As digital assets continue to reshape the financial landscape, compliance professionals are facing new challenges and opportunities. In this exclusive interview, David Labhart, former SEC regulator and current ACA leader, shares his journey through law, finance, and technology, offering insights into the evolving role of compliance in the crypto space. From his early days at the SEC to his hands-on experience in blockchain startups, David brings a unique perspective on how firms can remain proactive in navigating digital asset regulation.
Getting to Know David
What first drew you to the intersection of law, finance, and technology?
I was fortunate to join the SEC’s Office of Compliance Inspections and Examinations (now the Division of Examinations) at a time when high-frequency trading and algorithmic trading were really taking off in the industry. During this period, it became clear to me that technology was going to play a critical role in the securities markets going forward. I’ve always thought that to stay relevant as a compliance professional, it is important to understand the technology that firms are using.
What inspired your transition into the crypto space?
While at the SEC, I was able to get my first exposure to digital assets and blockchain technology and saw the potential. When I entered into a more hands-on role as a CCO of a startup, it was a great opportunity to learn more about the industry. I think technology has the opportunity to revolutionize the securities business, not just through traditional crypto assets like Bitcoin and Ethereum, but also through tokenization and other uses of blockchain technology.
Crypto and Compliance
You’ve seen the crypto industry evolve from both a regulatory and internal compliance perspective. What’s changed the most in the last five years?
The biggest change I’ve seen is the move of digital assets into more traditional finance. Historically, crypto assets were seen as more of a niche product, but through the launch of the exchange traded products in 2024 and the dialogue from regulators this year, it appears that the crypto and blockchain technology will increasingly be integrated into the securities industry.
What were some of the biggest challenges you faced helping a blockchain platform navigate global regulatory frameworks?
The biggest challenge in helping a blockchain platform navigate global regulatory frameworks was applying traditional regulation and legal frameworks to digital assets. This landscape changes with new products and services regularly and trying to manage those assets into regulation that never contemplated the technology has been a challenge.
How do you see the role of compliance professionals evolving as digital assets become more mainstream?
It will be important that compliance professionals learn to adapt to the changing technology. Whether it is through the current crypto assets available or through tokenization, technology will continue to drive industry change. It will be increasingly important for compliance professionals to have a seat at the table when their firms are considering adoption.
At ACA
What brought you to ACA, and how does your role here build on your previous experience in crypto and regulation?
For me, ACA is very similar to working at the SEC. While there, I saw my role as helping firms to meet their regulatory requirements and protect investors. Being at ACA, I can continue that goal and hopefully reach more firms.
Looking Ahead
What trends or regulatory developments in the digital asset space are you watching most closely right now?
I think over the next year, there are going to be numerous regulatory and legislative changes that will propel digital assets into more traditional finance. But the thing I’m watching the most is tokenization. It has the potential to change the way assets are traded, making them more broadly available and increasing their liquidity, but they will also have different and new risks.
If you could give one piece of advice to firms entering the crypto space, what would it be?
Stay focused on your fiduciary duties and Regulation BI requirements, as legislation and regulation protection of investors will remain a key focus for regulators regardless of the asset class.
What excites you most about the future of crypto and digital finance?
That we are just at the beginning of what digital assets are going to be in the industry. The future of blockchain regulation and adoption is being written now.
Closing
David Labhart’s experience underscores an important shift: finance is becoming increasingly digital, and compliance must evolve in parallel. As tokenization, blockchain innovation, and regulatory shifts accelerate, firms will need expertise and forward-thinking strategies to navigate the complexities ahead. At ACA, David and his team are helping clients do just that—bridging traditional compliance with the demands of a decentralized future.
Ready to strengthen your crypto compliance? Connect with our experts to explore how our team can help your firm prepare for regulatory evolution in the digital asset space.
Learn More About Digital Asset Compliance
Watch our recent webcast on Navigating U.S. Digital Asset Regulation and Compliance for more insights from our crypto compliance experts.