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As Congress Talks Up Its Earth-Shaking Crypto Bill, Regulators Are Already at Work

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1 неделя ago

20 марта, 2025

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While the crypto sector’s eyes are drawn to the policy fireworks in the White House and Congress, the financial agencies have been taking consequential bites out of the Biden Administration’s digital assets stance.

One move at a time, the stand-in chiefs of the banking and securities regulators are cutting away policies and significant enforcement work that had previously been used to hem in the digital assets industry. And a U.S. Securities and Exchange Commission roundtable on Friday will further illuminate the delicate legal approach to defining crypto securities, potentially signaling a path forward.

Despite permanent leaders still awaiting Senate confirmation to take over the SEC, Commodity Futures Trading Commission and the banking agencies, each of the agencies has taken active policy steps that have effectively been clearing the decks to start over on crypto. While that’s taking place, greater attention has been devoted to President Donald Trump’s effort toward a U.S. bitcoin (BTC) reserve (which doesn’t yet come with a plan for acquiring new bitcoin) and Congress’ longstanding work toward fully realized U.S. crypto laws (which are seeing strong progress but may take a while to complete).

Adam Pollet, a securities lawyer at Eversheds Sutherland who advises on digital assets projects, called this moment a reset.

«They wanted to sort of clean the slate,» he said in an interview, interpreting the SEC’s outlook this way: «We’re sending you the signal that we want you to go forth and try things, and we won’t stand in the way.»

At the SEC, several actions have dialed the regulator back to an era sometime before the end of President Donald Trump’s first term, when his SEC chief at the time, Jay Clayton, led an enforcement charge against Ripple as an illegal exchange. CEO Brad Garlinghouse said on Wednesday that the agency is dropping that accusation — the latest among several high-profile crypto cases abandoned by the regulator. The SEC is no longer arguing that most crypto tokens are unregistered securities.

But the SEC scrapping its previous enforcement stance doesn’t necessarily establish a new policy. It’s instead more of a policy vacuum in which the regulator has retreated from the field while it awaits legal reinforcements.

SEC backtracks

The same could be said for the agency’s withdrawal of its controversial crypto accounting standard known as Staff Accounting Bulletin No. 121, or SAB 121, or the recent decision to toss out a crypto rulemaking proposal that former Chair Gary Gensler pushed that would have cemented certain digital assets platforms as needing to register with the SEC for handling securities transactions.

Still, both initiatives were seen by crypto platforms and projects as a potential threat to how they do business, and their speedy removals are re-opening doors for the industry.

«I certainly can’t recall a time when something was undone as quickly,» Pollet observed of the agency’s tempo.

The SEC and CFTC have also taken other actions that could be viewed as more forward-moving. The SEC issued a statement on memecoins, warning investors that they won’t be protected if they decide to throw money into those unregulated corners of crypto, explaining that the coins aren’t securities and offering thinking to back that assertion. Though it’s not a formal regulation, the policy position at least gives the industry a further insight into how the agency’s new leadership is evaluating crypto assets, which can be leaned on as companies take on new projects.

«It gives folks more confidence in any decision making,» Pollet said. The Republican commissioners seem to suggest, he said, that «they are going to take a more permissive, open-minded approach when it comes to all things crypto.»

And at its cousin agency, the derivatives watchdog CFTC, Acting Chair Caroline Pham is trying to build a pilot program on stablecoin-backed tokenization — a long-awaited sandbox approach that lets companies try things without anxiety over regulatory crackdown.

The agency awaits the chairmanship confirmation of former Commissioner Brian Quintenz, who worked as the chief of policy for a16z, a leading digital assets investment firm. Before he’d left the agency in 2021, Quintenz was known for his crypto advocacy.

Bank regulators relax

Meanwhile, banking regulators such as the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., which had been accused of improperly trying to keep banks from handling crypto clients, have thrown out previous industry guidance. Earlier this month, the OCC rescinded its policy that told banks that they had to get written approval by federal supervisors before they could get into crypto activities. As a result, banks in the U.S. can feel more free to engage in digital assets, including issuing stablecoins — a new openness already studied carefully by the law firms who advise on such business, such as Debevoise & Plimpton.

At the FDIC, the interim leadership is also «actively reevaluating our supervisory approach to crypto-related activities,» and is looking at withdrawing its previous guidance.

All of it represents a «very clear crypto mandate,» said Erin Martin, a former SEC lawyer who works now at Morgan Lewis. She noted the busy crypto task forces at multiple levels: inside the SEC, a multi-agency group working across the administration and a new crypto caucus in Congress.

