Launchy Regulatory Roundup #17 - US Crypto Czar, SEC Chair, and CFTC Chair Nominees

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Welcome to our 17th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

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This week shows just how much politics can shake up the crypto world. Trump’s pro-crypto picks hint at big shifts in US policy, while South Korea’s Bitcoin crash during martial law exposes the risks of tightly controlled markets.

In Today's Edition:

• Headline: US Crypto Czar, SEC Chair, and CFTC Chair Nominees 🇺🇲 

• Global Legal Roundup: 🇬🇧 Pump.fun Ban, 🇦🇺 Crypto Crackdown & more.

• Case Study: How South Korea’s Martial Law Triggers Bitcoin Crash 🇰🇷 

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HEADLINE

US Crypto Czar, SEC Chair, and CFTC Chair Nominees

State of play: President-elect Donald Trump has announced key appointments highlighting his commitment to advancing crypto and AI policies. David Sacks has been named the "White House AI & Crypto Czar."

• Sacks will focus on providing regulatory clarity for the crypto industry, promoting the US leadership in blockchain, and protecting online speech.

• Sacks is the former COO of PayPal.

• He is a known Solana supporter and investor in Multicoin Capital.

In other appointments, Trump nominated pro-crypto Paul Atkins to replace Gary Gensler as SEC Chair.

• Atkins, a former SEC Commissioner, is expected to bring regulatory transparency and reduce enforcement actions against crypto firms.

Trump’s team also considers Perianne Boring, founder of the Chamber of Digital Commerce, and Caroline Pham, a Republican CFTC Commissioner, to lead the CFTC.

• Both are advocates for regulatory clarity and innovation in digital asset markets.

What’s Next: The US could see a major shift in blockchain regulation. Expect policies promoting clarity, crypto adoption, and innovation, potentially driving market growth and investment in the coming months.

Why it Matters: Trump’s choices reflect his determination to follow through on his promise to make the US a leader in crypto. His stance has already attracted strong support and investment from the industry.

Our Take: Pro-crypto policies could drive growth, but their success hinges on balancing innovation with regulatory stability.

GLOBAL LEGAL ROUNDUP

North & South America:

• 🇺🇲 FDIC asked banks to ‘pause’ crypto activities.

• 🇺🇲 Crypto industry execs approve of Trump’s pick to lead SEC.

• 🇺🇲 Missouri bill would ban CBDCs, make gold and silver legal tender.

• 🇺🇲 Coinbase will drop law firms who hire anti-crypto former SEC staff.

• 🇺🇲 FSOC warns stablecoins remain a 'potential risk' to financial stability.

• 🇺🇲 SEC defends amended suit against Binance, CZ over securities claims.

• 🇺🇲 CFTC bags record $17B in 2024 thanks to massive crypto enforcement.

• 🇧🇷 Brazil proposes to ban stablecoin withdrawals to self-custodial wallets.

• 🇨🇦 Circle says USDC is the first stablecoin to meet Canada’s new listing rules.

Europe:

• 🇬🇧 FCA issues warning, bans PumpFun in the UK.

• 🇫🇷 Pavel Durov questioned in Paris court for the first time.

• 🇷🇺 Putin says no one will be able to ban crypto.

• 🇷🇺 Russia sentences Hydra market founder to life in prison.

• 🇩🇪 German fintech 21X gets EU license for tokenization platform.

• 🇨🇿 Czech gov’t moves to exempt crypto held for 3+ years from being taxed.

APAC:

• 🇮🇳 Indian Government says Binance & WazirX are evading taxes.

• 🇰🇷 South Korea’s Democratic Party agrees to delay crypto tax by 2 years.

• 🇰🇷 South Korea’s FSC denies decision on corporate crypto account roadmap.

• 🇦🇺 Australia to crack down on crypto ATM providers.

• 🇦🇺 Crypto compliance ‘no longer optional’ under Australia’s new draft guidelines.

CASE STUDY

How South Korea’s Martial Law Triggers BTC Crash

State of play: South Korea faced a sharp Bitcoin price crash on Dec. 3, dropping prices to $65,000 on the Upbit exchange following President Yoon Suk Yeol’s martial law declaration.

• The announcement, citing threats from North Korea, triggered a liquidity crisis as key market participants exited, leading to significant price volatility.

• Analyst Ltrd linked the crash to South Korea’s restrictive crypto market, which limits participation, reduces liquidity, and exacerbates the sell-off.

• The lack of liquidity caused imbalances between buy and sell orders, with spreads widening to 10%.

• Bitcoin prices fell sharply, significantly below global rates.

• Ltrd noted broader market maker participation could have mitigated the volatility.

• After South Korea’s parliament voted to nullify the martial law order, Bitcoin prices rebounded to $95,000.

• The incident highlighted the vulnerabilities of South Korea's tightly controlled crypto market to liquidity shocks during political instability.

Our Take: The Bitcoin crash in South Korea shows how political turmoil and limited market access can cause extreme volatility. Expanding participation and improving liquidity could prevent similar issues.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Umi’s read on how token classification works.

• Paul Grewal’s read on crypto debanking pause letters.

• Jake Chervinsky’s read on non-custodial smart contract protocols.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.