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Good Morning.

Welcome to our 88th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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In Today’s Edition:

• Headline: Senate Confirms Warsh as Fed Chair

• Global Legal Roundup

• Case Study: CFTC Eases Reporting Rules for Prediction Markets

You read and share. We listen and improve. Send us feedback at marco@launchy.app.

HEADLINE

Senate Confirms Warsh as Fed Chair

State of play: The Senate confirmed Kevin Warsh as Fed Chair in a 54-45 vote, installing a crypto-invested Trump ally atop the central bank just as Powell’s term expires Friday.

• Warsh’s disclosures show stakes in dYdX, Lighter, Polychain, and Dapper Labs, plus direct SOL and OP token exposure.

• Powell reportedly plans to remain on the Fed’s board until 2028 despite stepping down as Chair.

• Trump tried to fire Powell and Governor Lisa Cook last year, and the DOJ recently dropped a false-statements probe into Powell tied to the Fed’s headquarters renovation.

What’s Next: A Fed Chair holding SOL, OP, and crypto VC stakes marks a structural shift in how monetary policy intersects with digital assets.

Why it Matters: Warsh’s portfolio reads like a crypto LP sheet, not a central banker’s. Conflicts aside, the Fed finally has a Chair who understands the asset class.

Our Take: Watch the June FOMC for Warsh’s first rate signal and early moves to loosen bank crypto custody rules.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇸 CFTC issues blanket no-action letter on prediction markets.

• 🇺🇸 CLARITY bill still faces hurdles despite Senate committee win.

• 🇺🇸 House Agriculture leaders press Trump to appoint CFTC commissioners.

• 🇺🇸 ABA CEO makes final-hour push for tightened limits on stablecoin rewards.

• 🇺🇸 CFTC backs Kalshi in Ohio fight over prediction markets jurisdictional battle.

• 🇺🇸 Senate votes to confirm Trump-pick Kevin Warsh to succeed Jerome Powell.

• 🇺🇸 Senate Banking Committee advances landmark crypto market structure bill.

Europe:

• 🇵🇱 Poland lawmakers debate crypto bills.

• 🇵🇱 Poland passes MiCA crypto bill as $96 million Zondacrypto probe deepens.

• 🇬🇧 Bank of England set to ease sterling stablecoin rules amid industry concerns

APAC:

• 🇲🇲 Myanmar bill proposes life imprisonment for crypto fraud.

• 🇦🇺 Australia to propose capital gains tax changes affecting crypto investors.

CASE STUDY

CFTC Eases Reporting Rules for Prediction Markets

State of play: The CFTC issued a blanket no-action letter relieving prediction market platforms from swap data reporting duties, giving Polymarket, Kalshi, and 17 other venues federal cover as states continue challenging their legitimacy.

• Event contracts technically qualify as swaps but will now be reported like futures, eliminating a long-standing compliance overhang.

• Beneficiaries include Polymarket US, Kalshi, Gemini Titan, and Bitnomial, with other DCMs able to request the same relief.

• CFTC Chair Michael Selig simultaneously backed Kalshi in its Ohio appeal, framing state sports betting claims as overreach into federal derivatives jurisdiction.

Our Take: The CFTC is methodically clearing the regulatory runway for prediction markets while states fight a losing rearguard action. Treating event contracts like futures is the right call and signals Selig’s CFTC will keep stacking wins for the category.

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Good Morning.

Welcome to our 87th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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In Today’s Edition:

• Headline: White House Targets July 4 Crypto Bill

• Global Legal Roundup

• Case Study: Duke Lawyer: WLFI Is an Unregistered Security

You read and share. We listen and improve. Send us feedback at marco@launchy.app.

HEADLINE

White House Targets July 4 Crypto Bill

State of play: White House crypto adviser Patrick Witt set a July 4 deadline to pass landmark crypto market structure legislation, with the Senate expected to advance its version in June before reconciling with the House.

• The Senate Banking Committee could hold a hearing to amend and vote on the bill as early as next week.

• The main sticking point over stablecoin rewards treatment has been largely resolved after compromise language was released last week, though bank trade groups say it falls short.

• Ethics remains a live obstacle, with Senate Democrats demanding provisions addressing Trump and his family’s crypto interests, estimated by Bloomberg to have generated $1.4B.

• Witt said ethics discussions with Democrats are progressing, but pushed back on language that would single out any one officeholder.

• The House passed its version last year and the two chambers would need to reconcile their bills before a final vote.

