04-06-2026 
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The United States digital asset market structure legislation appears to be moving backwards and the level of stakeholder urgency is rising with every tick of the legislative clock.
- CLARITY advancing, no, retreating, no wait, advancing, uh, never mind
- Coinbase gets national trust charter approval
- Treasury offers GENIUS proposal as Fed guv urges strong stablecoin oversight
- CFTC sues states over prediction markets
- CFTC settles with KuCoin and FTX engineer Nishad Singh
- DoJ charges foreign market-makers
- Crypto in 401(k) looks like a go
Last week passed without the promised public reveal of the latest ‘agreed-upon’ language governing the stablecoin “yield v rewards” portion of the CLARITY Act. Instead, Politico reported on April 2 that stakeholders—aka the crypto platforms that want to go on offering “rewards” to stablecoin holders and the banks that are dead set against anything resembling these platforms paying out “interest”—would get a look at the latest, surefire, almost-certainly-destined-to-disappoint compromise.
The day before Politico’s report, Paul Grewal, chief legal officer of the Coinbase (NASDAQ: COIN) digital asset exchange, told Fox Business that lawmakers and stakeholders are “very close to a deal.”
Grewal claimed to be “very confident we’re going to see progress,” suggesting that a deal could be reached within 48 hours. To virtually no one’s surprise, that deadline came and went without a deal, although in Grewal’s defense, he did make those comments on April Fool’s Day.
Grewal rubbished the banking sector’s claims that allowing Coinbase and other crypto operators to offer yield/rewards/interest to users for passively holding stablecoins on their platforms will cause massive “deposit flight” as bank customers transfer cash in their savings accounts to crypto platforms in search of greater returns. Grewal called this a “theoretical argument” for which there’s “no evidence … whatsoever.”
Deal or no deal, Grewal predicted that “we’re moving toward a markup hearing in the Senate Banking Committee, hopefully as soon as in the next few weeks, and ultimately a floor vote.”
Grewal’s optimism isn’t shared by some others in the digital asset community, as well as some analysts who cover this sector. TD Cowen analyst Jaret Seiberg said last week that his firm was “increasingly pessimistic” that CLARITY will get done before Washington’s attention turns to November’s midterms. Seiberg put the odds of the Senate passing a version of CLARITY that the House of Representatives will support at no better than “one-in-three.”
Discussing the latest Senate proposal to limit rewards for passively holding stablecoins while permitting them for certain (as yet undisclosed) activities, Seiberg said “this would discourage investors from using stablecoins as a way to invest excess liquidity, which is why the platforms like Coinbase would object. And for the banks, it is negative as it gives crypto platforms an incentive to find ways to use stablecoins for everyday purchases, which represents the real threat to core deposits.”
Seiberg suggested that Congress should ignore the ultimatums issued by both sides of this interminable debate and simply ram through the current compromise. But Seiberg acknowledged this would be an unusually forceful method for Congress, which makes it all the more unlikely in the current do-nothing legislative climate.
Coinbase conditionally approved for banking charter
While Coinbase might not be making much headway on its stablecoin rewards push, last Thursday saw the company announce that it had received conditional approval for a national trust bank charter from the Treasury Department’s Office of the Comptroller of the Currency (OCC).
Since Donald Trump’s return to the White House last year, the OCC has been doling out charter application approvals to a host of digital asset firms, including stablecoin issuers Circle (NASDAQ: CRCL), Ripple Labs, Bitgo, Paxos, and more. World Liberty Financial (WLF), the issuer of the USD1 stablecoin that has financial ties to the Trump family, filed its OCC charter application in January.
Many stablecoin issuers have pursued charters in order to cut costs by taking on the stablecoin custodian role currently handled by third parties. Other applicants want to be able to custody assets on behalf of other companies lacking federal approval. It appears Coinbase is no different.
Coinbase insists that it “is not becoming a commercial bank.” Instead, Coinbase is “bringing federal regulatory uniformity to the custody and market infrastructure business we have been building for years.” The new charter (once officially approved) will allow Coinbase “to provide clear oversight over assets in safekeeping—and that is exactly how we intend to use it.”
In keeping with the friction that greets any additional inroads that crypto operators make into the banking sector’s traditional turf, the Bank Policy Institute (BPI) quickly declared that it had “significant concerns about whether [Coinbase’s] proposed activities are consistent with law.”
The BPI noted that national trust companies “are subject to substantially less regulation than full-service banks.” The BPI added that “national trust bank parent companies that are not bank holding companies are not subject to federal banking agency supervision and may engage in any commercial activities, which undermines the longstanding principle that banking and commerce should be separate.” The BPI closed by saying it plans to “closely review the approval to determine if the OCC followed the law” in conditionally approving Coinbase’s application.
Coinbase’s Grewal was quick to respond, saying “only an entitled incumbent used to getting their way for decades would deem concerns ‘significant’ merely because they raised them.”
GENIUS moves
The endless focus on the stablecoin war may have led some to forget that the feds still have to issue the regulations that will transform the stablecoin-focused GENIUS Act into something more than a symbolic piece of paper. On April 1, the Treasury Department issued a request for comments on its latest proposal for how to implement GENIUS.
