“Crypto Week” in the House was 2 week ago, where the House passed their market structure bill, the CLARITY Act, on an over 2-1 bipartisan vote. Last week, the Senate was able to begin their market structure legislation in earnest, revealing a discussion draft of how digital assets should be regulated at the SEC, and a list of questions for industry leaders to answer as they continue to craft their own legislation. Meanwhile, the right-to-code criminal trail wrapped up its second week, and crypto continued to work its way into traditional finance.
Here’s everything that happened last week in Web3 legal:
Senate Banking Releases Market Structure Discussion Draft
The Senate Banking Committee has now released a Discussion Draft of their own market structure legislation, following the overwhelming vote of 294-134 in the House passing the House’s digital asset market structure bill, the CLARITY Act. At just 35 pages, the Senate’s Discussion Draft is far shorter than the 536 page CLARITY Act, but it also only addresses SEC-related topics while the Senate Agriculture Committee is expected to release their own discussion draft of CFTC-related topics soon. The Banking Committee also released a set of 35 questions for industry input as they continue to consider how to regulate digital assets.
Tl;dr– Prior to the CLARITY Act vote, most believed the Senate would simply use CLARITY Act as a starting point but prepare their own legislation on market structure issues. It is unclear if the unexpectedly wide bipartisan support changed that plan. It seems the Senate will have two separate bills, one in Senate Banking and one in Senate Agriculture, which will be combined on the Senate floor for a final vote. The belief is that the Senate Agriculture bill dealing with the CFTC elements of market structure will be far longer and closer to the CLARITY Act, but the discussion draft from Senate Banking indicate fairly major changes from CLARITY on SEC-related provisions (decentralization/control test replaced with “ancillary asset” test). It’s still early in the process, so even on an expedited timeline, there is a lot to work its way through the system.
OTHER STORIES
Tornado Trial Witness Sleuthing: This research showing the government’s first witness in Tornado didn’t actually have their stolen funds mixed through the software is amazing. (1.) It shows the government’s complete lack of understanding of the technology or lack of good faith in the Storm prosecution, or both; (2.) It shows why privacy preserving technologies are needed for lawful public blockchain users; and (3.) It shows why only criminals who are dumb or don’t care about getting caught would us crypto in their crimes because a single person without need to subpoena and only using public data was able to trace blockchain transactions in a way that could never be done through traditional banking rails. Also, the more I read about it, the more upsetting it is that a scam victim whose stolen funds never touched Tornado was permitted to testify the hearsay of a “recovery firm” that is seemingly just one of the many “service providers” that prey on already victimized individuals.
Stablecoin Service Provider News: Fresh on the heels of GENIUS passing, Anchorage Digital announced its service for white label and regulatory compliant stablecoin issuances, starting with Ethena. I could see a cottage industry for this, especially for companies wanting to launch a sub-$10 billion stablecoin under state issuance rules.
BAYC Trademark Appeal Finalized: Yuga Labs won on a vast majority of the appeal in its case against Ryder Ripper and others for trademark law and related violations, but the case is heading back to the District Court for determination on likelihood of confusion. So looks like Defendants will get their day in court to talk about stuff that has nothing to do with trademarks.
Crypto TradFi Lending: JPMorgan is reportedly considering plans to allow clients to borrow against their cryptocurrency holdings as early as next year. It makes sense for undercollateralized lending, but overcollateralized lending through DeFi seemingly provides better rates due to ease of price arbitrage and rate visibility. Schwab is also apparently looking to introduce offering their clients exposure to spot crypto, while Blackrock executives are joining ETH treasury companies.
Crypto Treasury Company Updates: The crypto treasury company trend continues with Ether Machine planning to go public through SPAC-style merger, SharpLink increasing its ETH balance through staking rewards and capital raise, and electric car manufacturer Volcon closing on a $500 million BTC treasury raise.
JPGs are Back: A massiveCryptoPunk sweep led to a buying spree as people picked up old NFT projects out of FOMO. And now there are new drops as artists come back to the medium. My blog has NFT in the name, so I think everybody knows my stance on jpgs at this point (most are dumb, but I think lots of cool/valuable stuff is dumb, and also there are lots of NFTs I don’t think are dumb and buy regardless of price. I like the art, idk).
Oregon v. Coinbase Update: As previously covered, the Oregon AG has sued Coinbase in a copy-cat of the SEC lawsuit, which was dropped. The Oregon lawsuit was brought under state securities laws. Coinbase removed to federal court and there is currently a fight over remand which the Blockchain Association has submitted an amicus opposing.
PayPal ENS Support: Really enjoyed this documentation on how PayPal was able to integrate ENS domains into their wallet infrastructure.
Crypto Class Action Bar Update: The class action law firms suing Pump Fun for laughable securities law violation claims has amended their lawsuit to claim SOL and Jito development company executives participated in RICO violations. The industry should be thankful these clowns took the class action mantle so they can mess up and establish terrible case law for the Plaintiffs bar when the good attorneys come along.
Crypto Policy Resource: I really liked this Crypto Policy Under Trump: H1 2025 Report put out by Galaxy Research. Some of the summaries are a bit off, but overall solid and a great resource for primary source documents (if you don’t want to search around my prior updates for those links, which I always try to include as well).
Long Dormant Bitcoin Sale: Galaxy brokered a market sale (weird they didn’t do OTC and probably left close to a hundred million on the table) of 80,000 long-dormant bitcoin. This is after quite a few long-dormant wallets became active recently.
CONCLUSION
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Farcaster. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
Outro/Disclaimer: Since late 2022, I’ve prepared weekly updates for attorneys at my firm to stay abreast of the latest Web3 legal developments. The biggest stories are included in Bi-Weekly posts on the firm’s BitBlog, where we provide tl;dr overviews and insights into the biggest stories from the past two weeks. I post the weekly updates on my personal blog every Tuesday, where I also provide links to more obscure legal developments and otherwise discuss industry trends and stories. Please note, the views and opinions I express, both on BitBlog and my personal blog, are solely my own. They do not reflect the official stance or endorsement of my firm.
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