Weekly Crypto Regulation Information Roundup: GENIUS Act Hits Large Tech, SEC Reverses on ETF

This week, the crypto regulatory panorama was thrown into sharp aid as U.S. lawmakers and businesses issued new frameworks, reversed approvals, and closed long-running investigations.

A transparent message emerged: the U.S. is transferring shortly to form the subsequent part of digital asset oversight, with each Congress and federal businesses enjoying pivotal roles.

GENIUS Act Attracts Line Towards Large Tech in Stablecoins

Probably the most notable updates comes from the not too long ago enacted GENIUS Act, which features a provision aimed squarely at stopping Large Tech and Wall Road from dominating the stablecoin sector.

Generally known as the “Libra clause,” the rule references Meta’s failed world forex venture and displays regulators’ dedication to keep away from comparable energy consolidation in future digital cash methods.

Underneath this clause, any non-bank agency aiming to challenge a dollar-backed stablecoin should set up a separate, standalone authorized entity to deal with the operation. That entity can be required to bear antitrust scrutiny and safe clearance from a Treasury-led oversight committee, which holds veto energy.

Banks are additionally topic to restrictions. They have to challenge stablecoins by way of legally distinct subsidiaries which might be prohibited from partaking in leverage, lending, or any exercise that might pose broader monetary dangers.

This creates a extremely managed setting, with boundaries that Circle’s Chief Technique Officer Dante Disparte described as extra conservative than deposit-token fashions being explored by massive monetary establishments like JPMorgan.

The measure reveals an aggressive push by U.S. regulators to make sure the stablecoin area doesn’t replicate previous problems with too-big-to-fail establishments dominating monetary infrastructure. It additionally units the stage for a broader reimagining of how the U.S. will deal with fiat-backed digital belongings within the years to come back.

Senate Introduces Market Construction Framework for Crypto

Constructing on the momentum of the GENIUS Act, the Senate Banking Committee unveiled a brand new draft invoice designed to restructure how digital belongings are categorized and controlled.

Titled the Accountable Monetary Innovation Act of 2025, the invoice is co-sponsored by Senators Tim Scott, Cynthia Lummis, Invoice Hagerty, and Bernie Moreno.

This new laws makes an attempt to deal with long-standing confusion within the crypto sector by offering a clearer framework for when tokens must be handled as commodities versus securities.

It attracts from prior legislative makes an attempt such because the bipartisan Lummis-Gillibrand proposal and incorporates parts of the Home-passed CLARITY Act.

By creating constant regulatory definitions and assigning clearer jurisdictional tasks to the SEC and the CFTC, the invoice hopes to offer digital asset firms with the knowledge they’ve lengthy requested for.

It additionally represents rising bipartisan consciousness that crypto markets want regulation — however not at the price of innovation. If handed, the invoice may basically change how digital belongings are launched, traded, and reported within the U.S. market.

DOJ Drops Case Towards Jesse Powell

In one other headline-grabbing twist, the U.S. Division of Justice has reportedly closed its investigation into Kraken founder Jesse Powell, ending a authorized saga that started with a raid on his house in 2023.

The probe originated from a administration dispute tied to the Verge Heart for the Arts, a nonprofit Powell helped co-found. Allegations included cyberstalking and unauthorized entry to delicate data. Whereas Powell has strongly denied the accusations, federal brokers had seized a number of units from his house in the course of the investigation.

Based on latest experiences, the DOJ has since returned the seized tools and dropped all costs, implicitly affirming Powell’s model of occasions. The Kraken founder had filed a civil lawsuit towards members of the nonprofit’s board, citing reputational injury and false claims.

The case’s closure removes a significant authorized cloud from one of many trade’s extra high-profile figures and marks a uncommon instance of federal prosecutors strolling again a high-profile crypto-related investigation.

SEC’s Sudden Reversal on Bitwise ETF Stuns Markets

In a transfer that rattled investor confidence, the Securities and Trade Fee (SEC) granted — after which rescinded — approval for Bitwise’s 10 Crypto Index ETF inside a matter of hours.

The ETF was designed to trace a diversified basket of cryptocurrencies together with Bitcoin, Ethereum, Solana, XRP, and others, with 85% of its weighting in already-approved belongings.

NYSE Arca had obtained accelerated approval to amend its guidelines for itemizing the multi-asset fund. However that call was shortly stayed by the SEC’s Assistant Secretary Sherry Haywood below Rule 431. The Fee stated it might conduct additional overview of the motion taken by its Division of Buying and selling and Markets.

The reversal is very notable as a result of it got here regardless of the SEC initially discovering the fund in line with investor safety and anti-fraud requirements below the Trade Act.

This abrupt about-face comes as greater than 70 crypto-related ETF purposes — from main corporations like Grayscale, VanEck, and Franklin Templeton — await choices. It additionally raises issues over how inside divisions on the SEC could also be affecting the consistency and readability of crypto asset approvals.

This week’s developments present that the regulatory setting for crypto within the U.S. is quickly evolving — and nonetheless unstable in key methods.

Whereas Congress is starting to supply construction by way of payments just like the GENIUS Act and the Accountable Monetary Innovation Act, federal businesses are nonetheless sending combined indicators.

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