Uncertainty

However, during this period of transition, the industry is left with an absence of active federal guidance on crypto. Apart from the oversight of state regulators, what remains is a patchwork of uneven federal court rulings on how tokens may or may not be defined as securities under the so-called Howey rule established by the U.S. Supreme Court. In the end, Congress will need to set the standard.

«Until we have those matters really set in stone, we’re in an area of uncertainty,» said Martin.

While the agency waits, she sees the SEC’s more open stance as a return to «normal operations» in which it’s willing to have conversations with the firms it’s overseeing. She’s counting on the Friday roundtable getting into «the tensions at play between the application of the federal securities laws on the industry and how we can make it workable.»

And she said it should begin with the fundamental question from which everything else springs: What makes a crypto asset a security?

In some contrast with others appointed by Trump to lead parts of the government, the nominee to run the SEC is a more traditional and sedate former commissioner, Paul Atkins. And securities lawyers don’t expect high drama from his arrival.

«Atkins is an institutionalist,» Martin said. «I don’t think he’s going to advocate for a complete gutting of the SEC.»

And since the two Republicans on the commission used to work for him — including the acting chairman, Mark Uyeda — it’s anticipated that he’ll continue in much the same vein they’ve demonstrated in the busy opening weeks of this administration.

«It’s very clear that he is of the view that crypto is something that is here to stay and there should be a thoughtful approach to how we move forward at a federal level,» Martin said.

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Bitcoin Plunges Below $84K after $115B Sell-Off Wipes Out Weekly Gains

Published

8 часов ago

28 марта, 2025

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Hopes for the crypto recovery to continue vanished on Friday, as a market-wide rout erased virtually all gains from earlier this week.

Bitcoin (BTC), hovering just below $88,000 a day ago, tumbled to $83,800 recently and is down 3.8% over the past 24 hours. The broad-market benchmark CoinDesk 20 Index declined 5.7%, with native cryptos Avalanche (AVAX), Polygon (POL), Near (NEAR), and Uniswap (UNI) all nursing almost 10% losses during the same period. Today’s sell-off wiped out $115 billion of the total market value of cryptocurrencies, TradingView data shows.

Ethereum’s ether (ETH) declined over 6% to extend its downtrend against BTC, falling to its weakest relative price to the largest cryptocurrency since May 2020. Underscoring the bearish trend, spot ETH exchange-traded funds failed to attract any net inflows since early March, while their BTC counterparts saw over $1 billion of inflows in the past two weeks, according to Farside Investors data.

The ugly crypto price action coincided with U.S. stocks selling off during the day on poor economic data, with the S&P 500 and the tech-heavy Nasdaq index down 2% and 2.8%, respectively. Crypto-focused stocks also suffered heavy losses: Strategy (MSTR), the largest corporate BTC holder, closed the day 10% lower, while crypto exchange Coinbase (COIN) dropped 7.7%.

The February PCE inflation report, released this morning, showed a 2.5% year-over-year increase in the price index, with core inflation at 2.8%, slightly above expectations. Consumer spending showed a modest 0.4% rise, though inflation-adjusted figures indicate minimal growth, suggesting potential headwinds for economic growth. The Federal Reserve of Atlanta’s GDPNow model now projects the U.S. economy to contract 2.8% in the first quarter, 0.5% adjusted for gold imports and exports, spurring stagflationary fears.

The implementation of broad-scale U.S. tariffs next week—the so-called «Liberation Day’ on April 2, as the Trump administration refers to—also compounded investor concerns across markets.

CME gapfill or another leg lower?

Bitcoin has closely correlated with the Nasdaq lately, so U.S. equities rolling over for another leg down could weigh on the broader crypto market. However, on a more optimistic note, today’s decline could be BTC filling the price gap at around $84,000-$85,000 between Monday’s open and the previous week’s close on the Chicago Mercantile Exchange futures market. Historically, BTC usually revisited similar CME gaps and a drop to $84,000 was in the cards, CoinDesk senior analyst James Van Straten noted earlier this week.

«At this stage it’s difficult to determine if we have already seen a bottom in 2025,» Joel Kruger, market strategist at LMAX Group, said in a market note. Despite the on-going correction, he noted several positive trends such as crypto-friendly policies in the U.S. and more traditional financial firms entering the industry or expanding crypto offerings, which could bode well for digital assets later in the year.

