Launchy Regulatory Roundup #67 - US House Unveils Bipartisan Crypto Tax Framework

Coinbase Sues US States Over Prediction Market Authority

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Welcome to our 67th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

  • Headline: US House Unveils Bipartisan Crypto Tax Framework 👀 

  • Global Legal Roundup

  • Case Study: Coinbase Sues US States Over Prediction Market Authority 🔎 

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HEADLINE

US House Unveils Bipartisan Crypto Tax Framework

State of play: Bipartisan US House lawmakers Max Miller and Steven Horsford have released a draft crypto tax bill known as the Digital Asset PARITY Act. The proposal seeks to ease everyday tax burdens while tightening rules around trading and reporting.

  • The framework includes a capital gains exemption for regulated, dollar pegged stablecoin transactions under $200.

  • This safe harbor is meant to simplify small payments but applies only to qualifying stablecoins issued under the GENIUS Act, not to other cryptos.

  • Lawmakers are still weighing whether to add an annual cap to limit misuse.

For staking and mining, the bill offers a middle ground. Taxpayers could choose to defer taxes on rewards for up to five years, after which they would be taxed as ordinary income at fair market value.

  • This approach sits between current IRS rules that tax rewards on receipt and industry demands for taxation only upon sale.

The draft also applies traditional securities tax rules to digital assets, including wash sale limits and optional mark to market accounting for professional traders. It clarifies treatment for crypto lending, charitable donations, and fund level staking.

  • The stablecoin exemption would take effect in the 2026 tax year, with lawmakers aiming to move the broader bill forward before August 2026.

What’s Next: The bill heads to committee review, where details like a possible cap on the stablecoin exemption may change. Lawmakers want to move it forward before August 2026.

Why it Matters: It lowers friction for everyday stablecoin use and brings clearer rules for staking, trading, and lending. Just as important, it shows real bipartisan progress on crypto taxes.

Our Take: The stablecoin carve out helps real usage, and the staking deferral eases pressure without going too far. It is not perfect, but it brings much needed clarity.

GLOBAL LEGAL ROUNDUP

America:

  • 🇺🇲 FDIC proposes stablecoin application framework rule.

  • 🇺🇲 David Sacks says Clarity Act markup confirmed for January.

  • 🇺🇲 US senators introduce bipartisan bill to combat crypto fraud.

  • 🇺🇲 SEC seeks bans for former Alameda CEO and former FTX execs.

  • 🇺🇲 SEC charges VBit CEO involving $48.5M bogus investment deals.

  • 🇺🇲 Trump to interview pro-crypto Christopher Waller for next Fed Chair.

  • 🇺🇲 Coinbase says Big Beautiful Bill could push gamblers to prediction markets.

  • 🇺🇲 Federal Reserve withdraws policy severely limiting 'novel' crypto activities.

  • 🇺🇲 Broker-dealers need to maintain private keys to comply with customer protection rules.

Europe:

  • 🇬🇧 UK aims to regulate crypto like financial products by 2027.

  • 🇵🇱 Polish parliament approves revived crypto bill, heads to Senate.

  • 🇪🇸 Spain’s regulator sets out MiCA transition rules for crypto platforms.

  • 🇪🇺 ECB eyes onchain settlements next year as lawmakers weigh digital euro privacy.

APAC:

  • 🇰🇷 South Korean regulator misses stablecoin bill deadline.

CASE STUDY

Coinbase Sues US States Over Prediction Market Authority

State of play: Coinbase has filed lawsuits against Michigan, Illinois, and Connecticut over who has authority to regulate prediction markets. Coinbase is seeking rulings that place prediction markets under the exclusive jurisdiction of the CFTC.

  • Coinbase argues that Congress has already designated the CFTC as the sole regulator for these markets and that state attempts to intervene are unlawful and harmful to innovation.

  • Chief Legal Officer Paul Grewal said prediction markets are fundamentally different from sportsbooks, describing them as neutral exchanges rather than gambling products.

  • The lawsuits come shortly after Coinbase announced it will enter prediction markets through a partnership with Kalshi, with event contract trading expected to launch nationwide in January 2026.

Our Take: A win would cement CFTC authority and allow the sector to scale nationally. A loss risks fragmented state rules that could slow growth.

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

  • Caleb Shack’s read on Trench Tech.

  • Nic Carter’s read on Bitcoin devs and collapse.

  • Katie Biber’s read on The Gensler SEC Era Rules.

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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.