What’s Next: Senate Banking Committee vote expected as early as next week, with July as the hard deadline before the legislative window closes ahead of midterm positioning.

Why it Matters: This is the first serious shot at federal crypto market structure law, splitting CFTC and SEC jurisdiction in a way that would reshape how every major exchange and DeFi protocol operates in the US.

Our Take: The ethics issue is the real wildcard. Stablecoin compromise got done, but Democrats tying their votes to Trump family provisions gives the White House a politically inconvenient problem it can’t just draft its way out of.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇸 Duke law lecturer argues WLFI issued a security.

• 🇺🇸 Senator Warren presses Meta over stablecoin trial.

• 🇺🇸 Kraken parent Payward applies for national OCC trust charter.

• 🇺🇸 Treasury demands Binance comply with monitoring guidelines.

• 🇺🇸 Stablecoin deal revives crypto bill despite lingering ethics disputes.

• 🇺🇸 CFTC looks to cement non-custodial software developer protections.

• 🇺🇸 Crypto whale sues Coinbase for allegedly refusing to return stolen DAI.

• 🇺🇸 FINRA green lights Securitize for tokenized IPO underwriting and custody.

• 🇺🇸 Senate Banking Committee sets a date to amend & vote crypto legislation.

• 🇺🇸 White House aims for July 4 deadline to pass landmark crypto regulation bill.

• 🇺🇸 SEC weighs new rulemaking for onchain market structures and software apps.

Europe:

• 🇮🇹 Bank of Italy calls for EU to explore tokenized SEPA payments.

• 🇬🇧 BoE’s Bailey warns of looming ‘wrestle’ with US over stablecoin rules.

• 🇪🇺 ECB’s Lagarde flags euro-denominated stablecoins as financial stability risk.

APAC:

• 🇰🇷 South Korea tightens oversight of firms moving crypto overseas.

CASE STUDY

Duke Lawyer: WLFI Is an Unregistered Security

State of play: Duke law lecturer Lee Reiners argues World Liberty Financial’s WLFI token meets the SEC’s own Howey Test criteria for an unregistered security, putting the Trump-connected project in direct conflict with the regulator it effectively controls.

• Reiners contends WLFI was sold before the protocol was built, leveraged the Trump name, and gave buyers a reasonable expectation of profit, hitting the core criteria of the Howey Test.

• World Liberty’s decentralization claims are undermined by a self-dealing arrangement with Dolomite, where 5B WLFI tokens were used as collateral to borrow $75M in stablecoins, including World Liberty’s own USD1.

• Justin Sun’s lawsuit alleging World Liberty froze his tokens and blocked governance rights further challenges the project’s claim to decentralized control.

• A Trump-affiliated entity owns 38% of World Liberty and is entitled to 75% of net proceeds from WLFI token sales, and a UAE-linked entity tied to Sheikh Tahnoon bin Zayed bought 49% of the protocol for $500M.

• Reiners acknowledged the SEC, now led by Trump nominee Paul Atkins, likely lacks the independence to investigate a project in which the president holds a direct financial stake.

Our Take: Reiners is right on the legal analysis, but the SEC chair was put there by the same family that profits from WLFI. Everyone knows nothing will happen.

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Good Morning.

Welcome to our 86th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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In Today’s Edition:

• Headline: Clarity Act Yield Deal Unblocks Senate Markup

• Global Legal Roundup

• Case Study: CFTC Sues Wisconsin Over Prediction Markets

You read and share. We listen and improve. Send us feedback at marco@launchy.app.

HEADLINE

Clarity Act Yield Deal Unblocks Senate Markup

State of play: Sens. Tillis and Alsobrooks finalized the long-stalled stablecoin yield compromise Friday, clearing a path for the Senate Banking Committee to mark up the Clarity Act.

• Section 404 bars crypto firms from paying interest “economically or functionally equivalent” to a bank deposit, but carves out activity-based rewards tied to bona fide platform usage.

• Permitted rewards can be calculated by balance, duration, or tenure, giving platforms flexibility to design programs that look much like yield in practice.

• The SEC, CFTC and Treasury must jointly write rules within a year defining qualifying activities, expected to include payments, staking, market-making and loyalty programs.

• Coinbase, which booked $1.35B in stablecoin revenue in 2025 mostly via USDC rewards, called for an immediate markup; CEO Brian Armstrong’s reaction was “Mark it up.”

