offer perpetuals, the CFTC seems to have done very little analysis on the issue. There was an application and the next day, the CFTC approved the application using a lot of text that seem to be lifted straight from the application in the approval and didn't seem to do the analysis that the law requires them to do. The Administrative Procedure Act requires regulators to not be arbitrary and capricious to do due diligence, understanding the issue. CME is arguing that the CFTC didn't do that. Given that there was an application and an approval the next day, I buy that. I think that they probably did not put in the analysis necessary. Now if the CFTC were to do this over again and put in the analytical effort, I really don't know which way this case would turn out. I think CME will probably win this initial skirmish, but I have no idea where the war will end up.

Client [00:09:04]: If CME wins the skirmish, will approvals for those products be rescinded?

Expert [00:09:12]: Yes, yes.

Client [00:09:15]: Presumably, the US CFTC [Commodity Futures Trading Commission] will have to do more work and come back with the same result, but with more paperwork.

Expert [00:09:25]: I think my take on all of this is that money goes to zero-day options, prediction markets, perpetuals. I think this is a fight over the allocation of that limited pot of money and CME is trying to preserve its share. I also think that in this litigation, CME is kind of waiting out the clock or trying to wait out the clock until it gets a CFTC that is more aligned with its perspective.

Client [00:10:31]: Who appoints the commissioners?

Expert [00:10:35]: The President with confirmation by the Senate.

Client [00:10:40]: I believe the President loves what Selig is doing. Won't we just get a bunch of more Selig-like companies?

Expert [00:10:48]: Yes, but if CME can wait Selig out until January 2029, we might get other people.

00:12:12] Let's say the CFTC [Commodity Futures Trading Commission] loses and this is deemed a swap. Actually, first, if the approvals are tossed out on procedural grounds, does that mean the judicial branch doesn't have to come to a conclusion on whether it's a swap or not?

Expert [00:12:40]: That's correct.

Client [00:12:42]: Let's say it goes to trial again and at that point, the procedure is fine. Then the courts will have to rule on whether it's a swap or a future, right?

Expert [00:12:58]: Yes, that's right. I will say that a lot of people are talking in a lot of different situations about Loper Bright and the death of Chevron deference. I will say that I think courts do not want to deal with that very wonky specific issue. I imagine that if a court was asked to really decide between the two, it would look to whatever the CFTC says. If Michael Selig is still Chair of the CFTC when that comes down, if they've done all the procedures right, then I think the courts would say, sure, it's a future. If there are different people in place in 2029 when they decide this, then I think the courts would say, sure, it's a swap. It's just too complicated an issue for, I think, courts to really deal with.

Client [00:14:04]: Are the Republicans the ones saying that the administrators are too powerful and the courts should yield more power?

Expert [00:14:15]: It depends what year it is. That partisanship flips back and forth.

Client [00:14:24]: Depending on who has control, okay.

00:14:24] Let's say CME prevails. If it is the future, then that's almost the base case, and we see what's happening. If it's deemed a swap, then why does CME care?

Expert [00:14:47]: I don't think CME really does care here. I think CME is just protecting its turf. I see this as CME right, trying to stop a competitor from offering a product that is equivalent to its products, which are swaps. Right, I don't think the exchanges care one way or the other what they are. They just want people to use their platform vs a competitor's platform.

00:15:27] As we understand it, the Clarity Act was to formalise a lot of rules around token regulation, such as whether the SEC [Securities and Exchange Commission] oversees parts of it, and disclosures. This week we saw that it failed to get the vote to even advance the bill. I think that was due to the ethics provisions because the administration is benefiting a lot from tokens and crypto personally.

The broad reaction at Wall Street seems to be that this may slow things down, but it doesn't halt progress on all sorts of tokens. You could even be more dismissive of the recent vote and say that this has no bearing on tokenised equities because that's clearly a security with clear regulatory requirements. What do you think is happening with the Clarity Act and the progress of tokens?

Expert [00:06:50]: Yes. I agree with you. I think it might slow things down a little bit, but does not kill tokenisation efforts. I don't know if you saw, but an hour and 20 minutes ago, the SEC released their innovation exception. It's not a rulemaking, but their innovation exception. I haven't read the whole thing. I've read the press release and the fact sheet, but what it says is that a DeFi protocol that lists a tokenised security that has full economic and legal rights of a traditional security can be, sorry, the DeFi protocol can list that token for trading without it being considered a securities exchange. That basically blesses tokenisation of securities so long as they provide economic and legal consistency with traditional securities as well as if they give the issuer of the security of the equity an option to delist if they don't want it listed. There's more there, but generally, the SEC is saying we don't need clarity. We don't need the Clarity Act to allow tokenisation to continue.

