07-23-2025 
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The U.S. Senate’s digital asset market structure bill has finally made an appearance, while the list of entities hopping on the self-issued stablecoin bandwagon grows ever longer.
- Senate market structure draft arrives
- SEC facing funding cut despite tokenization boom
- Digital asset innovation train keeps-a-rollin’
- U.S. Marshalls data sparks questions over gov’t token treasury
- BitGo and Bullish ready for their IPO close-up
On July 22, the Senate Banking Committee released a discussion draft of its digital asset market structure bill, which it’s christened the ‘Responsible Financial Innovation Act of 2025.’ The 35-page draft is a little threadbare compared to the 254-page CLARITY Act, which was approved by a bipartisan majority in the House of Representatives last week, but it’s a start.
In an accompanying press release, Committee chair Tim Scott (R-SC) joined with Subcommittee on Digital Assets chair Cynthia Lummis (R-WY), Bill Hagerty (R-TN), and Bernie Moreno (R-OH) in declaring that the draft “builds on” CLARITY. However, the draft also looks at “strengthening concepts established” by CLARITY and “expanding on those ideas to further encourage innovation and regulatory clarity for digital assets.”
Like CLARITY, the Senate appears to envision a reduced role for the Securities and Exchange Commission (SEC), likely handing greater responsibility for regulating digital assets to the Commodity Futures Trading Commission (CFTC). There’s even the suggestion that Congress “allow market participants the freedom to choose between being subject to SEC jurisdiction or CFTC jurisdiction.”
Among the draft’s primary areas of emphasis are its efforts to define ‘ancillary assets’, aka tokens that aren’t securities and thus beyond the SEC’s purview. The SEC would be instructed to exempt/ignore certain offers or sales of ancillary assets, including those whose gross sales proceeds don’t exceed $75 million per year over four years.
The SEC would also be told to tailor existing requirements to digital asset activity, rather than apply “outdated, unnecessary, or unduly burdensome” rules to digital assets. The depth of distrust of the SEC is perhaps most evident in the suggestion that Congress take on some of this role “to prevent a later SEC from inappropriately construing these terms.”
Then there’s the not-quite-spitballing suggestions that “existing” tokens be “grandfathered into a new token classification framework created by Congress” and that a “retroactive exemption” be granted to entities that offered or sold tokens prior to the new legislation taking effect.
The co-sponsors have requested that their colleagues submit “feedback and legislative solutions” by August 5.
SEC’s tokenization welcome mat not welcomed by all
Given how far away from digital assets Congress appears to want to keep the SEC, it’s perhaps no surprise that the House of Representatives’ Financial Services subcommittee has proposed cutting the SEC’s fiscal 2026 budget by 7%, a nearly $154 million reduction from FY25 levels. The cuts still need to be approved by the House Appropriations Committee.
The SEC also faces restrictions on future spending to enforce the ‘Cybersecurity Risk Management, Strategy, Governance, and Incident Disclosure’ rule. That Biden-era rule required public companies to report incidents in which their cyber-defenses proved unable to keep bad actors at bay. Banking lobby groups have argued that the rule is ineffective, unnecessary, and can serve as a means for hackers to publicly extort their targets.
While the SEC has paused or dropped most of the civil suits it brought against crypto operators during the Biden era, Bloomberg reported this month that the SEC launched 44 enforcement actions (against all sectors) since Trump’s inauguration in January, only four fewer than during the same period last year.
The SEC’s new chair, Paul Atkins, has stressed that future crypto-specific actions will focus on those involving outright fraud leading to investor harm. For example, the SEC went after Unicoin in May for making false/misleading statements in pitching certificates allegedly entitling purchasers to tokens and stock.
Earlier this month, Atkins praised tokenization as an example of the “innovation” his new-look SEC was eager to promote. Asked about efforts by the likes of Robinhood (NASDAQ: HOOD) to tokenize shares of private companies such as OpenAI and SpaceX, Atkins said he viewed it as “beneficial to the markets” and “an innovative way to address, you know, the workings of the marketplace.”
