Regulatory Actions Impacting Crypto Exchanges

🚨 The CLARITY Act Could Reshape Crypto Regulation Forever After my initial analysis of the 236-page Digital Asset Market Clarity Act of 2025, here's what I think crypto professionals need to know: 🔄 Game-Changing Innovation Instead of asking "Is crypto a security?" the Act asks "𝐇𝐨𝐰 𝐝𝐞𝐜𝐞𝐧𝐭𝐫𝐚𝐥𝐢𝐳𝐞𝐝 𝐢𝐬 𝐭𝐡𝐢𝐬 𝐬𝐲𝐬𝐭𝐞𝐦?" Revolutionary concept: Assets 𝐭𝐫𝐚𝐧𝐬𝐢𝐭𝐢𝐨𝐧 𝐟𝐫𝐨𝐦 𝐒𝐄𝐂 𝐭𝐨 𝐂𝐅𝐓𝐂 𝐣𝐮𝐫𝐢𝐬𝐝𝐢𝐜𝐭𝐢𝐨𝐧 as they become more decentralized. 📊 𝐓𝐡𝐫𝐞𝐞-𝐓𝐢𝐞𝐫 𝐅𝐫𝐚𝐦𝐞𝐰𝐨𝐫𝐤: ✅ 𝐃𝐢𝐠𝐢𝐭𝐚𝐥 𝐂𝐨𝐦𝐦𝐨𝐝𝐢𝐭𝐢𝐞𝐬 (CFTC) - Blockchain network tokens   ✅ 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 𝐂𝐨𝐧𝐭𝐫𝐚𝐜𝐭 𝐀𝐬𝐬𝐞𝐭𝐬 (SEC) - Early-stage tokens   ✅ 𝐏𝐞𝐫𝐦𝐢𝐭𝐭𝐞𝐝 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐒𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧𝐬 - Light regulation  🏦 Business Impact: 𝐂𝐫𝐲𝐩𝐭𝐨 𝐂𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬: • $75M fundraising exemption with 4-year maturity timeline • Clear registration pathways • Founder trading restrictions until "maturity" 𝐓𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐅𝐢𝐧𝐚𝐧𝐜𝐞: • Banks custody crypto WITHOUT balance sheet liability 🎉 • Clear institutional framework • Mixed securities/crypto trading allowed 𝐃𝐞𝐅𝐢: • Broad development exemptions • Self-custody rights protected • Anti-fraud enforcement preserved ⚖️ The Critical Balance: 𝐈𝐧𝐧𝐨𝐯𝐚𝐭𝐢𝐨𝐧 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧 ✅ + 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧 ✅ + 𝐋𝐚𝐰 𝐄𝐧𝐟𝐨𝐫𝐜𝐞𝐦𝐞𝐧𝐭 𝐀𝐮𝐭𝐡𝐨𝐫𝐢𝐭𝐲 ✅ 𝐁𝐒𝐀/𝐀𝐌𝐋 𝐈𝐧𝐭𝐞𝐠𝐫𝐚𝐭𝐢𝐨𝐧 (of course my favorite part): • Exchanges/brokers become BSA "financial institutions" • Full FinCEN compliance (CTRs, SARs, Travel Rule, customer ID) • Self-custody protected 𝐛𝐮𝐭 𝐧𝐨 𝐀𝐌𝐋 𝐢𝐦𝐦𝐮𝐧𝐢𝐭𝐲 • 5-year recordkeeping requirements 𝐂𝐨𝐧𝐬𝐮𝐦𝐞𝐫 𝐏𝐫𝐨𝐭𝐞𝐜𝐭𝐢𝐨𝐧: • Customer crypto segregated from exchange funds • Bankruptcy protection for your assets • Qualified custodian requirements • Real-time surveillance prevents manipulation 𝐀𝐧𝐭𝐢-𝐅𝐫𝐚𝐮𝐝: • All fraud laws apply to ALL crypto activities • No DeFi exemption from enforcement • Self-custody protected but prosecution preserved 🕐 𝐓𝐢𝐦𝐞𝐥𝐢𝐧𝐞 𝐑𝐞𝐚𝐥𝐢𝐭𝐲 𝐂𝐡𝐞𝐜𝐤: 360 days to write comprehensive rules for the most complex crypto framework ever proposed. The implementation will be everything. 💭 𝐌𝐲 𝐓𝐚𝐤𝐞: This isn't just another crypto bill. It's a sophisticated attempt to create regulatory certainty while maintaining American competitiveness. 𝐁𝐮𝐭 𝐬𝐮𝐜𝐜𝐞𝐬𝐬 𝐝𝐞𝐩𝐞𝐧𝐝𝐬 𝐞𝐧𝐭𝐢𝐫𝐞𝐥𝐲 𝐨𝐧 𝐞𝐱𝐞𝐜𝐮𝐭𝐢𝐨𝐧. Much more to come on this! What do you think? Game-changer or too complex to implement effectively? #TravelRule #Regulation #CFTC #SEC #Blockchain #DeFi #Policy #FinTech