I think the big question overall with the SEC's approach is how will it allow tokenisations to occur? You can tokenise an equity in a lot of different ways. You can issue a token that literally is the security. You can issue a token that represents a note economically linked to an equity, you can create a special purpose vehicle that is the securities of which are tokenised. There are a lot of different ways to go about doing it. The question is, is the SEC going to allow all of those, or is it going to limit tokenisation to just, I don't know, DTC issuing tokens of the securities that it custodies.

Client [00:19:33]: If the DTC [Depository Trust Company] issues it, then that would have to be at the behest of the actual company, such as Apple, right?

Expert [00:19:39]: Yes.

Client [00:19:40]: Does the innovation exemption give any clarity to that question you mentioned?

Expert [00:19:52]: I read the press release, so don't quote me on the full thing is if something like DTCC tokenises the security at the request of the issuer, then everything is golden. If it's something different, the issuer can ask the protocol to delist the token.

00:20:21] Based on what you're saying, it seems that in the recent debate on Twitter between AMC and Robinhood, the SEC seems to be siding with AMC.

Expert [00:20:37]: Correct. Again, I've only read the press release. I can't imagine the SEC would really shut down what Robinhood is doing. They're offering a tokenised share of a company. That's just what they're doing. I think you could say the tokenised share of the SPV is not an NMS security. Sorry, I should have said that the innovation exemption just applies to NMS securities. Normal stocks that are traded on exchanges. Vlad is tokenising the stock of a security that does not trade on an exchange. Therefore, he can do whatever he wants.

Client [00:23:36]: Yes, you can tokenise a stock or an SPV [special purpose vehicle] that owns a stock, but that doesn't even matter at this point. What's the conclusion here?

Expert [00:23:49]: That Robinhood needs to clarify exactly what it's doing and not say we're tokenising AMC.

Client [00:24:01]: From what I understand, the SEC won't let you do whatever you want. Simultaneously, it's also possible that with better disclosures, Robinhood's structure could end up working, which we'll see based on the language. It might have to market it differently. Because if it's somehow less popular, Robinhood can't go around saying it is an AMC token, and it has to claim that it is an AMC SPV token, or however it has to disclose it. Do you agree?

Expert [00:24:42]: Bingo. Yes, exactly.

00:24:46] I believe there are single-stock equity-linked notes which are allowed, and these are single-stock ETFs [exchange-traded funds]. Are there any legal differences between those and tokenised SPV [special purpose vehicle] equities?

Expert [00:25:23]: Did you say exchange-traded note or economically equivalent note?

Client [00:25:52]: Is there a note-based product linked to a single stock that an ordinary person can buy?

Expert [00:26:04]: Yes. I don't know. I imagine someone could create the product. The SEC won't stop you from creating the product. The SEC might just change the way the product is marketed.

00:26:27] Has the SEC ever had issues with single-stock ETFs in their marketing and shareholder rights?

Expert [00:26:38]: I don't think so. I mean as long as you disclose exactly what you're doing, the SEC should be fine with it. I was going to say also, to be clear, my read of the innovation exemption that came out earlier today is that it's just about what exchanges can offer while being exempt from certain parts of the securities laws. They can still offer whatever normal products they want. They just have to comply with all Exchange Act rules.

Client [00:27:26]: Are they exempt from certain parts of the Exchange Act rules?

Expert [00:27:31]: That's my read. This is how the SEC allows dark pools and the like is that they are exempt from certain parts of the securities laws.

Client [00:27:48]: Given this exemption, will it lead to a boom in the US tokenised equity offerings?

Expert [00:28:07]: I don't know about a boom, but I imagine, yes, there will be issuers who want tokens of their securities, but want them to be actual tokens of the securities, not the economically linked things that Robinhood is trying to offer. I don't see why Apple wouldn't want to issue a tokenised version of its stock as long as it's controlling that actual token and the rights that go along with that token and that the token is exactly the same as a security that's traded on NYSE or wherever.

00:29:02] Regarding perpetual single-stock futures with single-stock ETFs, why do you think it's so important to be the actual tokens of securities vs just economically?

Expert [00:29:22]: For AMC, it's important because AMC relies a lot on its retail shareholders to vote their stock. I think for other companies that are not meme stocks, I don't think it's as important.

Client [00:29:45]: How important is it for the actual buyer of the security?

Expert [00:29:49]: Depends if you're going to vote your share.

Client [00:30:01]: We assume that the majority of people don't care at all about their shareholder rights. However, how important is the idea of this shareholder right to someone?

