Launchy Regulatory Roundup #87 - White House Targets July 4 Crypto Bill
Duke Lawyer: WLFI Is an Unregistered Security
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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
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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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