🚨 Today, the United States Senate Committee on Banking, Housing, and Urban Affairs released a discussion draft aimed at providing regulatory clarity for digital assets. The draft lays out a broad framework for classifying digital assets, splitting oversight between the SEC and CFTC, strengthening investor protections, and expanding AML obligations across the crypto ecosystem. It also launches a first-of-its-kind public-private pilot program to enhance information-sharing between law enforcement and the crypto ecosystem—a step toward real-time collaboration to stop illicit finance. There is lots in here, but this post focuses on AML. Title II, “Protecting Against Illicit Finance,” outlines AML and sanctions compliance requirements in the space. Section 201 directs Treasury, in coordination with federal financial regulators, to establish a risk-focused examination framework for evaluating how financial institutions comply with the Bank Secrecy Act and counter-terrorism financing laws. This includes assessing suspicious activity reporting, customer due diligence, and compliance under Title 31. Section 202 creates a five-year pilot to improve information-sharing between law enforcement and the private sector. The Attorney General, working with FinCEN and DHS, will designate at least 20 firms—including crypto companies, money services businesses and blockchain intelligence companies—to participate. The pilot program aims to enable real-time threat collaboration. Agencies like DOJ, FBI, and DEA can securely share information on typologies, threats, and risks via portals, secure email, or monthly meetings. Designated participants receive liability protection when sharing threat information in good faith. The model mirrors Section 314(b) but is tailored to the blockchain space. Section 203 further strengthens this ecosystem by establishing an Independent Financial Technology Working Group, chaired by Treasury. The group includes representatives from Treasury, DOJ, IRS, DHS, DEA, and private-sector participants across crypto, blockchain intelligence companies like TRM Labs, finance, and civil society. It will conduct research and develop proposals to counter illicit use of digital assets and other emerging technologies. The group must report findings annually to Congress for four years. Finally, the bill mandates a 180-day public strategy from the White House detailing how adversaries and sanctioned entities exploit digital assets to evade sanctions—and how the U.S. will respond. One of the coolest things about this draft is that it moves beyond market structure by embedding illicit finance prevention, public-private partnership, and operational engagement into the heart of crypto regulation. While not final, the proposal lays a serious foundation for integrating crypto into the US financial system—securely and responsibly. We look forward to working with Senate Banking and policy makers across Capitol Hill to build a safer financial system.

Crypto clarity (kind of) continues. 🧵 In a busy few days for digital asset regulation, the SEC and DOJ each took notable steps: ✔️ April 4 – SEC clarified that certain "covered stablecoins" aren’t securities ✔️ April 7 – DOJ stepped back from “regulation by prosecution” for digital assets ✔️ April 10 – SEC issued disclosure expectations for crypto assets considered securities 🔍 What’s new? ▪️ SEC’s stablecoin stance aligns with proposed legislation that would shift oversight to bank regulators. To be a "covered stablecoin", the token must be redeemable immediately upon request and fully backed by cash or high-quality liquid assets. ▪️ DOJ will now prioritize prosecuting bad actors using crypto rather than targeting the platforms ▪️ SEC disclosure guidance pushes for clarity, plain language, and thorough risk explanations for anyone issuing tokens that are securities 💡 Bottom line: These are meaningful steps toward a clearer regulatory environment—but questions remain, especially on how crypto assets are classified and how stablecoins outside the SEC’s narrow definition will be treated. But my main hope is that Congress can keep legislation moving so that this isn't all subject to change every four years. I'm hopeful. #CryptoRegulation #DigitalAssets #Stablecoins #DOJ #SEC #Compliance #FinTech #PwC

