Regulatory Policy

Operation Chokepoint 2.0 Concludes as Fed Withdraws Crypto Restrictions: A Long-Overdue Institutional Shift

The article discusses the end of "Operation Chokepoint 2.0," a coordinated U.S. regulatory effort to restrict banking services for the cryptocurrency industry in 2023. Internal FDIC documents confirmed this de-banking campaign, which increased regulatory friction and limited crypto firms' access to banking services following the collapse of several banks. A key tool was a Federal Reserve policy that classified crypto-related activities—such as stablecoin services, on-chain settlement, and crypto custody—as "high-risk innovation," subjecting them to additional scrutiny. Recently, the Federal Reserve officially revoked this restrictive policy, signaling a shift in regulatory approach. This change is not due to a sudden pro-crypto stance but reflects the growing recognition that isolating the industry is increasingly impractical. Stablecoin adoption has expanded, on-chain dollar settlements have become more frequent, and capital flows have continued outside the traditional banking system, creating potential systemic risks. The case of Custodia Bank, which was denied a master account and access to the dollar clearing system, exemplifies the impact of these policies. Custodia has since sought a rehearing, and its legal challenge is seen as a test of whether regulators are moving from a default rejection to a compliance-based准入 approach. Concurrently, the SEC issued guidance on how broker-dealers should custody crypto assets, detailing requirements for private key management, blockchain risk assessment, and response to extreme events like 51% attacks. Other agencies, like the OCC, have also expanded recognition of stablecoins and custody services. The overall trend indicates a regulatory pivot from blocking crypto to managing it structurally. Activities are being modularized into manageable components—settlement, custody, clearing, and risk control—rather than being treated as a monolithic high-risk category. The shift acknowledges that on-chain dollar flows are now a integral part of global finance, and regulators must engage with them rather than remain absent. The real impact will be seen in who is permitted to participate in the next phase of the dollar settlement and custody system.

marsbit12/19 11:30

US SEC Issues Key Crypto Custody Guidelines For Broker-Dealers

bitcoinist12/19 11:03

Can Pump.fun survive after PUMP falls 80% amid legal woes?

Pump.fun, a Solana-based memecoin creation platform, faces an expanded class-action lawsuit approved by a federal court. The suit alleges that the platform, along with Solana Labs, enabled insider trading advantages, leading to an estimated $4–$5.5 billion in losses for retail traders. Internal chats suggest coordination with Solana Labs for early token purchases, resulting in RICO allegations. Consequently, PUMP’s price plummeted 80% from its all-time high to $0.0018, with market cap dropping to $644 million. Both spot and futures markets saw significant outflows, and technical indicators like RSI and DMI suggest strong downward momentum, potentially leading to further declines unless buyer confidence is restored.

ambcrypto12/19 11:02

Bybit relaunches UK platform via Archax under FCA promotion rules

Bybit is returning to the UK market after a two-year absence, launching a new platform under the FCA’s financial promotion rules via a partnership with Archax, an FCA-authorized firm. The exchange will provide spot trading on 100 pairs and a peer-to-peer service, with a strong emphasis on AML and KYC compliance. Products are tailored for the UK, excluding derivatives and leveraged offerings, and include clear risk warnings about potential losses and the lack of investor protection schemes. The move comes amid declining crypto adoption in the UK, raising questions about whether Bybit’s re-entry represents responsible innovation or regulatory arbitrage. Key operational and consumer protection details remain undisclosed.

cointelegraph12/19 10:15

Shanghai Headquarters of the Central Bank Issues Another Warning: Digital Yuan Scam "Traps" Evolve, How Can the Public Strengthen Their Defenses?

The People's Bank of China Shanghai Headquarters has issued a renewed warning about the rise of sophisticated scams exploiting the name of the digital yuan (e-CNY). Fraudsters are luring victims through social media and短视频 platforms with fake recruitment ads for "official digital yuan promotion agents," promising high returns like "exchange subsidies" and "commission rebates." These criminal operations use well-organized online groups, fake official documents, and fraudulent "training sessions" to convince targets to convert funds into digital yuan and deposit them into controlled wallets. The central bank emphasized that the digital yuan is a legal tender meant for payments, has no investment or speculative value, and warned the public to avoid high-return promises, referral schemes, unknown links, and unsolicited group invitations. The scams thrive on public misconceptions: confusing the state-backed digital currency with speculative cryptocurrencies, misunderstanding its official two-tier operating structure (PBOC → authorized banks), and misinterpreting technical features like programmability as investment opportunities. Authorities have responded with precise public guidance—the "Four Don’ts"—and enhanced inter-department coordination. Beyond combating fraud, the note highlights the digital yuan’s strategic role as a compliant foundation for future digital asset ecosystems, particularly in the tokenization of real-world assets (RWA), where it could enable efficient, transparent, and regulated transactions. Maintaining public trust is crucial for its long-term adoption and integration into the real economy.

marsbit12/19 09:29

Crypto’s second act: Tokenization and regulation pulling traditional finance into Web3