Expert [00:30:13]: Yes.

Client [00:30:15]: Have you ever heard of, or has anyone ever done a survey on that?

Expert [00:30:23]: I don't know. Not that I'm aware of, but there probably has been.

00:30:33] What problems do tokenised equities solve that regular stocks can't?

Expert [00:30:43]: Instant trading. If you actually tokenise, or if DTCC is issuing tokens of the actual securities, they carry the same legal rights and everything, you have pretty much instantaneous settlement vs having to wait until the end of the day or T+1 when they do actual settlement. It also means that you can trade on any DeFi protocol that exists on a blockchain vs having to rely on the SEC registered exchanges.

Client [00:31:40]: How do we get a sense of how important these two factors are for what percentage of people who trade actually care about these things?

Expert [00:31:54]: My guess, and this is just a guess, is that institutional shareholders or institutional advisers care, but I don't think retail generally cares.

00:32:20] Why would Robinhood, Schwab and Morgan Stanley be interested in pushing these to their clients if somehow they get superior economics owing to the tokenised equities taking off?

Expert [00:32:45]: I would be surprised if Schwab did because the point of tokenisation is that you can do all sorts of funky trades on a blockchain. Once a Schwab customer moves that tokenised stock off of its platform, Schwab has lost its attachment to the client. I don't think Schwab would. I imagine Robinhood would want to propose this because Robinhood's sales pitch in a lot of ways is we let you do whatever you want with securities.

00:33:37] Let's say I'm a Schwab customer who bought 10 shares of Apple and then sold them. Would Schwab's economics differ, had they done the same with 10 tokens of Apple? How do you think about it economically?

Expert [00:34:12]: My understanding, and this is just third-hand, so take it with a grain of salt, is that blockchain settlement ends up being cheaper for brokers than traditional security settlement. I don't know to what extent that is? Again, I can't even verify that it's true. It's just what I've heard. If there is actual tokenisation of the real stocks, then Schwab might want to have customers own those because it's cheaper for it to do its own settlement. It wouldn't offer tokens to customers. It would just say, you own Apple stock without saying it's tokenised Apple stock or whatnot. It would just know on the back end, what's going on.

Client [00:35:08]: Wouldn't Schwab need to disclose upfront whether I bought a token or a regular stock, provided it's an Apple-issued token?

Expert [00:35:22]: No, I don't think so. I could not a stock is a stock as long as it carries the same economic and legal and everything consequences. No one really owns the stock anyway. It's all owned by DTCC just through a series of legal claims through second and third-party entities anyways.

00:36:00] Will the tokens benefit from the liquidity of the underlying stock?

Apple stock trades billions of dollars per day. Right now, its token doesn't exist. If it did, it would probably trade a few million dollars in the first day. It's a much less liquid pool, I believe. Are they fungible and can I swap them, or will they just be less liquid?

Expert [00:36:41]: I think what the SEC is trying to do here is to make them fungible. The Clarity Act would have explicitly done that in statute, but the SEC can write rules basically making that true as well. The SEC is clearly starting on that process. Okay. It wants tokens and physical securities to be fungible. That is its end goal.

Client [00:37:20]: I'm intrigued because brokers wouldn't just automatically give tokens to their clients, since they have to give best execution. Usually, you go to a more liquid security if you can, assuming a narrower bid-ask. But if it's fungible, then it doesn't matter, right?

Expert [00:37:44]: Yes. It might be the case that the price on a blockchain is a couple of pennies cheaper than on NYSE and BSX would apply there as well.

Client [00:38:01]: Do you think it will be cheaper on a blockchain until before fungibility?

Expert [00:38:07]: I got no idea. This is all just hypothetical because this doesn't really exist yet.

Client [00:38:19]: Why would clients like us with our brokerage accounts want a token if we're not trading a lot or trading on weekends, and settlement periods matter if I'm not one of those? What you're introducing is this idea that, you don't want it, you're getting it anyway, and you won't even know because the benefit from it. They want to push this down on me and I may not even care because it looks the same to me.

Expert [00:38:49]: Yes, exactly.

00:38:55] Are you familiar with Broadridge?

It's responsible for almost all shareholder communications in the US. It's like the plumbing for that. When Apple wants to communicate with the shareholders, it doesn't go directly – there's a purposeful opacity. Only Schwab knows who owns the stock. Schwab has to do it but won't do it on its own. Schwab actually gets a little kickback on that. That's the world we're in today. There are a lot of questions about Broadridge, and what its world will look like if a lot of equities move to tokens.