• Banking regulators must report to Congress within two years on stablecoin impact on deposits, giving the bank lobby a built-in opening to reopen the fight.

What’s Next: Chair Tim Scott has yet to set a markup date, and the bill still needs to be reconciled with the Agriculture Committee’s draft and the House’s Clarity Act before reaching Trump’s desk.

Why it Matters: It unblocks the broader market structure bill stuck since January and sets the template for how stablecoin economics work in the US.

Our Take: “No yield, but rewards calculated by balance and duration” is a fig leaf, since that’s functionally how interest works. Banks lost the substance and won the optics.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇸 Crypto market structure bill nears May push.

• 🇺🇸 Gemini secures Derivatives Clearing Organization license.

• 🇺🇸 BlackRock urges OCC to drop tokenized reserve cap idea.

• 🇺🇸 Coinbase says deal reached on Clarity Act stablecoin yield.

• 🇺🇸 White House advisor hints on Trump’s strategic BTC reserve.

• 🇺🇸 FBI leads arrests of 276 in global crypto ‘pig butchering’ scams.

• 🇺🇸 Senate moves to ban themselves from prediction market trading.

• 🇺🇸 US court sentences Cartier descendant to 8 years in $470M crypto case.

• 🇺🇸 CFTC sues Wisconsin escalating federal-state clash over prediction market.

• 🇺🇸 a16z backs CFTC, says state-by-state rules on prediction markets create barrier.

• 🇨🇦 Canada moves to ban crypto ATMs, labeling them as method for fraud.

• 🇧🇷 Brazil central bank prohibits crypto use in regulated cross-border payments.

Europe:

• 🇨🇿 Czech central bank governor makes case for BTCin sovereign reserves.

APAC:

• 🇰🇷 S. Korean court grants stay on Bithumb’s six-month suspension.

• 🇰🇷 S. Korea seeks 20-year term for Delio CEO in $169M crypto case.

CASE STUDY

CFTC Sues Wisconsin Over Prediction Markets

State of play: The CFTC sued Wisconsin’s governor, attorney general, and gaming administrator on Tuesday, escalating a federal-state fight over who regulates prediction markets.

• The suit follows Wisconsin’s complaints last week against Coinbase, Robinhood, Crypto.com, Polymarket, and Kalshi for offering sports event contracts it calls a “public nuisance.”

• This is the fifth state the CFTC has sued in a month, after Illinois, Arizona, Connecticut, and New York, asserting “exclusive jurisdiction” over event contracts.

• A bipartisan coalition of 37 state AGs filed an amicus brief last week backing Massachusetts’ ruling that Kalshi needs a state license to offer sports contracts.

• CFTC Chair Michael Selig is pursuing rulemaking and arguing the agency’s statute is broad enough to preempt state gambling laws.

• The agency is asking the Wisconsin court for an injunction declaring state gambling bans preempted by federal law as applied to CFTC-regulated event contracts.

Our Take: “Exclusive jurisdiction” over swaps was never written with sports betting in mind, and 37 AGs lined up against the CFTC is a serious political signal. Selig is racing to lock in jurisdiction before courts or Congress force a narrower read.

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Good Morning.

Welcome to our 84th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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In Today's Edition:

• Headline: CFTC Chair Grilled on Prediction Markets 👀

• Global Legal Roundup

• Case Study: Circle Sued Over $280M Drift Exploit 🔎

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HEADLINE

CFTC Chair Grilled on Prediction Markets

State of play: CFTC Chair Michael Selig faced sharp questioning from House Agriculture Committee lawmakers over the agency's ability to regulate prediction markets, oversee Hyperliquid, and whether it has enough staff to handle an expanding crypto mandate.

• Lawmakers pushed back on prediction market contracts allowing bets on events like the death of a foreign leader, with Rep. Jim Costa calling it "profiting from tragedy" and dismissing Selig's rulemaking response as unsatisfactory.

• Republican Rep. Austin Scott raised concerns about Hyperliquid's offshore oil contracts.

• Selig acknowledging the volume could be "detrimental to the US consumer" and flagging efforts to onshore those markets.

• The CFTC currently operates with a single commissioner, Selig, instead of the mandated five, as Trump has yet to nominate replacements.

• Top Democrat Rep. Angie Craig raised staffing concerns, noting the SEC has six times the CFTC's headcount, while Selig argued the agency is hiring and using AI for surveillance.

What’s Next: The CFTC's prediction market rulemaking is the immediate forcing function, with Trump's commissioner nominations the key signal on whether the agency can credibly expand its crypto mandate.