Treasury has given the public 60 days to comment on its “Broad-Based Principles for Determining Whether a State-level Regulatory Regime Is Substantially Similar to the Federal Regulatory Framework.” The 87-page document focuses on reminding state regulators that, while GENIUS permits state-level oversight of stablecoins with market caps under $10 billion, that oversight must be “substantially similar” to the federal framework stipulated for larger issuers under GENIUS.
Treasury is but one of the federal branches required to weigh in on how GENIUS should be implemented, as the OCC issued its own proposed implementation plans last month. The Federal Deposit Insurance Corporation (FDIC) is meeting on April 7 to discuss its GENIUS rulemaking proposals, but FDIC chair Travis Hill has already signaled that stablecoins will not qualify for deposit insurance.
On March 31, Federal Reserve Gov. Michael Barr gave a speech to the Federalist Society on the subject of implementing GENIUS. Barr reminded the audience of America’s “long and painful history of private money created with insufficient safeguards.”
Barr noted that the quality and liquidity of reserve assets “are critical to [stablecoins] long-run viability,” but issuers look to maximize returns on their assets by “extending the risk spectrum as far out as possible.” Barr said GENIUS was a good-faith effort to bring oversight to the sector, but “a great deal will depend on how federal and state regulators implement the statute.”
Barr has previously expressed similar concerns, saying last October that issuers’ reserve assets shouldn’t include reverse repo agreements based on non-traditional assets like BTC tokens. Barr warned of issuers using the bifurcated system to engage in “regulatory arbitrage” that could put consumers at risk.
CFTC goes to bat for prediction markets
Assuming CLARITY becomes law at some point, the Commodity Futures Trading Commission (CFTC) will take the lead on digital asset oversight. The Securities and Exchange Commission (SEC) seems only too happy to let the CFTC take point, as its ‘token taxonomy’ basically says tokens that qualify as securities are about as rare as albino unicorns.
Despite the CFTC’s budget and headcount being a fraction of the SEC’s, CFTC Chair Michael Selig appears confident that his group is up to the challenge of overseeing crypto. In an op-ed published by the conservative Breitbart news outlet detailing Selig’s first 100 days as chairman, he says the CFTC stands “is ready to take responsibility for a $3 trillion crypto asset market that is growing larger by the day.”The op-ed also included a strident defense of the CFTC’s right to oversee prediction markets as “designated contract markets” (DCM). In February, Selig threatened to take legal action against any U.S. state that dared refer to prediction markets as illegal gambling operators for offering sports ‘markets’ to state residents without a state gambling permit.
More and more states have begun pushing back against operators like Kalshi and Polymarket, as well as crypto operators like Coinbase, who have begun adding prediction markets to their offerings. Arizona went one better last month, filing criminal charges against Kalshi for (a) offering sports bets without a betting license, and (b) offering election-based wagering, which is illegal in the state.
On April 2, Selig made good on his threat, announcing that the CFTC, in tandem with the Department of Justice (DoJ), had filed three separate lawsuits against Arizona, Connecticut, and Illinois, accusing them of interfering with the CFTC’s “clear and longstanding exclusive jurisdiction to regulate event contracts under the Commodity Exchange Act.”
The announcement quoted Selig castigating the three states’ “overzealous” authorities for daring to “impose inconsistent and contrary obligations on market participants.” Selig later tweeted that the states’ “aggressive attempts to overstep the CFTC have led to market uncertainty and risks destabilizing effects for market participants and our registrants.”
The suits name Illinois Gov. J.B. Pritzker, Arizona Gov. Katie Hobbs, Connecticut Gov. Ned Lamont, along with each state’s attorney general, gaming regulators and other officials, as defendants.
Perhaps conveniently, all three governors are Democrats. The CFTC has yet to take action against Nevada Gov. Joe Lombardo, a Republican, despite his state having secured a temporary restraining order against PolyMarket in January and secured a similar order against Kalshi last month. A state judge extended that Kalshi ban on April 3 based on his view that predicting sports outcomes is “indistinguishable” from sports betting.
At the federal level, there are bipartisan legislative efforts to prohibit prediction markets offering sports-related “markets” and also to prohibit Washington insiders from profiting off sensitive information, including details related to national security, by placing bets (sorry, predictions) on the platforms.
Further controversy erupted last week after Polymarket began taking bets on if/when U.S. pilots shot down over Iran might be rescued. Polymarket ultimately took down these wagers after Rep. Seth Moulton (D-MA), a retired Marine veteran, expressed his disgust online at this “dystopian death market.” Moulton also pointed out that Donald Trump Jr., who has invested ‘double-digit millions’ in Polymarket, “may have access to intelligence that isn’t public yet.”
CFTC clears KuCoin, FTX files off its desk
During Trump’s second term, neither the CFTC nor the SEC has appeared all that interested in pursuing fresh legal actions against crypto operators, while doing all they can to expunge their files of legal actions initiated under the previous administration.
