Lowenstein Crypto advises main
digital asset and cryptocurrency initiatives, exchanges, and buying and selling
companies. Our observe covers regulatory recommendation, transactions and
structuring recommendation, investigations, and adversarial issues
together with industrial disputes, chapter, and associated litigation.
As these markets proceed their speedy progress and market
members proceed to evolve and mature their companies, we’re
offering this weekly digest as a useful resource that highlights and
summarizes a number of key current authorized regulatory
developments.
Wyoming Turns into First U.S. State to Launch
Stablecoin
On August 19, the Wyoming Steady Token Fee (WYSTC)
introduced the mainnet launch of the Frontier Steady Token (FRNT),
marking a historic second for Wyoming as the primary U.S. state to
launch a blockchain-primarily based stablecoin. FRNT is absolutely backed by U.S.
{dollars} and brief-length Treasury securities held in belief for
the advantage of FRNT stablecoin holders, pursuant to W.S. 40-31-106.
In reference to the launch of FRNT, the WYSTC has engaged
know-how and different service suppliers, together with Franklin
Advisers, to handle the money and money equal reserves, and
LayerZero as a know-how associate. FRNT will launch on a number of
public blockchain networks, together with Ethereum, Polygon, and
Solana. For added data, please go to WYSTC’s
web site here and the press launch here.
New York Lawmaker Proposes Unwavering Crypto Transaction
Tax To Fund Substance Abuse Packages
On August 13, New York State Meeting Member Phil Steck
launched a invoice proposing a 0.2 p.c tax on all cryptocurrency
transactions, together with these involving stablecoins, with out
exemptions for on a regular basis funds or account transfers. Steck argues
that crypto is basically speculative and shouldn’t be handled
otherwise from different taxable actions, likening it to
leisure reminiscent of baseball video games, which additionally incur taxes. The
tax, projected to lift $158 million yearly, is geared toward
increasing substance abuse assist companies in upstate New York.
Critics, nonetheless, warn the invoice might unintentionally penalize
routine transfers between customers’ personal accounts and complicate
compliance. Whereas Steck stays agency on taxing excessive-frequency
buying and selling and exhibits skepticism towards crypto’s use as foreign money,
the broader legislative outlook stays unsure, because the New York
Legislature is out of session till January. For extra
data, please see Invoice A08966 here.
U.S. Securities and Change Fee (SEC) Chair Paul
Atkins Suggests Most Crypto Tokens Are Not Securities
On the Wyoming Blockchain Symposium on August 19, SEC Chair Paul
Atkins said that solely a small variety of crypto tokens needs to be
thought-about securities, marking a major departure from the
company’s earlier stance beneath former Chair Gary Gensler.
Atkins emphasised {that a} token by itself is “most likely
not” a safety and that classification is determined by how the
token is packaged and bought. His remarks replicate the SEC’s
evolving stance by means of its Undertaking Crypto initiative, whilst
Congress strikes ahead with laws to outline crypto market
construction. The Home has already handed the Digital Asset Market
Readability Act, and the Senate is predicted to contemplate its model
after getting back from recess in September, with bipartisan assist
anticipated. See the video of Atkins’ dialogue here.
U.S. Treasury Seeks Public Enter on Combating Illicit
Crypto Exercise Underneath GENIUS Act
On August 18, the U.S. Treasury issued a request for public
remark, out there till October 17, on how monetary establishments
can detect and stop illicit use of digital belongings. The suggestions
will assist analysis mandated by the not too long ago signed GENIUS Act,
specializing in the effectiveness, prices, and potential privateness or
cybersecurity dangers of present and rising instruments. Treasury
Secretary Scott Bessent emphasised the regulation’s significance for
strengthening U.S. management in digital finance, noting that
stablecoins might enhance world entry to the greenback and increase
demand for U.S. Treasuries. The initiative indicators the
administration’s dedication to constructing a regulatory framework
that helps each innovation and safety within the digital asset
area. See the Treasury Division’s press launch here.
Performing Chairman Pham To Converse at Main Web3 Conferences
in Tokyo Subsequent Week
Performing Commodity Futures Buying and selling Fee (CFTC) Chair
Caroline D. Pham will take part in two main Web3 conferences in
Tokyo later this month. On August 26 at WebX2025–Asia’s
largest world Web3 convention, produced by CoinPost, Japan’s
main Web3 media outlet–she’s going to current “Writing the
Guidelines for Cross-Border Web3: Regulatory Framework for International
Digital Property” and be part of a hearth chat titled “The
Regulatory Reset: America’s New Framework for Digital
Property.” WebX2025 brings collectively professionals from the
crypto asset, blockchain, and broader Web3 ecosystem, together with
corporations, specialists, entrepreneurs, buyers, authorities officers,
and media from Japan and world wide. As well as, Pham will
converse on the Blockchain Leaders Summit Tokyo 2025 on August 27 on
“How one can Form the Laws & Insurance policies for the Subsequent Period
of Web3.” This unique, invitation-solely occasion connects
Japan’s blockchain leaders with the worldwide Web3 ecosystem,
fostering excessive-worth networking and strategic discussions geared toward
driving collaboration and innovation as Japan continues to emerge
as a key hub within the blockchain area. See a CFTC announcement
relating to WebX2025 here and the Blockchain Leaders Summit Tokyo
2025 here.
South Korea Suspends Crypto Lending Amid Regulatory
Overhaul
On August 19, South Korea’s Monetary Providers Fee
(FSC) ordered native crypto exchanges to droop all lending
companies instantly, citing important investor dangers and the
absence of a proper regulatory framework. The transfer follows a surge
in lending exercise, with 27,600 customers borrowing $1.1 billion in
only one month, 13 p.c of whom confronted pressured liquidation on account of
market volatility. Exchanges together with Upbit and Bithumb have
launched aggressive lending merchandise, prompting considerations from
regulators about instability and a regulatory grey zone. The FSC
pledged to introduce clear pointers to guard customers and
stabilize the market, permitting present loans to be repaid or
prolonged beneath present phrases. This crackdown comes alongside
broader efforts by the South Korean authorities to manage and
increase digital finance, together with plans for spot crypto
change-traded funds and a stablecoin framework pegged to the
Korean received. South Korea’s FSC’s press launch will be
discovered here; nonetheless, English translations are
unavailable as of August 20.
Tether Hires Former White Home Crypto Adviser Bo Hines
Amid U.S. Enlargement Plans
On August 19, Tether, the world’s largest stablecoin
firm, appointed Bo Hines, former government director of the
President’s Council of Advisers on Digital Property, as its
strategic advisor for U.S. operations. Hines, a 29-yr-previous Yale
graduate and former congressional candidate, not too long ago stepped down
from his White Home position, the place he was instrumental in advancing
key crypto initiatives beneath President Donald Trump’s second
time period, together with the primary stablecoin regulation invoice and a significant
coverage report on digital belongings. Tether, which is predicated in El
Salvador and holds over $167 billion in USDT tokens, greater than 60
p.c of the stablecoin market, has largely stayed out of the
U.S. following regulatory actions in 2021 however is now searching for
reentry amid shifting political and regulatory landscapes. As half
of this renewed push, Hines will assist form Tether’s U.S.
technique, construct relationships with policymakers, and assist the
firm’s effort to adjust to new guidelines, together with the search
for an auditor and plans for a brand new greenback-backed stablecoin
focusing on institutional use. See a press launch by Tether here.
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