🚨 Just in: SEC Commissioner Crenshaw raises new questions about the SEC's efforts to argue that crypto assets are not securities. Full statement: "Over the last several months, we have heard repeatedly that the Commission, and its new Crypto Task Force, are embarking on a quest to give the crypto industry regulatory clarity. We’ve heard 'change is coming fast' for crypto at the SEC and that the crypto markets will soon be free from the 'limbo' they’ve been 'languishing […] in for years.' In the name of this clarity, we’ve seen staff statement after staff statement, pronouncing that all sorts of crypto assets are not securities. And yet, now we see no objection to the effectiveness of new exchange-traded funds that assert certain crypto assets—ETH and SOL—actually are securities. Does this Commission, in fact, believe that ETH and SOL are securities? How is it that these crypto assets are supposedly not securities when it comes to registration requirements, but conveniently are securities when a registrant sees an opportunity to sell a new product? If you’re confused, join the club. These developments lay bare that we are not actually chasing crypto regulatory clarity -- these assets cannot be both securities and not securities at the exact same time. Rather than clarity, it seems we are simply getting out of the way of anything and everything in the crypto space. In so doing, we are thwarting any meaningful attempt to apply a coherent regime to crypto assets and rewarding a maximally aggressive approach to entering our markets. This results in opportunistic – and deeply inconsistent – legal interpretations. Even our staff can’t reconcile these inconsistencies, though their concerns don’t seem to matter much these days. So far, the Commission and The Crypto Task Force’s journey to clarity has only taken us further and further adrift in increasingly muddy waters of our own making." #digitalassets #securities #securitieslaw #crypto #cryptoassets #payments #blockchain #cryptoregulation #cryptocurrency #DeFi #cryptotrading #cryptoexchange https://lnkd.in/eCukkFAx

The U.S. Department of the Treasury and the Internal Revenue Service (IRS) have issued final regulations requiring brokers who facilitate digital asset transactions to report gross proceeds from sales and exchanges. These regulations, effective 60 days after their publication in the Federal Register, mandate that brokers file information returns and provide payee statements for certain digital asset transactions. The stringent reporting requirements could incentivize DeFi developers and platforms to relocate to jurisdictions with more favorable or clearer regulatory environments. This migration may result in the U.S. losing its competitive edge in the rapidly evolving blockchain and DeFi sectors, along with associated economic benefits and technological innovations. While the regulations aim to enhance transparency and tax compliance in digital asset transactions, they may inadvertently impose significant burdens on the DeFi ecosystem, potentially driving innovation and development to more accommodating international jurisdictions. #defi #digitalassets #IRS

🚨 BREAKING: SEC changes course! And redefined securities disclosure for crypto. After years of regulatory fog and enforcement actions, the Division of Corporation Finance has finally released guidance that translates traditional securities disclosure for the digital asset economy. The implications are profound: 1️⃣ Code is now legal documentation - Smart contracts that define investor rights must be filed as exhibits and updated when modified, just like traditional legal agreements 2️⃣ Admin keys = material information - Who controls protocol upgrades, token minting, or emergency pauses? These questions are now central to regulatory compliance 3️⃣ RWA tokenization faces heightened scrutiny - No more vague claims that tokens "represent" real assets; issuers must detail the precise legal mechanisms connecting on-chain and off-chain rights This isn't just another regulatory burden—it's the beginning of a new disclosure language that acknowledges blockchain's unique architecture while upholding investor protection principles. Chris Brummer and I published our analysis of what this means for token issuers, RWA projects, and the path forward for compliant innovation in digital assets. cc Bluprynt and Tokenized Asset Coalition Link to our post in first comment below👇

The New York State Department of Financial Services continues to enrich its guidance, advice, and requirements for #crypto firms 🗽 🍎 💡 💡 New expectations and procedures have been issued today for public consultation by #NYDFS w/r/t the evaluation of crypto coins before listing and delisting - think additional guidance to the existing DFS Green listing process 💚 ⏰ Proposed legislation open for comment until Oct. 20th - Tick Tock! 📰 Press release: https://lnkd.in/gFZFTAiM ✍ Guidance: https://lnkd.in/gJKyG23D Why is this important ❓ Because the #riskbasedapproach requires we iterate and on an ongoing basis assess, and identify, the risks our business faces, and put in place controls and mitigants that help manage those risks. A few things to note: 🍎 The guidance will become effective immediately 🍎 This is the first guidance given on the process for #delisting a coin while aligning with consumer protection practices 🍎 Registered firms in the State are asked to submit their new coin-listing/delisting policies and seek regulatory approval 🍎 The policy should cover 3 areas: #governance for the coin-listing process; #riskassessment of coins; and #procedures to #monitor coins  🍎 Make it specific to your business model and customer base - tailor your policy! 🍎 Self-certification process post initial regulatory approval Not all coins share the same characteristics and if we recall Financial Action Task Force (FATF) guidance for virtual currencies, two key considerations should include: ✅ assessing a coin for privacy-enhancing features ✅ understand non-face-to-face customer relationships and the coins of choice by customers Recall the NYDFS #VOLTinitiative: ➡ Vision: Continue as the preeminent regulator of virtual currency ➡ Operations: Achieve operational excellence through new processes and process management; greater communications and transparency; and commitment to constant improvement to keep pace with the market we regulate. It is critical that we make these improvements without sacrificing regulatory rigor ➡ Leadership: Continue to lead through greater engagement, new policy, and a robust hiring initiative to ensure we have the expertise to be a forward-looking regulator ➡ Technology: Leverage technology to streamline communications, increase transparency, and create enhanced supervision. 🙏 🙏 Thank you Adrienne A. Harris and the NYDFS Virtual Currency Team for safeguarding, clarifying, and innovating!