Why it Matters: Selig is defending an increasingly wide perimeter with a skeleton crew and no fellow commissioners. Congress is right to be skeptical, and the prediction market rulemaking process is moving too slowly relative to how fast these platforms are scaling.

Our Take: Prediction market platforms and offshore perps DEXs are now directly in the CFTC's crosshairs, and the push to onshore markets like Hyperliquid signals regulatory pressure is building regardless of current jurisdictional limits.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇸 Texas man gets 23 years for $20M crypto scam.

• 🇺🇸 Sen. Blumenthal presses DOJ and Treasury on Binance monitor.

• 🇺🇸 Washington think tank argues US rules hinder everyday payments.

• 🇺🇸 CFTC chair grilled by lawmakers on prediction markets, Hyperliquid.

• 🇺🇸 Solana Institute-backed super PAC pours $8M against Sherrod Brown.

• 🇺🇸 Clarity Act's stablecoin yield language pushed back; ban on idle balances.

• 🇺🇸 Virginia to hold dormant crypto 'in-kind' for at least one year under new law.

• 🇺🇸 Circle hit with class action lawsuit over alleged inaction in $280M Drift exploit.

Europe:

• 🇬🇧 UK lawmaker calls for FCA probe of Farage's crypto promotion.

• 🇬🇧 UK FCA seeks fresh feedback on crypto rules ahead of October 2027 rollout.

• 🇵🇱 Polish PM says crypto firm tied to mafia and SS backed political rivals.

• 🇫🇷 French minister urges banks to expand euro stablecoins, tokenized deposits.

APAC:

• 🇰🇷 South Korea to pilot blockchain-based deposit tokens.

• 🇰🇷 Coinone hit with $3.5M fine, 3-month partial suspension over AML violations.

• 🇵🇰 Pakistan allows banks to open accounts for licensed VASPs, ending 2018 ban.

CASE STUDY

Circle Sued Over $280M Drift Exploit

State of play: Circle is facing a class action lawsuit from Drift Protocol investors after law firm Gibbs Mura alleged the stablecoin issuer failed to freeze stolen USDC fast enough following the $280M April 1 exploit, one of the largest hacks in DeFi history.

• ZachXBT alleged Circle had 6 hours to freeze the funds before the attacker moved over $230M in USDC from Solana to Ethereum via Circle's cross-chain transfer protocol.

• The lawsuit points to Circle freezing 16 unrelated wallets in a separate civil case nine days earlier as evidence the company had both the capability and willingness to act.

• Circle CEO Jeremy Allaire defended the decision, saying the company only freezes wallets at the direction of law enforcement or courts, calling unilateral action a "significant moral quandary."

Our Take: Allaire's legal-process defense is coherent but convenient. Circle froze wallets in a civil case nine days prior, making the inaction here harder to justify on principle alone.

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Good Morning.

Welcome to our 83rd edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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In Today's Edition:

• Headline: Clarity Act Enters Critical Week 👀

• Global Legal Roundup

• Case Study: Yuga Labs, Ryder Ripps Settle NFT Suit 🐵

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HEADLINE

Clarity Act Enters Critical Week

State of play: Stablecoin yield negotiations are reaching a breaking point as lawmakers return to Washington, with the Senate Banking Committee targeting a vote before month's end and key industry players finally lining up behind the bill.

• A White House report found stablecoin yields would raise bank lending by just $2.1B (0.02% net), but banking groups rejected the analysis, insisting a yield ban is non-negotiable.

• TD Cowen puts passage odds at one-in-three this year, warning the report may signal Trump wants full yield permissibility, which would kill the current compromise and push the bill to 2027.

• Coinbase CEO Brian Armstrong publicly backed the Clarity Act for the first time, following Treasury Secretary Bessent's WSJ op-ed urging Congress to act, though no formal policy update has been issued.

• Developer protections are emerging as the next flashpoint, with Trump crypto adviser Patrick Witt warning that criminalizing code would push innovation offshore.

• Sen. Cynthia Lummis, not seeking re-election, warned this is the last shot at the Clarity Act until at least 2030.

What’s Next: The Senate Banking Committee votes before month's end, but a deal still hinges on banks accepting yield language, developer protections are the next fight after that.

Why it Matters: The Clarity Act sets the jurisdictional framework for the entire US crypto market; without it, the SEC/CFTC turf war continues and exchanges operate in legal limbo.