Client [00:38:55]: Now, if we lived in a world where it's predominantly the DTCC [The Depository Trust & Clearing Corp]-issued tokens that are actually affected by the issuer, such as Apple or Johnson & Johnson, then it's simpler to analyse. However, being on a blockchain is fundamentally different from the current construct. What do you think about it?

Expert [00:40:37]: I haven't been thinking about that really at all. My sense here is that unless you are AMC, or another meme stock, you don't really care about tokenisation vs traditional issuance. In fact, you just want to pay someone else to deal with it. I think that's why most stock is just issued to DTCC and lets DTCC take care of being that kind of intermediary. Other companies can provide that service. There are economies of scale and DTCC just does everything. I can't imagine that to the extent you're hiring someone to I don't know, interface with DTCC or provide other securities issuance services, why that would change suddenly because things are tokenised.

00:42:00] Robinhood and Kalshi are vertically integrating more than the traditional brokerages by owning exchanges and clearing houses. I believe Polymarket is in that group as well; I'm unsure whether Schwab or ETrade really did or does. What's the nature of the vertical integration phenomenon?

Expert [00:42:42]: Yes. I actually know a lot about that, which is the SEC has made it a policy going back decades to ensure to prevent vertical integration in order to ensure against conflict of interest. The CFTC has not taken the same view. The SEC thinks it can go outside the four corners of any exchange of application. The CFTC thinks it has to stay within the four corners. Just because it's this way now, doesn't mean it has to stay this way. Paul Atkins can decide I want vertical integration in the security space and a future CFTC could decide we want to prevent vertical integration. That's kind of the way it is just because of past practice, but it doesn't have to stay that way.

Client [00:43:50]: Has it fluctuated historically, or has the SEC been consistent across decades?

Expert [00:43:56]: The SEC has been consistent across decades.

Client [00:44:00]: Has the CFTC always been consistent in its own way across decades?

Expert [00:44:10]: Yes.

00:44:11] The vertical integration for markets has been regulated by the CFTC. Are prediction markets also regulated by the CFTC?

Expert [00:44:26]: Yes.

Client [00:44:28]: Does it surprise you that there's more vertical integration going on for the big providers of prediction market perpetuals?

Expert [00:44:42]: I am not surprised.

00:46:01] What do you think about the incumbent exchanges and TradFi players competing against Robinhood and Polymarket? Let's say I'm an exchange. I would believe everyone above me would have to direct volumes my way or to a competitor exchange. Is Robinhood vertically integrating a giant threat, or is that overblown?

Expert [00:46:26]: There are problems on the margin. The CFTC has rules in place to say that exchanges have to prevent conflicts of interest. They have rules against conflicts of interest or about giving preferential treatment to their affiliates, but just because you have rules against something doesn't mean it's actually stopped.

Client [00:47:10]: CFTC is a little lenient while SEC is more stringent, but they're trying to be loose with the innovation exemption.

00:47:10] Is there anything else you'd like to touch upon?

Expert [00:47:49]: There are a lot of people who are just trying to understand what clarity means or that what it would mean and now that it failed, what its failure means. I think we talked about that. On the securities market side, that's been a lot of it. It's just crypto and tokenisation.

00:48:18] Are the conversations you're having on tokenisation very varied across asset classes, like tokenisation of equities and treasuries and fixed income, or is it more stablecoins?

Expert [00:48:34]: No, it's been kind of the stuff we have talked about. I think people have kind of figured out what to do with stablecoins now. I think people are trying to figure out what does it mean to tokenise securities.

00:48:53] We have this innovation exemption. Let's say a lot of issuers issue tokens just to see what happens. It's economically better for brokers in some ways; they start pushing it on their clients, either explicitly or stealthily, but not illegally. How widespread would tokenisation be in three years?

Expert [00:49:23]: I think it depends on costs. I don't know the answer to that. If blockchains are cheaper, I imagine a lot of business will move that way. If blockchains are more expensive, I don't think that tokenisation will really take off. I don't know what you guys are paying, but for me, as an individual, I get free buying and selling of securities as just a loss leader for my broker. They're still eating fees on the back end. They're going to do whatever it is that's cheapest for them because they're not charging me anything. I think that will be the real decision-maker here for most securities trading. Then of course, there will always be high-frequency traders, the Susquehannas of the world that will want to dabble in this market, just like they do every other market. Then retail traders who love trading crypto and custodying their own assets without relying on DTCC or whatever.

00:50:59] When a person trades on Schwab, it sends it to Jane Street. Will Schwab still get paid for that order flow?

Expert [00:51:09]: Yes.