That view may have been too laissez-faire even for SEC commissioner Hester’ Crypto Mom’ Peirce, who felt the need to issue a statement the following week saying that “[a]s powerful as blockchain technology is, it does not have magical abilities to transform the nature of the underlying asset. Tokenized securities are still securities. Accordingly, market participants must consider—and adhere to—the federal securities laws when transacting in these instruments.”
Also opposing these tokenization efforts are some companies being tokenized against their will, as well as mainstream financial operators. In a July 21 letter to the SEC’s Crypto Task Force, Citadel Securities global head of government & regulatory policy Stephen John Berger said the SEC “should resist self-serving requests for broad exemptions from longstanding securities regulations for these products.”
While Citadel supports technological workarounds to market inefficiencies, Berger said, “Seeking to exploit regulatory arbitrage for ‘look-a-like’ securities is not innovation.” Said look-a-likes are “marketed as an alternative to listed equity securities (as opposed to leveraging a blockchain to improve operational workflows when trading traditional equity securities, such as by enhancing clearing and settlement efficiency).”
Crypto innovation train keeps-a-rollin’
And still the innovations keep coming. On July 22, the Financial Times reported that JPMorgan Chase (NASDAQ: JPM) was “exploring lending against clients’ cryptocurrency holdings,” starting with BTC and ETH, possibly as early as next year.
The report claimed the plans were subject to change, and depended on JPMorgan figuring out what to do with digital assets seized from customers who defaulted on their loans. Most U.S. banks currently don’t keep tokens on their balance sheets, although this could be resolved through the use of a third-party custodian.
Wall Street firms like JPMorgan have already signalled their interest in launching their own stablecoins, and now, following the signing of the GENIUS Act into law on July 18, Western Union (NASDAQ: WU) wants in on this action. On July 21, CEO Devin McGranahan told Bloomberg that his company was “investigating how we might offer stablecoin products” to customers via partnerships with other companies.
McGranahan suggested that since buying a can of Coke directly with stablecoins was nigh on impossible, “converting stablecoins into fiat currencies, particularly in harder-to-convert currencies, is an opportunity for us.” McGranahan added that the company viewed stablecoins as “an opportunity, not a threat.”On July 22, exchange-traded fund (ETF) issuers WisdomTree announced their ‘integrated stablecoin strategy,’ which includes the launch of “two foundational products.” They are USDW, a dollar-denominated stablecoin, and WTGXX, a tokenized U.S. government money market fund. The products “serve complementary functions— USDW for transactions, and WTGXX for yield.”
USDW (currently named WUSD but undergoing a rebrand) is issued by WisdomTree Digital Trust Company and operates on the Stellar blockchain (other networks to follow). The company calls USDW “a transactional asset for tokenized finance,” and it will serve as the ‘dollar rails’ of the company’s WisdomTree Prime retail app.
Also reportedly embracing stablecoins is Polymarket, the prediction betting site that is preparing to return to U.S. shores. Polymarket was forced to cut off its U.S. customers in 2022 after a dustup with the CFTC but is now readying a relaunch thanks to its $112 million acquisition of QCX, a U.S.-licensed derivatives exchange.
Coindesk reported that Polymarket was mulling several stablecoin options, including issuing its own token or striking a revenue-sharing deal with USDC stablecoin issuer Circle (NASDAQ: CRCL). The company has yet to publicly indicate which way it’s leaning.
Federal crypto treasury: it’s complicated
July 22 marked the deadline by which the President’s Working Group on Digital Assets was to submit its report on all things crypto to the White House. It’s unclear when the report might be made public, although speculation has it that this could come by the end of this month.
The Working Group was tasked with (among other things) fleshing out President Trump’s March announcement of the establishment of a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. These two treasuries are to be based on tokens already under the federal government’s control and largely obtained via seizure following criminal probes.