"MiCAR is the first European-level legislation introducing a harmonised and comprehensive framework for crypto-assets, covering issues from the offering to the public of crypto-assets to preventing market abuse in crypto-asset markets. The legislation provides a set of prescriptive rules that will shape the functioning of the European markets in crypto-assets, including transparency rules, authorisation requirements, customer protection rules and an anti-market abuse framework.   As a Regulation MiCAR has direct effect, however, there are a number of provisions in the Regulation to which full harmonisation does not apply and Member States are given discretion as to whether and how to apply these provisions. The four national discretions this consultation seeks feedback on include:   • Article 88 (1): Public disclosure of inside information   • Article 111 (2): Administrative penalties and other administrative measures   • Article 143 (2): MiCAR transition period; and   • Article 143 (6): Simplified authorisation procedure"   — From: Department of Finance, Government of Ireland, Markets in Crypto Assets Regulation (EU 2023/1114) Public Consultation on August 9, 2023 https://lnkd.in/eK3ZZJKg

For those in my network who may not be as deep into global crypto reg change, here’s a quick summary explaining MiCA and why it is so impactful. The highly anticipated MiCA (Markets in Crypto-Assets) regulation is officially here. This transformative framework will bring much-needed clarity and standardization to the EU's crypto markets, and ensure enhanced consumer protection, transparency, and a secure environment for businesses and investors alike - AKA, a huge catalyst for legit, good-acting operators and therefore the overall maturity of the space. Here are some of the major changes- ▪️With MiCA, Crypto-asset service providers (CASPs) can operate across the EU with one license, and are now obligated to implement anti-money laundering (AML) policies and procedures, as well as practices to prevent market abuse. ▪️MiCA also makes significant changes to stablecoin requirements and regs: stablecoin providers are now required to obtain authorization before offering tokens within the EU, algorithmic stables are now banned, while USDC and EURC are permitted - USDT still has not been approved and some large exchanges already delisted it for EU customers. ▪️Under MiCA, the definition of who qualifies as a CASP has significantly expanded  compared to previous regulations. The scope will now cover a wider range of crypto-related financial activities and brings many crypto businesses  under regulation  who were previously operating outside traditional financial regulations. This, in my view, is the most interesting and drastic impact of MiCA. Even though MiCA overall represents a major milestone for the crypto industry, it may cause some operators to abandon their EU activity or end certain operations. I’ll cover the negative viewpoints against MiCA in a future post.

The first week of the new Administration has brought significant changes to US policy approaches towards digital asset and crypto financial markets. Policy formation, or lack thereof, has been a key impediment in the adoption of crypto financial capabilities. While execution of new policy agendas are still pending, the speed and scale of the shift in policy direction is significant. S&P remains dedicated to offering essential data, analytics, and benchmarks to enhance decision-making in markets. Key policy highlights from the week include: - The SEC rescinded SAB 121, eliminating the requirement for firms holding cryptocurrencies to list their customers' crypto holdings as liabilities on their balance sheets. - An Executive Order is establishing a Digital Asset Working Group tasked with proposing Federal regulatory frameworks within 6 months. The group will involve multiple regulators but will exclude the Federal Reserve and other banking regulators. - Commissioner Hester Peirce of the SEC is initiating a Crypto Task Force aimed at crafting a comprehensive regulatory framework for crypto assets. These developments mark a significant step in reshaping the regulatory landscape for digital assets and crypto markets. #PolicyChanges #DigitalAssets #CryptoRegulation #DeFi