Our Take: Coinbase's endorsement is a pressure move, not a milestone, the real blocker is small banks, and no amount of White House economists or CEO posts will move them without an explicit yield ban or a political override from the top.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Crypto bill negotiations enter critical week.

• 🇺🇲 SEC admits 'flaws' in past crypto enforcement.

• 🇺🇲 Brian Armstrong backs Bessent's crypto bill push.

• 🇺🇲 BA challenges Citadel over SEC's innovation exemption.

• 🇺🇲 US Secret Service freezes $12M in crypto tied to global fraud.

• 🇺🇲 Yuga Labs settles with Ryder Ripps in long-running trademark case.

• 🇺🇲 US Treasury unveils proposed stablecoin rules targeting ML, sanctions.

• 🇺🇲 DOJ rejects Tornado Cash’s Roman Storm's latest bid to dismiss charges.

• 🇺🇲 DOJ, CFTC argue Kalshi's sports and event contracts are financial swaps.

• 🇺🇲 White House stablecoin report unlikely to change hurdles for crypto bill.

• 🇺🇲 Democrats press Selig on CFTC oversight of offshore prediction war bets.

• 🇺🇲 FDIC proposes ruleset for stablecoin issuers following GENIUS enactment.

APAC:

• 🇭🇰 HSBC & Anchorpoint Financial gain first HK stablecoin issuer licenses.

• 🇰🇷 Bithumb turns to legal action to recover lost bitcoin in 'fat finger' incident.

• 🇰🇷 S. Korea to bring RWAs and stablecoins under existing financial frameworks.

CASE STUDY

Yuga Labs, Ryder Ripps Settle NFT Suit

State of play: Yuga Labs and conceptual artist Ryder Ripps have settled a four-year trademark battle over a copycat Bored Ape collection, with Ripps now barred from using BAYC imagery going forward.

• Yuga sued Ripps and partner Jeremy Cahen in 2022 after they launched RR/BAYC, a copycat collection Ripps claimed was protected "expressive appropriation art" under the First Amendment.

• A US district judge ruled in Yuga's favor in 2023, ordering Ripps and Cahen to pay nearly $9M in profits, penalties, and fees, though the Ninth Circuit later vacated the penalty and sent the case to trial.

• The Ninth Circuit's ruling that NFTs are protectable under trademark law stands as the key legal precedent to emerge from the case, regardless of the settlement's undisclosed terms.

Our Take: The First Amendment defense was always a long shot, and the settlement confirms it. The real outcome here isn't the ban, it's the Ninth Circuit cementing NFT trademark protectability, the precedent every major collection will lean on next time.

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Good Morning.

Welcome to our 82nd edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

Share the newsletter

In Today's Edition:

• Headline: CFTC Sues States Over Prediction Markets 👀

• Global Legal Roundup

• Case Study: California, Congress Target Prediction Market Insiders 🔎

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HEADLINE

CFTC Sues States Over Prediction Markets

State of play: The CFTC is suing Illinois, Arizona, and Connecticut to assert exclusive federal jurisdiction over prediction markets, marking the first time the agency has taken direct legal action against states over the issue.

• Illinois sent cease-and-desist letters to Kalshi, Crypto.com, and Polymarket, prompting the CFTC's federal suit.

• CFTC Chair Selig warned that fragmented state regulation weakens consumer protection and raises fraud risk.

• The agency is seeking a permanent injunction to block Illinois from enforcing state gaming laws against federally regulated platforms.

What’s Next: Other states testing prediction market restrictions should expect similar federal pushback, and courts will ultimately decide whether the Commodity Exchange Act's "exclusive jurisdiction" clause overrides state gaming law.

Why it Matters: The outcome will set a precedent for who controls the fastest-growing segment of crypto-adjacent derivatives, with billions in trading volume and platforms like Polymarket operating in a legal gray zone.

Our Take: The CFTC is making the right call procedurally, but the optics are messy: suing three states while the same platforms face credible insider trading allegations lets regulators claim jurisdiction without addressing the conduct that made states act in the first place.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Treasury issues GENIUS Act rule proposal.

• 🇺🇲 Sen. Warren targets Bitmain-Trump family ties.

• 🇺🇲 Crypto super PAC names Tether exec chairman.

• 🇺🇲 Coinbase CLO says Clarity Act 'very close' to reaching deal.

• 🇺🇲 California bars officials from prediction market insider betting.

• 🇺🇲 US Labor Department proposes opening 401(k) plans to crypto.