«Any additional setbacks that we might see should be exceptionally well supported into the $70-75k area,» he added.

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President Trump Pardons Arthur Hayes, 2 Other BitMEX Co-Founders

Published

9 часов ago

28 марта, 2025

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Arthur Hayes, the former CEO of crypto exchange BitMEX, has been granted a pardon by U.S. President Donald Trump, a White House official confirmed Friday.

Trump also pardoned Hayes’ co-founders at BitMEX, Samuel Reed and Benjamin Delo. CNBC first reported the pardons.

In 2020, the U.S. Department of Justice (DOJ) brought charges against BitMEX, its three co-founders, and its first employee, Gregory Dwyer, accusing them of violating the Bank Secrecy Act (BSA). Prosecutors alleged BitMEX advertised itself as a place where customers could use its platform virtually anonymously, without providing basic know-your-customer (KYC) information. All four individuals eventually pleaded guilty and were sentenced to fines and probationary sentences. The exchange itself pleaded guilty to violating the BSA last year.

Hayes faced two years of probation; Delo spent 30 months and Reed 18 months. Dwyer got 12 months of probation.

In a statement, Delo said he and his colleagues had been «wrongfully targeted.»

«This full and unconditional pardon by President Trump is a vindication of the position we have always held — that BitMEX, my co-founders and I should never have been charged with a criminal offense through an obscure, antiquated law,» he said. «As the most successful crypto exchange of its kind, we were wrongfully made to serve as an example, sacrificed for political reasons and used to send inconsistent regulatory signals. I’m sincerely grateful to the President for granting this pardon to me and my co-founders.»

The Commodity Futures Trading Commission ordered BitMEX to pay $100 million for violating the Commodity Exchange Act and other CFTC regulations in 2021, separately from its DOJ settlements.

Attorneys representing Hayes, Delo and Reed did not immediately return requests for comment.

The reported pardons come just a day after Trump granted a pardon to Trevor Milton, the former CEO of Nikola Motors who was previously convicted of fraud in 2022. In January, Trump made good on long-standing promises to pardon Silk Road creator Ross Ulbricht, who was 11 years into a draconian sentence of double life in prison plus 40 years, with no possibility of parole. Since Ulbricht’s pardon, former FTX CEO and convicted fraudster Sam Bankman-Fried has been angling for his own pardon, attempting to curry favor with the Trump administration and appearing on Tucker Carlson in an unauthorized jailhouse interview that landed him in solitary confinement.

Former Binance CEO Changpeng «CZ» Zhao, who pleaded guilty to the same charge as Hayes and served four months in prison last year — making him not only the richest person to ever go to prison in the U.S., but also the only person to ever serve jail time for violating the BSA — has denied reports that he, too, is seeking a pardon from President Trump.

But, Zhao admitted in a recent X post that “no felon would mind a pardon, especially being the only one in US history who was ever sentenced to prison for a single BSA charge.”

UPDATE (March 28, 2025, 20:30 UTC): Adds Delo statement and White House official.

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FDIC Reverses U.S. Crypto Banking Policy That Demanded Prior Approvals

Published

11 часов ago

28 марта, 2025

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The Federal Deposit Insurance Corp. will no longer instruct banks to get prior sign-off before they engage in crypto activities — a standard that was set in 2022 and that effectively severed institutions from the digital assets sector as they waited for approvals that never came.

The FDIC, which is the chief federal supervisor of thousands of typically smaller banks and runs the banking industry’s government backstop, had occupied a significant role in the crypto debanking saga. A courtroom fight with crypto exchange Coinbase had recently unveiled dozens of letters between the regulator and banks it supervised. In that 2022 correspondence, the FDIC had instructed them to steer clear of new crypto matters while it hashed out policies, though the agency never developed any and left bankers hanging.

The new industry guidance issued on Friday comes after President Donald Trump elevated a crypto-friendly leadership at the FDIC and other financial regulators and has directed his administration to open doors for the industry.

“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said FDIC Acting Chairman Travis Hill, in a statement. “I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards.”

Banks that were once expected to get pre-approvals on crypto matters can now forge ahead, as long as they’re appropriately considering the risks.

The guidance to seek pre-approvals was a common stance across all three U.S. banking agencies, including the Federal Reserve and the Office of the Comptroller of the Currency. The OCC also acted recently to rescind its similar 2022 guidance, which had emerged as the digital assets sector was beset by failure and high-profile fraud, and global exchange FTX was steering toward disaster.