US introduces two new crypto bills: Law Decoded, July 17–24

US introduces two new crypto bills: Law Decoded, July 17–24

The Current Landscape of the Blockchain Industry

The blockchain industry is constantly evolving, and recent legislative initiatives in the United States showcase the growing interest and challenges faced by this emerging technology. Last week, Senator Jack Reed introduced a bipartisan bill aimed at tightening Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations for decentralized finance (DeFi) platforms. The bill seeks to subject DeFi operations to the same requirements as traditional financial institutions, such as centralized crypto trading platforms, casinos, and pawn shops. However, this initiative has faced strong opposition from major crypto lobbying groups.

Coin Center and the Blockchain Association have publicly criticized Reed’s bill, referring to it as messy, unworkable, and even unconstitutional. They argue that federal law enforcement agencies already possess the necessary tools and expertise to effectively address concerns related to DeFi without burdening the industry with excessive regulation. This disagreement highlights the ongoing debate between regulators and industry participants regarding the appropriate level of oversight for DeFi platforms. While regulation is crucial to ensure consumer protection and market integrity, it must be balanced with industry innovation and growth.

In response to the challenges faced by the crypto industry, Republican House Agriculture and House Financial Services Committee members proposed the Financial Innovation and Technology for the 21st Century Act. This bill aims to clarify the jurisdiction of regulatory bodies such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) in relation to digital commodities and assets. Moreover, it seeks to address concerns regarding the SEC’s approach to regulation, commonly referred to as “regulation by enforcement.”

The introduction of this bill reflects the growing recognition within Congress that clear and consistent regulatory frameworks are necessary for the sustainable development of the blockchain industry. By providing regulatory clarity, the legislation aims to foster innovation, attract investment, and promote market confidence in digital assets and cryptocurrencies.

Multiple Spot Crypto ETF Applications

In parallel to the regulatory developments in the United States, the Federal Register recently received notices of proposed rule changes for spot Bitcoin exchange-traded fund (ETF) applications from several firms, including BlackRock, Fidelity, Invesco Galaxy, VanEck, and WisdomTree. Publishing these applications in the official journal of the U.S. government initiates the SEC’s evaluation process. The SEC now has the opportunity to accept or reject the applications, extend the evaluation period, or open them for public comment.

The potential approval of Bitcoin ETFs holds significant implications for the broader adoption of cryptocurrencies and the accessibility of such investments to both retail and institutional investors. ETFs, as financial instruments tracking the price of an underlying asset, have been successful in attracting mainstream investment in traditional markets such as stocks and commodities. The introduction of Bitcoin ETFs could provide a regulated and easily accessible vehicle for investors to gain exposure to cryptocurrencies, potentially leading to increased market liquidity and stability.

Kuwait’s Ban on Crypto and Virtual Asset Transactions

Outside of the United States, Kuwait has recently implemented a comprehensive ban on cryptocurrency and virtual asset transactions. The country’s Capital Markets Authority (CMA) issued a circular stating an “absolute prohibition” on operations involving cryptocurrencies, including payments, investments, and mining. This ban also extends to local regulators, who are prohibited from issuing licenses for firms to provide virtual asset services as commercial businesses.

Kuwait’s ban reflects the varying approaches to cryptocurrency regulation worldwide. While some jurisdictions embrace the opportunities presented by blockchain technology and cryptocurrencies, others express concerns regarding their association with illicit activities and potential risks to financial stability. As the blockchain industry continues to expand globally, finding a delicate balance between regulation and innovation remains a complex challenge for regulators and policymakers.

In the realm of crypto mining, Marathon Digital, a U.S.-based mining company, is currently facing legal action from its shareholders. Allegations include breaches of fiduciary duties, unjust enrichment, and wastage of corporate assets by CEO Fred Thiel and other top executives. The shareholders’ legal team claims that the management downplayed the company’s problems, artificially inflated its valuation, received excessive compensation, made lucrative insider sales, and received unjustifiably elevated bonuses based on false and misleading statements.

This lawsuit highlights the importance of governance and transparency within the blockchain industry. As the sector grows, it is crucial for companies to establish robust governance structures, adhere to regulatory requirements, and ensure the fair treatment of investors. The outcomes of such legal battles bear broader significance, shaping the future practices of blockchain companies and reinforcing the need for accountability and integrity within the industry.


The recent legislative initiatives and legal challenges within the blockchain industry provide valuable insight into the evolving landscape of this transformative technology. The debates surrounding regulatory frameworks highlight the delicate balance between fostering innovation and ensuring consumer protection. Concurrently, the potential approval of Bitcoin ETFs and the ban on crypto transactions in Kuwait underscore the contrasting approaches to cryptocurrency regulation worldwide.

As the blockchain industry matures, it is imperative that regulators, industry participants, and investors work together to establish clear and cohesive frameworks. The harmonization of regulations across jurisdictions can promote responsible innovation, safeguard investors, and contribute to the long-term success of blockchain technology and cryptocurrencies. By addressing challenges and maintaining dialogue, the blockchain industry can continue to evolve and unlock the potential for transformative applications in various sectors of the global economy.

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