• 🇺🇲 Alabama gov signs bill creating legality for DAO-like nonprofit entities.

• 🇺🇲 US indicts 10 foreign nationals for alleged crypto wash trading scheme.

• 🇺🇲 Coinbase receives conditional approval for national trust charter from OCC.

• 🇨🇦 Canada proposes ban on crypto political donations in election integrity bill

Europe:

• 🇷🇺 Russia moves to narrow crypto trading to regulated intermediaries.

Middle-East & Africa:

• 🇦🇪 VARA imposes margin, governance, and disclosure rules on crypto trading.

APAC:

• 🇭🇰 Hong Kong misses March target for first stablecoin licenses.

• 🇦🇺 Australia passes bill requiring financial licenses for crypto platforms.

• 🗾 Japan’s financial watchdog flags KuCoin for OTC derivatives transactions.

CASE STUDY

California, Congress Target Prediction Market Insiders

Executive Department State of California

State of play: California and federal lawmakers are moving to close insider trading loopholes in prediction markets, as suspiciously timed bets tied to military strikes and policy decisions draw scrutiny from both state and federal officials.

• California's Newsom signed an executive order barring state appointees from using non-public information to bet on prediction markets.

• The bipartisan PREDICT Act would ban federal officials and their families from trading event contracts tied to political outcomes, with profits forfeited and a 10% fine imposed on violators.

• Suspected insiders netted millions betting ahead of US military strikes in Venezuela and Iran, prompting Kalshi and Polymarket to tighten trading restrictions.

• Both platforms rolled out new restrictions and expanded surveillance measures this week targeting participants with direct influence over outcomes.

• Kalshi and Polymarket surpassed $20B in combined monthly trading volume for the first time, marking a seventh consecutive record high.

Our Take: Regulation here is overdue, but the sequencing is backwards: platforms crossed $20B in monthly volume and suspected insiders already cashed out millions before lawmakers moved.

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Good Morning.

Welcome to our 81st edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

Share the newsletter

In Today's Edition:

• Headline: Federal, State Target Prediction Markets Insiders 👀

• Global Legal Roundup

• Case Study: Court Rejects Crypto Dev Safe Harbor 🔎

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HEADLINE

Federal, State Target Prediction Markets Insiders

Source: The Block

State of play: Bipartisan lawmakers and state governments are closing in on prediction market insider trading, introducing legislation and executive orders to bar officials from profiting on nonpublic information.

• The PREDICT Act bars Congress members, the president, federal employees, and their families from trading contracts tied to political or policy outcomes.

• Violators face a civil fine of 10% of the transaction value and full forfeiture of profits to the US Treasury.

• California Governor Newsom issued an executive order barring state appointees from using confidential information to bet on prediction markets.

• Onchain analysis flagged accounts with over 90% success rates on military event bets, netting nearly $1M in profits with no confirmed link to officials.

• Kalshi and Polymarket have both tightened restrictions and surveillance tools, as the CFTC moves to establish clearer federal rules for the sector.

What’s Next: The PREDICT Act heads to a Congressional vote as the CFTC pushes toward federal rules, with more states likely to follow California's lead.

Why it Matters: With Kalshi and Polymarket surpassing $20B in combined monthly volume, unchecked insider activity turns prediction markets from forecasting tools into extraction mechanisms for officials with nonpublic information.

Our Take: Enforcement is the real question. Fines only work if violations are detected, and 90%-plus success rates with no confirmed official link signals a gap between what's happening and what's provable.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Sen. Warren targets Bitmain-Trump family ties.

• 🇺🇲 White House clears path for crypto in 401(k) market.

• 🇺🇲 Coinbase declines to support updated Clarity Act draft.

• 🇺🇲 Crypto frustration boils over as stablecoin fight stalls bill.

• 🇺🇲 Stand With Crypto launches voter hub, endorses candidates.

• 🇺🇲 David Sacks leaves post to go to broader White House tech role.

• 🇺🇲 Nvidia faces certified class action over crypto revenue disclosures.

• 🇺🇸 CFTC forms new task force to shape crypto, AI and prediction markets.

• 🇨🇦 Canadaproposes crypto political donation ban.

• 🇧🇷 Brazil passes law allowing seized crypto to be used for public security.

Europe:

• 🇬🇧 UK’s Starmer backs pause on crypto political donations.

APAC:

• 🇦🇺 Binance fined $6.9M over compliance and onboarding failures.

