Regulatory Policy

Focuses on global regulatory developments, policy changes, and compliance requirements. It provides in-depth analysis of government regulations and their impact on the cryptocurrency and blockchain industries, helping businesses and investors proactively manage policy-related risks.

From Cash to Crypto: Towards a Consistent Regulatory Approach to Illicit Payments

"From Cash to Crypto: Towards a Consistent Regulatory Approach to Illicit Payments" by Andrea Minto et al. (BIS) examines the challenges for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) regulation posed by the diversification of payment instruments, from cash and bank deposits to cryptoassets and CBDCs. The paper introduces a conceptual framework centered on the degree of intermediary involvement in a payment tool. It identifies a "waterbed effect": as regulators tighten AML/CFT rules on one type of instrument (e.g., bank transfers), illicit activity may shift to less-regulated alternatives with lower detection probabilities (e.g., self-hosted crypto wallets). This regulatory arbitrage undermines overall effectiveness. The framework categorizes payment tools as either intermediary-dependent (e.g., bank deposits, e-money, custodial wallets) where regulated entities perform checks, or non-intermediated (e.g., cash, self-hosted wallets, offline CBDCs) which offer higher anonymity and pose greater detection challenges. Malicious actors are assumed to choose tools that minimize their risk of detection. A case study of the EU's evolving AML/CFT regime illustrates this dynamic, showing how regulation has expanded over time to cover new entities like Crypto-Asset Service Providers (CASPs). However, inconsistencies remain, such as transaction limits for cash but not yet for self-hosted wallets or offline digital euro transactions. The paper concludes by proposing a dual regulatory approach: a *lex generalis* establishing a unified baseline of core obligations for all intermediated tools, and a *lex specialis* with tailored rules for non-intermediated instruments (e.g., transaction limits for cash and offline CBDCs, enhanced "touch point" monitoring for self-hosted wallets). This aims to create a more effective, consistent, and forward-looking framework that balances financial integrity with considerations for user privacy and innovation.

marsbit03/29 12:18

From Cash to Crypto: Towards a Consistent Regulatory Approach to Illicit Payments

marsbit03/29 12:18

Senator Defends CLARITY Act As Developer Protection Debate Heats Up

A crypto developer's case is driving a key regulatory debate in Washington. Roman Storm, co-founder of Tornado Cash, was convicted in 2025 for operating an unlicensed money-transmitting business, causing concern among developers. This has fueled a public dispute between Senator Cynthia Lummis and crypto attorney Jake Chervinsky over the CLARITY Act. Chervinsky argues that Title 3 of the bill contains broad language that could classify non-custodial software developers as money transmitters, subjecting them to KYC obligations and undermining intended protections. Lummis defends recent bipartisan revisions, calling the act the "strongest protection for DeFi and developers ever enacted." However, the latest text remains unpublished, leaving the industry awaiting concrete details amid high stakes for developer liability. The bill is gaining momentum and is expected to undergo a Senate committee markup in April.

bitcoinist03/29 12:02

Senator Defends CLARITY Act As Developer Protection Debate Heats Up

bitcoinist03/29 12:02

"Crypto Czar" Steps Down: 130-Day Political Performance Concludes, How Much of Trump's Crypto Promises Remain?

David Sacks, known as the "Crypto Czar," has stepped down after reaching the 130-day limit of his special government appointment. Initially appointed by former President Trump to lead AI and crypto policy, Sacks was tasked with creating a clear legal framework for the cryptocurrency industry. During his tenure, he achieved several high-profile actions, including banning a central bank digital currency (CBDC), hosting the first White House Crypto Summit, establishing a strategic Bitcoin reserve, and helping pass the GENIUS Act for stablecoin regulation. However, the article argues that these accomplishments were largely symbolic political performances rather than substantive gains for the crypto industry. The White House Crypto Summit was described as a publicity event with no concrete policies announced. The strategic Bitcoin reserve merely repurposed seized assets without new purchases, failing to inject liquidity or provide strong market backing. While the GENIUS Act was a tangible achievement, its counterpart, the CLARITY Act, remains stalled in Congress due to conflicts between banks and crypto firms over stablecoin interest benefits—with recent drafts favoring traditional banks, contrary to initial pro-crypto promises. Sacks will continue as co-chair of the Presidential Technology Advisory Council, focusing on AI policy, with no mention of crypto. The article concludes that Trump’s pro-crypto promises have largely resulted in political theater rather than meaningful regulatory progress.

marsbit03/29 06:26

"Crypto Czar" Steps Down: 130-Day Political Performance Concludes, How Much of Trump's Crypto Promises Remain?

marsbit03/29 06:26

Decentralization at risk as 100 wallets hold 80% of DeFi supply: Report

DeFi's decentralization is under threat as new data reveals extreme concentration of governance power. A report from the ECB shows the top 100 wallets control over 80% of the token supply across major protocols, while just 10-20 voters hold up to 96% of delegated voting power in some cases. With participation rates as low as 4-12%, decision-making is effectively controlled by a small group of entities, including founders, treasuries, and centralized exchanges. This makes regulators' jobs easier, as they can now identify clear control points, increasing DeFi's regulatory exposure under frameworks like MiCA. Consequently, markets are repricing DAO tokens, with a growing premium placed on protocols that demonstrate broader participation and transparency, while those with concentrated control face valuation pressures.

