Braden Perry, Bitcoin Regulation by Enforcement: ETFs, Custody, and Institutional Control
Author(s): Scott Douglas Jacobsen
Publication (Outlet/Website): Vocal.Media
Publication Date (yyyy/mm/dd): 2026/05/02
Braden Perry is a litigation, regulatory, and government investigations attorney with Kennyhertz Perry, LLC, based in Kansas City. A former CFTC Senior Trial Attorney, he brings rare cross-sector experience spanning federal enforcement, white-collar criminal defense, institutional compliance, and financial regulation. He has also served as Chief Compliance Officer and Chief Regulatory Attorney at a global financial institution, giving him practical insight into how emerging regulatory systems affect markets and firms. Perry advises clients on crypto, compliance, investigations, and novel enforcement issues, with particular expertise in Bitcoin, AML and KYC obligations, statutory frameworks, institutional adoption, and regulatory risk.
In this interview, Scott Douglas Jacobsen speaks with Braden Perry about Bitcoin’s shift from enforcement-driven regulation toward clearer statutory frameworks. Perry contrasts the fragmented U.S. approach with the EU’s MiCA model, warning that clarity can become institutional control when compliance costs entrench incumbents. He examines ETFs, custodial concentration, AML/KYC surveillance risks, and mainstream financial absorption, arguing that regulatory hardening may stabilize Bitcoin while weakening its censorship-resistant, permissionless, and decentralized monetary purpose over the long term.
Scott Douglas Jacobsen: You argue Bitcoin transitions from regulation by enforcement toward statutory framework. What does this mean?
Braden Perry: From Enforcement to Statutory Framework: The shift from “regulation by enforcement” means moving away from regulatory agencies defining Bitcoin’s legal status through selective prosecutions and enforcement actions, and more toward guidance and rulemaking. Previously, we’ve had the SEC and CFTC claiming jurisdiction over various aspects of Bitcoin with the CFTC calling it a commodity, the SEC sometimes treating it like a security in enforcement actions. Adding to that Treasury focuses on AML compliance, and all without coherent statutory guidance. A proper framework would establish clear definitions, jurisdictional boundaries, and compliance requirements that market participants can follow.
Jacobsen: What is the difference between the U.S. approach and emerging frameworks in the EU on Bitcoin regulation?
Perry: U.S. vs. EU Approaches: The EU’s Markets in Crypto-Assets (MiCA) regulation represents forward-looking legislation that acknowledges Bitcoin as a distinct asset class with tailored requirements. And as described above, the U.S. approach remains fragmented across multiple agencies with overlapping and sometimes conflicting interpretations. While MiCA creates uniform rules across 27 member states, we still have New York’s BitLicense conflicting with Wyoming’s crypto-friendly statutes, and federal agencies’ jurisdictional fights through enforcement actions rather than clear rulemaking. The EU approach recognizes that Bitcoin requires new regulatory categories, not awkward attempts to fit digital assets into outdated securities law. The U.S. is still trying to regulate Bitcoin through Depression-era frameworks that were designed for completely different financial instruments.
Jacobsen: When does regulatory clarity stop reducing uncertainty and start entrenching institutional control?
Perry: When Clarity Becomes Control: Regulatory clarity crosses into institutional entrenchment when compliance requirements become so complex and costly that only large, established financial institutions can participate. And also, when they can afford to risk the unclear regulatory structure. We’re seeing this with Bitcoin ETFs, and while they provide regulated exposure, they also concentrate Bitcoin ownership in the hands of traditional asset managers who must comply with existing financial regulations. The risk is that “clarity” becomes a barrier to entry that eliminates the permissionless innovation that made Bitcoin valuable in the first place.
Jacobsen: How have Bitcoin ETFs changed the legal meaning of Bitcoin?
Perry: Bitcoin ETFs and Legal Meaning: Bitcoin ETFs fundamentally changed Bitcoin’s legal status from an experimental digital asset to a regulated investment product. This transformation brings Bitcoin under the weight of securities regulation, investment advisor oversight, and institutional compliance requirements. ETFs essentially domesticate Bitcoin, making it relatively safe for institutional capital but also subject it to the same regulatory capture that affects traditional financial products.
Jacobsen: What risks arise from the increasing centrality of custodians,and other intermediaries?
Perry: Custodial and Intermediary Risks: The growing centrality of custodians creates systemic risks that undermine Bitcoin’s core value proposition. When major ETFs hold hundreds of thousands of Bitcoin through a handful of qualified custodians, you’ve recreated the “too big to fail” problem that Bitcoin was designed to solve. These intermediaries become single points of failure, regulatory pressure points, and potential targets for government seizure or control.
Jacobsen: You mention maturing AML and KYC requirements. What is the proper line between legitimate compliance oversight and excessive financial surveillance?
Perry: AML/KYC: Compliance vs. Surveillance: There should be transaction- and risk-based monitoring focused on genuinely suspicious activity, not blanket surveillance of all Bitcoin users. Current AML requirements often exceed what’s necessary for legitimate compliance, and require invasive personal information for small transactions, maintaining permanent records of all activity, and reporting patterns of legal behavior that happen to involve privacy-oriented techniques. Effective AML should target actual money laundering, not create comprehensive financial surveillance of law-abiding citizens.
Jacobsen: Does the absorption of Bitcoin into mainstream financial infrastructure strengthen its long-term legitimacy?
Perry: Mainstream Infrastructure and Legitimacy: Absorption into mainstream financial infrastructure provides short term legitimacy but long-term vulnerability. While institutional adoption validates Bitcoin’s value proposition, it also makes Bitcoin subject to the same systemic risks, regulatory capture, and political pressures that affect traditional finance. The question is whether Bitcoin can maintain its essential properties, including censorship resistance, permissionless access, monetary sovereignty, while operating through institutions that are fundamentally designed to provide the opposite.
Jacobsen: Do you believe regulatory hardening will stabilize Bitcoin as an investable asset?
Perry: Regulatory Hardening and Investment Stability: Regulatory clarity will likely stabilize Bitcoin as an investable asset in the short term, but it may undermine the properties that made Bitcoin worth investing in originally. Clear rules reduce regulatory risk, but they also reduce Bitcoin’s potential to serve as an alternative to the existing financial system. We’re essentially trading Bitcoin’s revolutionary potential for institutional acceptability. And from my enforcement background, I see regulatory maturation as often meaning regulatory capture. The question isn’t whether Bitcoin will become a stable investable asset, but whether that stability comes at the cost of what made Bitcoin valuable as an uncensorable, decentralized monetary system. The long-term risk is that Bitcoin becomes just another regulated financial product that happens to use cryptography, rather than a genuine alternative to traditional monetary systems.
Jacobsen: Thank you very much for the opportunity and your time, Braden.
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