• 🇯🇵 Japan’s financial watchdog flags KuCoin for OTC derivatives transactions.

CASE STUDY

Court Rejects Crypto Dev Safe Harbor

IMG: Michael Lewellen

State of play: A Texas court dismissed crypto developer Michael Lewellen's lawsuit seeking preemptive legal protection for his non-custodial software, leaving a significant regulatory gap unresolved for builders in the space.

• Lewellen sued to block fed money transmitter laws on his non-custodial crowdfunding software, arguing compliance was impossible due to its privacy features.

• Chief Judge O'Connor dismissed the case, ruling Lewellen failed to show a substantial prosecution threat under the DOJ's memo on unwitting violations.

• The dismissal was without prejudice, leaving room to refile if enforcement threats grow.

• Coin Center argued the DOJ memo offers no real protection, citing active Tornado Cash and Samourai Wallet prosecutions.

• Lewellen is pushing Congress to pass the Blockchain Regulatory Certainty Act to exempt non-custodial developers from money transmitter rules.

Our Take: The dismissal exposes a core problem: a non-binding DOJ memo is being treated as a substitute for actual legal clarity. Non-custodial developers remain in a gray zone where the rules are unwritten and the consequences are criminal.

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Good Morning.

Welcome to our 75th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

Share the newsletter

In Today's Edition:

• Headline: SEC Flags Prediction Markets as Regulatory Flashpoint 👀

• Global Legal Roundup

• Case Study: Banks and Crypto May Converge 🔎

You read and share. We listen and improve. Send us feedback at [email protected].

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HEADLINE

SEC Flags Prediction Markets as Regulatory Flashpoint

Source: Bitcoin.com

State of play: SEC Chair Paul Atkins called prediction markets a “huge issue” during a Senate Banking Committee hearing, signaling rising regulatory focus as platforms like Kalshi and Polymarket expand rapidly.

• Atkins said the space involves potential overlapping jurisdiction between the SEC and the CFTC.

• While prediction markets largely fall under the CFTC, certain contract structures could trigger securities laws depending on wording and design.

The regulatory tension centers on whether event contracts are federally regulated derivatives under the Commodity Exchange Act or whether states can pursue gambling law violations.

• Some states have already launched legal challenges, particularly around sports related markets.

• Atkins emphasized that the SEC and CFTC are now coordinating closely, meeting weekly under “Project Crypto.”

• CFTC Chair Michael Selig echoed the need for clear rules that prevent markets from moving offshore while maintaining investor protections.

What’s Next: Leadership gaps at both agencies could further shape how aggressively the sector is regulated going forward.

Why it Matters: Prediction markets are becoming a jurisdiction test between the SEC and CFTC. How they are classified will shape future rules for hybrid crypto financial products.

Our Take: If the CFTC keeps primary oversight, growth continues with clearer rails. If the SEC expands its reach, expect tighter compliance and slower momentum.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Democrats press SEC's Atkins over dropped crypto cases.

• 🇺🇲 Banks demand restrictive parameters on stablecoin rewards.

• 🇺🇲 Crypto super PAC launches $1.5M effort to unseat Al Green.

• 🇺🇲 Banking lobby urges OCC to address risks around crypto firm.

• 🇺🇲 CFTC Chair appoints crypto heavyweights to innovation advisory panel.

• 🇺🇲 Sens. Warren, Kim demand CFIUS review of UAE's $500M stake in WLFI.

Europe:

• 🇬🇧 UK FCA seeks to block HTX after alleged breaches of marketing rules.

• 🇳🇱 Dutch House of Representatives advances controversial 36% tax law.

• 🇪🇺 EU considering a ban on crypto tx with Russia to tighten sanctions evasion.

APAC:

• 🇻🇳 Vietnam to tax crypto like stocks with 0.1% trading levy.

• 🇹🇭 Thailand moves to integrate crypto into local derivatives market.

• 🇲🇾 Malaysia's CB to launch 3 stablecoin & tokenized deposit initiatives.

• 🇭🇰 HK expands crypto rules to allow margin financing and perp contracts.

• 🇰🇷 South Korea to tighten crypto oversight targeting market manipulation.

• 🇰🇷 South Korea launches probe into Bithumb over $43B fat-finger incident.

• 🇨🇳 China tightens stance on RWA tokenization and offshore yuan stablecoins.

CASE STUDY

Banks and Crypto May Converge

State of play: US Treasury Secretary Scott Bessent told the Senate Banking Committee that traditional banks and crypto firms could eventually offer similar financial products.

