Launchy Regulatory Roundup #35 - Supervisory Walls Fall: Tokenized Securities Next

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Welcome to our 35th 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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The Federal Reserve is pulling down old barriers, the SEC is flirting with tokenized securities, and enforcement heat is cooling fast, especially for firms with the right political connections. Meanwhile, scams are scaling up faster than regulators or developers seem ready for.

In Today's Edition:

• Headline: Supervisory Walls Fall: Tokenized Securities Next 🧱 

• Global Legal Roundup: EU v Crypto (Again), Coinbase Eyes Banking 👀 

• Case Study: Americans Lost $9.3B to Crypto Scams in 2024 💸 

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HEADLINE

Supervisory Walls Fall: Tokenized Securities Next

State of play: On April 24, the Federal Reserve announced it is rescinding two key supervisory letters from 2022 and 2023 that had previously discouraged banks from engaging with cryptocurrencies and stablecoins.

• These letters required state-chartered member banks to notify regulators in advance before participating in crypto-related activities.

• Going forward, crypto activities by banks will simply be reviewed through the Fed’s normal supervisory process, removing an important barrier.

• The Fed also withdrew earlier warnings issued alongside the FDIC and OCC about banks dealing with crypto companies accused of misleading practices.

Meanwhile, the SEC’s crypto task force continues its outreach to the crypto industry. The task force held a meeting with Ondo Finance and Davis Polk and Wardwell, two firms with ties to Trump, to discuss issuing tokenized versions of US securities.

• Ondo notably donated $1M to Trump's inauguration fund, and Davis Polk is representing Trump’s Truth Social venture for launching crypto-linked ETFs.

• The SEC is also preparing a custody roundtable with major crypto firms like Kraken and WisdomTree.

• In addition, it has begun dropping enforcement actions against several high-profile crypto companies, including Ripple, Coinbase, and Kraken; all linked to Trump campaign support.

What’s Next: Expect banks to re-enter crypto markets more aggressively, while the SEC moves toward formal guidelines for tokenized securities.

Why it Matters: This marks a major regulatory shift, making it easier for traditional finance to integrate crypto, stablecoins, and tokenized assets.

Our Take: The door to mainstream crypto adoption is wide open, but risks around tokenized assets and market stability are likely to grow too.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 SEC delays decision on Polkadot ETF.

• 🇺🇲 Alabama drops staking lawsuit against Coinbase.

• 🇺🇲 Investors sue Meteora and VC firm, alleging fraud.

• 🇺🇲 Coinbase considering applying for US banking license.

• 🇺🇲 Nasdaq pushes SEC to classify some digital assets as stocks.

• 🇺🇲 Circle executive denies claims of seeking US banking license.

• 🇺🇲 SEC says it won’t re-file fraud case against Hex’s Richard Heart.

• 🇺🇲 New Hampshire Bitcoin reserve bill heads to full Senate vote.

• 🇺🇲 US Senator calls for Trump impeachment, cites memecoin dinner.

• 🇺🇲 SEC chair suggests 'huge benefits' in agency's third crypto roundtable.

Europe:

• 🇪🇺 ECB flags risk of financial contagion from US crypto push.

• 🇨🇭 Swiss National Bank chief dismisses Bitcoin reserve calls.

• 🇷🇺 Russian crypto exchange Mosca raided amid cash-to-crypto ban talks.

Middle East & Africa:

• 🇿🇦 Binance tightens South African compliance rules for crypto transfers.

APAC:

• 🇰🇷 South Korea's key right-wing party pushes for pro-crypto law.

• 🇦🇺 Australia’s top court sides with Block Earner, dismisses ASIC appeal.

CASE STUDY

Americans Lost $9.3B to Crypto Scams in 2024

State of play: The FBI’s Internet Crime Complaint Center reported that Americans lost $9.3B to crypto-related fraud in 2024, up 66% from 2023. Over 140,000 complaints were filed, with individuals over 60 suffering the largest losses, totaling $2.8B.

• Investment scams were the top cause of financial losses, while sextortion scams were the most common.

• Globally, illicit crypto activity in 2024 reached $41B.

• Despite efforts like "Operation Level Up," which saved $285M, experts warn crypto scams could worsen in 2025 as AI-driven fraud becomes more scalable.

Our Take: If regulators move slowly and developers stay passive, crypto scams will explode. Both sides must innovate faster than fraudsters.

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

• Greg Xethalis’s thread on the “Winklevoss Standard.”

• Katie Biber’s thread on why crypto devs rights are at risk.

• Alexander Grieve’s thread on MEV and baselayer market structure.

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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.