SEC Proposes New Rules To Simplify Crypto Regulation

The US Securities and Exchange Commission (SEC) has published its spring 2025 rulemaking agenda, which is geared towards transforming the regulation of digital assets. Under Chairman Paul Atkins, the agency is seeking to propose around 20 new rules to simplify crypto firms' business while also ensuring investor protection.

One of the key proposals is to establish safe harbours and exemptions for the sale and offer of crypto assets. This would allow companies to understand precisely how they can sell and trade digital assets without risking unclear rules. SEC also wishes to facilitate the trading of crypto assets more easily on national securities exchanges and alternative trading systems.

Another component of the proposal is revising broker-dealer rules. The proposal would relax some of the stringent financial and data reporting obligations, like Know Your Customer and anti-money laundering screening. This should lower the compliance cost for crypto firms, particularly smaller entities.

SEC is also considering modification to the Investment Advisers Act, 1940, to enhance regulations on crypto custody. This is coming after a decision to reverse tighter custody regulations earlier in the year.

Since President Trump's inauguration, SEC has gone more business-friendly with regard to crypto, reported Cointelegraph. Several enforcement actions initiated under the past administration have been abandoned. Atkins has stated that the new agenda will foster innovation, enhance market efficiency, and facilitate the ease of bringing capital into the US crypto market.

Japan Plans Major Shift In Crypto Regulation Under Securities Law

Japan's Financial Services Agency has suggested relocating the regulation of digital assets from the Payment Services Act to the Financial Instruments and Exchange Act. The latter law would use the same framework used for securities, specifically for crypto assets. According to the agency's report examined in a Cointelegraph news article, a number of problems in the crypto industry, including fraud, obscure disclosure, unregistered business activities, and security threats, are similar to those experienced by securities markets.

Under the proposal, crypto issuers would be required to comply with disclosure rules applicable to public offerings and sales. Brokers and intermediaries handling crypto would also be subject to registration and compliance. The plan involves steps for combating unfair trading and grants enforcement powers such as emergency injunctions against unregistered companies. 

The report was given to the Financial System Council, a government advisory body for the Financial Services Minister. The report is a policy recommendation that is internal, and it is up to the government to decide if new legislation will be brought in.

The report points out that crypto consumption in Japan is growing. There are more than 12 million domestic exchange accounts worth over 5 trillion yen, or roughly $33.7 billion in aggregate deposits. This is approximately one account per 10 individuals in Japan. 

More than 80 per cent of the individual accounts have fewer than $675 in assets. Approximately 7.3 per cent of the Japanese investors hold crypto, which is higher than those who invest in foreign exchange or corporate bonds. The majority of the accounts are held by individuals with moderate incomes.

Institutional Investors Lose Millions Due To Trump-Linked WLFI Token's Fall

The WLFI token, which is linked to the Trump family's World Liberty Financial initiative, dropped over 40 per cent since its initial listing on Monday. The selloff resulted in significant losses for big investors referred to as whales.

A prominent holder closed a three-times leveraged long and lost more than $1.6 million. This occurred less than a day following the same investor closing out another trade with a profit of $915,000. Another whale investor who purchased $2 million worth of WLFI mere days prior watched the value of their holdings fall by over $650,000.

In the 24 hours leading up to Thursday morning, WLFI fell an additional 18 per cent. Since launch, the token's price has dropped by a total of 41 per cent. It ranked ninth among the top 100 cryptocurrencies for most bearish investor sentiment during this time.

The platform tried to cap the decline by burning 47 million WLFI tokens, effectively taking them out of circulation forever. The burn was intended to cut supply, but the price of the token kept going down.

WLFI has been among the topmost actively traded tokens since its inception. Trading volumes remain high, but price fluctuations have caused big losses for large holders.