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Ian McGinley, a partner at Akin Gump Strauss Hauer & Feld LLP, said he expects special scrutiny on one of the newest areas of digital assets: decentralized finance platforms, called DeFi for short. These ventures often use the decentralized structure to establish peer-to-peer markets, in which users engage in financial transactions with other parties directly, without an intermediary such as a stock exchange or bank.

• He pointed out that SEC Chairman Gary Gensler has already said the agency is examining them. A small number of DeFis handle much of the total activity in the sector. According to Gensler, the top five DeFi platforms account for about 80 percent of the total trading on all platforms.
• If in fact the decentralized platform is controlled by a small group, I think you are likely to see some actions.
• If an exchange is purely decentralized, then it is very hard for the SEC to make the case that the exchange is selling securities.
• Expects the SEC to pursue cases against non-fungible tokens, which some consider to be the strangest new development in digital assets.
  • With NFTs, an investor or customer buys a marker on a distributed ledger that is attached to artwork or music. The owners of NFTs don't always own the original items, just the digital marker.
  • The NFT structure can be used in other ways, however, such as to represent shares of a company or to serve as currency in video games.

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“It's highly likely we will see some SEC enforcement in NFTs, especially since we’ve seen some state regulators recently take action against some NFT projects for selling unregistered securities,” McGinley said.

SEC Commissioner Hester Peirce has said that fractional NFTs, which represent shared ownership, might be securities, though she said additional guidance from the agency would be helpful.

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