• He said the Treasury is already working with small and community banks to integrate them into the digital asset ecosystem.

• Bessent stressed that clear regulation is essential and urged support for the CLARITY Act, warning that firms resisting US oversight could relocate abroad.

• He framed regulation as a balance between innovation and financial safety.

• A key sticking point in the stalled crypto market structure bill is concern over stablecoin yields and potential deposit flight from banks.

• Bessent said deposit volatility is “very undesirable” and pledged to prevent disruptions that could weaken community bank lending.

Our Take: Washington is positioning crypto as future banking infrastructure, not an outsider system. The core issue is deposit stability versus yield competition.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Patrick Scott’s read on The Mog Economy.

• Daniel Barabander’s read on The 7 Powers in Crypto.

• Coindesk’s read on the US regulator declares do-over on prediction markets.

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Good Morning.

Welcome to our 64th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

Share the newsletter

In Today's Edition:

• Headline: China Tightens Crypto Ban 👀

• Global Legal Roundup

• Case Study: SEC’s Hester Peirce Calls Crypto Self-Custody a Basic Right 🔎

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HEADLINE

China Tightens Crypto Ban

China’s Central Bank / IMG: Caixin Global

State of play: China’s central bank doubled down on its long-standing crypto ban after a multi-agency meeting, warning that digital assets still have no legal status in the country.

• The PBoC called stablecoins a direct threat to financial security, saying they fail basic KYC and AML requirements and enable illicit flows.

• The statement is China’s strongest since the 2021 blanket ban and comes as officials pressure Hong Kong to slow tokenization and stablecoin activity.

South Africa’s central bank raised its own concerns, naming crypto and stablecoins as a new financial risk in its 2025 stability report.

• The country now has 7.8M registered exchange users and roughly $1.5B held in custody.

• The bank warned that the lack of a full regulatory framework could let risks build unnoticed, although government agencies remain more open.

What’s Next: China will keep tightening around anything that looks like stablecoin activity, and Hong Kong may get pushed to cool down its tokenization plans.

Why it Matters: Stablecoins are now the main pressure point for regulators. China sees them as a threat to control.

Our Take: Stablecoins are becoming too big to ignore. China will stay strict. South Africa will try to regulate.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Kevin Hassett rises to the front in Fed Chair search.

• 🇺🇲 Nasdaq crypto chief pledges to move fast on tokenized stocks.

• 🇺🇲 Polymarket allowed to resume US operations following CFTC reversal.

Europe:

• 🇨🇭 Switzerland delays crypto tax info sharing until 2027.

• 🇬🇧 UK widens crypto reporting rules to cover domestic transactions.

• 🇪🇺 Securitize wins EU approval to operate tokenized trading and settlement system.

APAC:

• 🇺🇿 Uzbekistan greenlights stablecoins for payments.

• 🇯🇵 Japan to tighten crypto exchange oversight with new reserve mandate.

• 🇦🇺 Australia moves to fold crypto platforms into financial licensing regime.

• 🇰🇷 S.Korea stablecoin framework stalls as regulators split over banks’ role.

• 🇹🇲 Turkmenistan legalizes crypto trading under tight state control from 2026.

CASE STUDY

SEC’s Hester Peirce Calls Crypto Self-Custody a Basic Right

Hester Pierce / IMG: DL News

State of play: SEC commissioner Hester Peirce reaffirmed that self-custody and financial privacy are fundamental rights, saying Americans should never be forced to rely on intermediaries to hold their assets.

• She argued that privacy should be the default online, not a sign of wrongdoing.

• Her comments come as the Digital Asset Market Structure Clarity Act, which includes self-custody provisions, is delayed until 2026.

• At the same time, Bitcoin holders are increasingly shifting from self-custody to ETFs after the SEC approved tax-efficient in-kind creations.

• Analysts say this is the first major decline in self-custodied Bitcoin in 15 years.

Our Take: Self-custody and privacy are basic rights. But the move toward ETFs shows how easily convenience wins. Crypto is now split between holding your own keys and letting institutions handle it.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Nic Carter’s read on Bitcoin and the Quantum Problem.

• Nick Anthony’s read on 55 Years of Financial Surveillance.

• Salah Ghazzal’s & Jake Chervinsky’s read on Policy-driven M&A.

— # (#)

If you enjoy reading this issue, please consider subscribing. It takes 1 minute of your time but it would mean the world to us 🙇

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.