ambcrypto03/29 01:02

Decentralization at risk as 100 wallets hold 80% of DeFi supply: Report

ambcrypto03/29 01:02

Watchdog Slaps Binance Australia With A$10 Million Fine Over Onboarding Failures

Australia's financial regulator, ASIC, has fined Binance's derivatives arm A$10 million ($6.8 million) for serious compliance failures. The Federal Court found that Binance misclassified over 85% of its Australian clients as wholesale investors, allowing 524 retail customers to access high-risk crypto derivatives without required consumer protections. This led to over A$12 million in client losses and fees. Binance admitted to providing no product disclosure statements, lacking dispute resolution systems, and failing to properly train staff. The exchange also allowed clients to retake investor tests until they passed. ASIC emphasized this case serves as a warning to global financial firms operating in Australia to comply with local laws.

bitcoinist03/28 11:33

Watchdog Slaps Binance Australia With A$10 Million Fine Over Onboarding Failures

bitcoinist03/28 11:33

‘Block and find out’ – White House warns Coinbase on CLARITY Act fallout

The White House issued a veiled warning to Coinbase over its opposition to the CLARITY Act, suggesting a future Democratic administration could impose harsher regulations on stablecoin yields, DeFi, and crypto overall. This marks a shift from earlier statements downplaying the exchange's stance. Coinbase confirmed it is working on a counterproposal to preserve stablecoin rewards, drawing both support and criticism. Broader industry concerns include weakened DeFi developer protections and the exclusion of Bitcoin from tax exemptions, which only apply to stablecoins. Despite the standoff, Coinbase anticipates the bill could be resolved and passed by early May.

ambcrypto03/28 09:30

‘Block and find out’ – White House warns Coinbase on CLARITY Act fallout

ambcrypto03/28 09:30

Top House Democrat Questions Kansas City Fed’s Approval Of Kraken Master Account

Representative Maxine Waters, the top Democrat on the House Financial Services Committee, has questioned the Federal Reserve Bank of Kansas City's approval of a "limited purpose account" for crypto exchange Kraken. This approval grants Kraken's banking arm direct access to the Fed's payment system, a first for a cryptocurrency firm. Waters expressed concerns about the lack of transparency, potential risks to financial stability, and the adequacy of consumer protections, especially as this access was granted while Congress is still debating the terms for such expansions. She has requested detailed information on the services accessible to Kraken, the conditions applied, and the risk assessments conducted. The move has also drawn opposition from traditional banking groups, who warn it could threaten the U.S. payment system.

bitcoinist03/28 09:01

Top House Democrat Questions Kansas City Fed’s Approval Of Kraken Master Account

bitcoinist03/28 09:01

Is South Korea set to get its own KRW-pegged stablecoin soon?

South Korea is moving closer to potentially launching its own KRW-pegged stablecoin, driven by its large and active retail crypto market. With over 18 million citizens already participating in crypto trading, the market is fast-moving and retail-focused, at times rivalling traditional equity markets. However, inefficiencies like the "Kimchi Premium"—where crypto assets trade at higher prices on local exchanges—highlight strong local demand and limited capital flow flexibility. A KRW-backed stablecoin could reduce reliance on USD-based stablecoins, improve liquidity in KRW trading pairs, enable faster settlement, and leverage existing market support from large players on Korean exchanges. Despite the potential benefits, regulatory hurdles remain a significant challenge.

ambcrypto03/28 05:06

Is South Korea set to get its own KRW-pegged stablecoin soon?

ambcrypto03/28 05:06

Assessing community sentiment after David Sacks’s 130-day term as crypto czar ends

David Sacks has concluded his 130-day term as AI and crypto czar for former President Donald Trump. His performance has received mixed reviews from the crypto community. A key achievement was helping pass the GENIUS Act, a stablecoin legislation bill. However, broader goals, such as establishing a U.S. strategic Bitcoin reserve (SBR), remain unfulfilled, drawing criticism from some community members who view this as a failure. Sacks is transitioning to a new role as co-chair of the President’s Council of Advisers on Science and Technology (PCAST), where he will advise on a wider range of tech issues. Despite his departure, advocacy for crypto policy continues within the administration.

ambcrypto03/28 03:33

Assessing community sentiment after David Sacks’s 130-day term as crypto czar ends

ambcrypto03/28 03:33

Hyperliquid Policy Center’s Concerns Over CLARITY Act– Urges Fixes To Protect DeFi Developers

The Hyperliquid Policy Center (HPC), led by CEO Jake Chervinsky, has raised significant concerns regarding the CLARITY Act as it approaches a potential Senate Banking Committee markup. While a key debate has centered on a provision that would bar platforms from offering yield on stablecoins, Chervinsky argues the most critical issue is protecting non-custodial DeFi software developers from being misclassified as money transmitters and subjected to KYC obligations. He points to the Blockchain Regulatory Certainty Act (BRCA) within the draft, which provides such protections, but warns that conflicting language in Title 3 of the CLARITY Act could still impose these duties on developers, which he calls "non-negotiable for DeFi." Senator Cynthia Lummis responded, assuring that bipartisan negotiators are working on amendments to Title 3 to strengthen protections. The timeline for the Senate Banking Committee's markup remains uncertain.

bitcoinist03/28 03:02

Hyperliquid Policy Center’s Concerns Over CLARITY Act– Urges Fixes To Protect DeFi Developers

bitcoinist03/28 03:02

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