Launchy Regulatory Roundup #32 - SEC Declares Certain Stablecoins Are Not Securities

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The crypto regulatory chessboard is shifting again. The SEC just handed fiat-backed stablecoins a regulatory hall pass, while Congress juggles two competing bills (and a Trump-branded stablecoin plot twist). As power players push their coins and agendas, the real question isn’t who’s winning, it’s whether the game is still fair.

In Today's Edition:

• Headline: SEC Declares Certain Stablecoins Are Not Securities 🙅 

• Global Legal Roundup: Trump’s WLFI Under Scrutiny 🔎 

• Case Study: Crypto Regulatory Capture Risks ⚠️ 

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HEADLINE

SEC Declares Certain Stablecoins Are Not Securities, Congress Advances Key Bills

State of play: In a major regulatory shift, the US SEC announced that "covered stablecoins"—those backed 1:1 by physical fiat or highly liquid, low-risk assets—will not be classified as securities and are exempt from transaction reporting.

• These tokens must be fully redeemable in US dollars, with reserves held separately from company operations and barred from investment or speculation.

• Algorithmic stablecoins and yield-bearing fiat tokens are not included, leaving their legal status uncertain.

• The move aligns with two landmark bills moving through Congress:

  • The STABLE Act, passed by the House Financial Services Committee (32-17), establishes strict transparency rules for stablecoin issuers.

  • The GENIUS Act, cleared by the Senate Banking Committee (18-6), outlines oversight and reserve requirements to bolster the U.S. dollar’s dominance via regulated stablecoins.

• Lawmakers are now working behind the scenes to harmonize the two bills to avoid a lengthy reconciliation process, aiming for a unified regulatory framework.

Political tensions rose after Rep. Maxine Waters criticized the Trump family's involvement in launching World Liberty Financial USD (USD1).

• She accused former President Trump of trying to profit from stablecoin legislation, suggesting he could push for USD1 to replace government payment rails like Social Security and HUD.

What’s Next: Congress is expected to debate and vote on the STABLE and GENIUS Acts in the coming weeks. Lawmakers are working to align both bills to streamline passage and avoid a conference committee.

Why it Matters: This is a pivotal moment for the future of digital dollars. By exempting fiat-backed stablecoins from securities laws, the SEC is opening the door for wider adoption and regulatory clarity.

Our Take: The SEC’s guidance and legislative momentum signal that the US is embracing fiat-backed stablecoins—while drawing a red line against interest-bearing or algorithmic alternatives—as part of its broader digital asset strategy.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 US lawmakers advance anti-CBDC bill.

• 🇺🇲 Trump’s pick for SEC chair makes it out of committee.

• 🇺🇲 US court fines UAE crypto firm CLS Global $428K for wash trading.

• 🇺🇲 US sanctions 8 crypto wallets tied to Garantex and Yemeni Houthis.

• 🇺🇲 Uyeda directs staff to review statements on crypto risks, security laws.

• 🇺🇲 SEC and Gemini ask to pause lawsuit to explore ‘potential resolution’.

• 🇺🇲 Crypto PAC-backed Republicans win seats in Florida special elections.

• 🇺🇲 US lawmakers press SEC for info about Trump family-backed crypto firm.

• 🇺🇲 Alabama, Minnesota lawmakers join states pushing for Bitcoin reserves.

• 🇧🇷 Brazilian court authorizes crypto seizure for debt collection.

Europe:

• 🇬🇧 UK trade bodies ask government to make crypto a ‘strategic priority’.

• 🇪🇺 Binance ends Tether USDT trading in Europe to comply with MiCA rules.

• 🇲🇹 Malta regulator fines OKX crypto exchange $1.2M for past AML breaches.

APAC:

• 🇯🇵 Japan says no plans to classify crypto as financial products.

• 🇰🇷 South Korea may open up local crypto market to foreign investors.

• 🇹🇼 Taiwan mulls crypto act that experts say may squeeze out small players.

CASE STUDY

Crypto Regulatory Capture Risks Amid Growing Political Influence

Credits to Aaron Wood & Cointelegraph for the Original Article

State of play: Concerns over regulatory capture are rising in Washington as the crypto industry, including major players like Coinbase and the Trump-affiliated World Liberty Financial, exerts growing influence over US crypto legislation.

• Lawmakers and crypto observers warn that industry lobbying may prioritize corporate interests over the public good, limit competition, and only benefit a select few.

• A recent Senate letter flagged conflict of interest risks tied to Trump's USD1 stablecoin and the GENIUS Act, highlighting potential presidential interference in regulatory decisions.

• Coinbase’s willingness to delist Tether’s USDT if new laws pass raised concerns of market manipulation, with critics calling it a “blatant attempt at regulatory capture.”

• Meanwhile, executive actions like Trump’s Bitcoin reserve order reflect how deep crypto’s lobbying influence runs.

• Experts argue that both pro-crypto and anti-crypto stances, under Trump and Biden respectively, reveal different sides of regulatory capture—the only difference being who is doing the capturing.

Our Take: While some suggest creating watchdog bodies to oversee regulators, political resistance makes reform unlikely. Ultimately, whether crypto regulation serves the public interest or private agendas remains an open and pressing question.

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

• Alex Thorn’s thread on stablecoin legislation.

• Tonya Evans’s read on $HAWK meme coin and SEC pass. 

• Galaxy’s video on Tariffs, Recession Risks & a Cautious Consumer Outlook.

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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.