According to the Bitcoin Treasuries website, the U.S. government leads all others with a stash of 198,012 BTC tokens, just ahead of China’s estimated stash of 190,000 (which may or may not have been sold long ago). But data released by the U.S. Marshalls Service (USMS) last week caused a major kerfuffle regarding how much BTC the feds actually hold.
On July 16, The Rage released the results of a Freedom of Information Act (FOIA) request that showed the USMS sitting on 28,988.35 BTC. The apparently missing 169,000 BTC caused Sen. Lummis to tweet that she was “alarmed by reports that the U.S. has sold off over 80% of its Bitcoin reserves … If true, this is a total strategic blunder and sets the United States back years in the bitcoin race.”
However, as The Rage reporter was quick to point out, there’s a difference between ‘seized’ assets and ‘forfeited’ assets. The USMS is in charge of forfeited assets, aka those held by the government but which either rightfully belong to the victims of crime or rightful ownership has yet to be determined.
In other words, the government hasn’t sold off 169,000 BTC, but it also doesn’t mean that the 198k+ BTC listed on the Treasuries site will necessarily form the foundation of a ‘strategic reserve.’ Because the government may not actually own all these tokens, even if it currently has control of all of them.
This begs the question: Why doesn’t Sen. Lummis, author of a Strategic Bitcoin Reserve bill that would require the government to sell its gold and buy BTC, understand this difference?
That said, the U.S. Treasury Department’s Inspector General for Tax Administration issued a report on July 1 stressing the need to improve government procedures “to accurately safeguard seized digital assets.”
The report details deviations from government guidelines for seizing and safeguarding some $8.8 billion in digital assets under the control of the Internal Revenue Service’s Criminal Investigation (IRS-CI) unit. In one case, a recovery seed phrase to a digital wallet was ‘inadvertently’ shredded, while another case saw three hardware wallets go AWOL as the agent responsible for their care ‘separated’ from the IRS-CI.
Bullish Global, BitGo itching for that IPO scratch
The flurry of digital asset operators seeking to go public shows no sign of letting up. In June, the Peter Thiel-backed Bullish Global confidentially filed its initial public offering (IPO) papers with the SEC, but the full filing has now been released.
The filing states that the Bullish exchange has handled $1.25 trillion in lifetime trading volume as of March 31. The exchange further claims to have handled over $2.5 billion in average daily volume on each day of the first quarter of 2025, putting it in the top-five of centralized exchanges for BTC and ETH trading.
While Bullish says it earned net income of $80 million in 2024, it posted a net loss of $349 million in Q125. However, the latter figure was likely due to the dramatic depreciation of the BTC token’s fiat price in Q1 (Bullish had over 24,000 BTC among its liquid assets at the end of Q1).
Apart from the exchange, Bullish also counts the CoinDesk crypto news outlet among its operations. In addition to its news site, CoinDesk also hosts the Consensus conference series.
Also looking to go public is digital asset custodian BitGo, which confidentially filed its IPO draft registration statement this week. As such, we have no information on the company’s financials. Also, the number of shares to be offered and the price of those shares have yet to be determined.
BitGo raised $100 million from undisclosed investors in 2023, giving itself a $1.75 billion valuation at the time. Since then, the company has made some powerful connections, including holding the fiat assets backing the USD1 stablecoin issued by the Trump-linked decentralized finance (DeFi) project World Liberty Financial (WLF).
Last month, Bloomberg reported that BitGo’s assets under custody exceeded $100 billion, up from $60 billion at the start of the year. According to Abel Seow, BitGo’s managing director for Asia-Pacific, half of that $100 billion is tied to staking.
The GENIUS Act’s passage is expected to significantly boost stablecoin activity, potentially leading to additional business opportunities for BitGo and other custodians.
Watch: Reggie Middleton on DeFi, booms/busts & crypto regulation
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