Case in point: on March 30, the CFTC announced a settlement with Peken Global Limited, parent company of the KuCoin exchange, for “allowing U.S. participants to trade directly n its electronic trading and order-matching system without registering with the CFTC as a foreign board of trade.”
Peken will pay a $500,000 penalty, but the CFTC isn’t seeking disgorgement of funds derived from this unlicensed activity. The CFTC also dismissed (with prejudice) other charges included in the original action, as well as associated charges filed against three other Kucoin-affiliated firms.
In March 2024, the Biden-era CFTC charged KuCoin with offering derivatives to U.S. customers without U.S. permission. In January 2025, KuCoin reached a $300 million settlement with the DoJ for operating an unlicensed money transmitting business. Kucoin began blocking U.S. customers from its exchange as part of that settlement.
In another Biden-era hangover, the CFTC announced on April 1 that it had resolved its civil enforcement action against Nishad Singh, the former head of engineering at the FTX exchange, which collapsed in spectacular fashion in November 2022 following the exposure of a massive fraud scheme.
The CFTC’s deal with Singh requires him to disgorge $3.7 million in ill-gotten gains (real estate, in this case) and bans him from trading commodities for five years. However, the CFTC isn’t seeking “restitution and/or a civil monetary penalty” from Singh “at this time,” citing his cooperation with federal authorities following FTX’s collapse.
In March 2023, Singh pleaded guilty to criminal fraud and money laundering charges and agreed to testify against his former boss, FTC founder Sam Bankman-Fried (SBF). It was a smart play, as Singh was sentenced to three years of supervised release while SBF got 25 years behind bars.
DoJ targets market-makers for wash trading
Certain branches of the federal government appear to make exceptions to the current “hands off crypto” vibe permeating Washington, particularly when the evildoers are (a) based outside the U.S., and (b) lack inroads with the current occupant of the White House.
On March 30, the U.S. Attorney’s Office for the Northern District of California announced the indictment of 10 individuals associated with four different crypto market makers—Gotbit, Vortex, Antier, and Contrarian—for “orchestrating fraud schemes to artificially inflate the trading volume and price of cryptocurrencies.”
The indicted individuals stand accused of wash trading, aka trading tokens back and forth between related parties to create the illusion of public demand for certain tokens. The resulting rise in the price of these tokens caused retail suckers to buy in, after which the accused dumped the tokens and left the suckers to deal with the resulting plunge in the tokens’ value.
For this probe, the DoJ partnered with the Federal Bureau of Investigation (FBI) and the Internal Revenue Service’s Criminal Investigation unit (IRS-CI). The three agencies “created several cryptocurrency tokens” that they appear to have hired the market makers to promote. A similar fake token scheme in 2024 resulted in the U.S. Attorney for Massachusetts filing wash trading-related charges against numerous individuals and market makers, including Gotbit.
Charges of wire fraud and wire fraud conspiracy have been filed against the 10 indicted individuals. Three of the accused—Vortex CEO Gleb Gora, Contrarian CEO Manu Singh and Contrarian biz-dev associate Vasu Sharma—were arrested last year in Singapore and are currently in U.S. custody. Over $1 million worth of tokens were seized as part of this action.
On March 24, the Binance exchange issued a notice regarding “market maker red flags and guidelines for crypto projects and users.” Among these red flags was “volume that doesn’t match price behavior,” with Binance warning of suspicious activity that “can indicate wash trading rather than organic demand.”
Crypto retirement is go!
On March 30, the Department of Labor’s (DoL) Employee Benefits Security Administration issued its proposed rules for allowing employer-sponsored 401(k) retirement plans to include digital assets and private equity alongside more traditional investment vehicles. The proposal follows last August’s executive order from Trump instructing the DoL to consider the merits of incorporating ‘alternative assets’ into Americans’ retirement portfolios.
The proposed rule would require plan fiduciaries to “objectively, thoroughly, and analytically consider, and make determinations on factors including performance, fees, liquidity, valuation, performance benchmarks, and complexity.” If these fiduciaries can offer evidence that they engaged in these considerations, they’d be protected from legal blowback if these alternative assets prove to be digital duds. The public has until June 1 to submit comments.
The news was applauded by a parade of federal secretaries and agency chiefs, while private equity types are equally pumped about the ability to unload their sketchier shares on an unsuspecting public. The proposal also has its critics, including those who point out that this proposal was made just as the SEC is limiting investors’ ability to see what Wall Street firms are up to, but nobody likes a Debbie Downer, do they?
Back when adults were still running things in Washington, the DoL was decidedly negative on the concept of digital assets in 401(k) plans. The DoL expressed its unease even before the great crypto crash of 2022 occurred, and ended up looking prescient given the severe devaluation in token prices that followed.
Trump’s executive order was issued while tokens like BTC were still on their way to all-time price highs. But those same tokens have lost nearly half their value since their October peaks, which in a normal world would lead many Americans to feel uneasy about introducing such volatility into their retirement planning.
Watch: What’s ahead for crypto regulation? Highlights from Blockchain Futurist Conference 2025
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