Sponsored content from OKX discusses the convergence of crypto and traditional finance, driven by tokenization and regulation. OKX positions itself as a global exchange and regulated infrastructure partner, using "dual-stack" custody to help institutions integrate with crypto. The article highlights a fundamental shift in trust from intermediaries to verifiable blockchain data. Key trends include the tokenization of real-world assets (RWAs) for improved liquidity and access. Clear regulations in jurisdictions like the UAE and Singapore are seen as enablers, providing certainty for institutional participation. The line between traditional finance and crypto is blurring, with a collaborative future combining the scale of traditional finance with the innovation and speed of crypto.

cointelegraph12/19 09:10

Coinbase borrows Kalshi’s playbook, sues three states over prediction markets

Coinbase has filed lawsuits against regulators in Connecticut, Illinois, and Michigan, seeking federal court rulings that prediction markets operated under CFTC oversight fall under the Commodity Exchange Act and are not subject to individual state gambling laws. The exchange argues that allowing states to independently classify these markets as illegal gambling would undermine federal regulatory authority and create inconsistent national standards. Coinbase’s chief legal officer, Paul Grewal, emphasized that prediction markets function as neutral trading platforms—unlike traditional sportsbooks—and should be treated as regulated financial instruments. The legal move mirrors strategies used by prediction market operator Kalshi, which has faced mixed outcomes in similar state-level challenges. The cases may ultimately determine whether prediction markets are considered CFTC-regulated derivatives or gambling products subject to state prohibitions.

cointelegraph12/19 08:05

The Catfish Effect? Stablecoins Are Truly the Enemy of Bank Deposits

The article challenges the prevailing narrative that stablecoins pose an existential threat to the traditional banking system by causing massive deposit outflows. Instead, it argues that stablecoins act as a competitive catalyst, forcing banks to improve efficiency and offer higher deposit rates, rather than replacing them. Key points include: - Research indicates no significant correlation between stablecoin growth and bank deposit outflows, highlighting the "sticky" nature of deposits due to the convenience of bundled banking services (e.g., mortgages, payroll). - Stablecoins introduce competition, compelling banks to enhance operational efficiency and customer benefits, ultimately expanding financial intermediation and consumer welfare. - Regulatory frameworks like the GENIUS法案 (likely referring to U.S. stablecoin legislation) mitigate risks by mandating full reserves (cash, short-term Treasuries) and enforceable redemption rights, addressing concerns about run and liquidity risks. - Stablecoins offer efficiency gains through atomic settlements, enabling instant, cross-border transactions without intermediary delays, which could modernize outdated financial infrastructure. - The U.S. is urged to lead in stablecoin innovation to preserve the dollar’s global dominance, transforming stablecoins from offshore novelties into transparent, regulated components of domestic financial systems. The conclusion emphasizes that banks should view stablecoins as an opportunity to evolve, similar to other industries disrupted by technology, rather than as a threat.

marsbit12/19 07:49

Central Banks and Bitcoin: Inside the Czech National Bank's Groundbreaking Custody Experiment

The Czech National Bank (CNB) has launched a pilot project to test the direct custody of Bitcoin, marking a significant shift from the typical skepticism of central banks toward cryptocurrency. The initiative involves a $1 million operational sandbox that includes Bitcoin, a dollar stablecoin, and tokenized bank deposits. According to Trezor analyst Lucien, the project is not about immediate adoption into national reserves but about building internal capabilities in areas like key management, compliance, accounting, and on-chain auditing. Lucien highlights Bitcoin’s role as a bearer asset—similar to gold—but with operational advantages such as greater transparency, faster settlement, and lower custody costs. He also emphasizes the unique position of the Czech Republic, which already has a mature Bitcoin ecosystem, including widespread public adoption, favorable tax policies, and a history of Bitcoin innovation. The project reflects a pragmatic, learning-by-doing approach to regulation and central banking, contrasting with the theoretical debates common in other jurisdictions. While the pilot remains small-scale, it represents a strategic move to explore Bitcoin’s potential as a non-sovereign reserve asset that offers diversification without counterparty risk. The experiment may serve as a model for other central banks considering similar steps in an evolving global monetary landscape.

marsbit12/19 07:48

The New York Times: Trump Is Pushing Cryptocurrency Toward a Capital Frenzy

Former President Donald Trump's pro-crypto policies have triggered a speculative boom in cryptocurrency markets, according to a New York Times analysis. Dubbed the "crypto treasury company summer," this surge saw over 250 public companies—many newly formed or pivoting from other sectors—borrow heavily to accumulate cryptocurrencies like Bitcoin and meme coins. Trump’s administration eased regulations, ended enforcement crackdowns, and promoted crypto adoption, with Trump himself launching a TRUMP meme coin. However, the market experienced a sharp crash in October, erasing billions in value and exposing high risks from leveraged trading. Companies linked to Trump’s family, including World Liberty Financial (associated with Eric Trump), faced severe downturns, with one firm’s stock dropping 85%. New products like tokenized stocks—digital versions of real-world assets—are also emerging, raising concerns among regulators about systemic financial risks. Critics, including former Treasury officials, warn that the blurring line between investing and gambling could threaten broader financial stability. Despite this, crypto advocates argue such innovations democratize high-risk, high-reward opportunities. The SEC is monitoring the situation but has also shown support for certain crypto initiatives under the new regulatory approach.

marsbit12/19 05:04