After US election wins, the crypto industry looks to the 2026 midterms  

A Russian-Israeli citizen allegedly involved in the $190 million Nomad bridge hack will soon be extradited to the US after he was reportedly arrested at an Israeli airport while boarding a flight to Russia. Alexander Gurevich will be investigated for his alleged involvement in several “computer crimes,” including laundering millions of dollars and transferring stolen property allegedly connected to the Nomad Bridge hack in 2022, The Jerusalem Post reported on May 5.Gurevich returned to Israel from an overseas trip on April 19 but was ordered to appear before the Jerusalem District Court for an extradition hearing soon after, according to the report. On April 29, Gurevich changed his name in Israel’s Population Registry to “Alexander Block” and received a passport under that name at Israel’s Ben-Gurion Airport the next day.He was arrested at the same airport two days later, on May 1, while waiting to board a flight to Russia. Gurevich allegedly identified a vulnerability in the Nomad bridge, which he exploited and stole roughly $2.89 million worth of tokens from in August 2022.Dozens of copycat hackers discovered and capitalized on the security vulnerability soon after, leading to a total loss of $190 million.Gurevich allegedly reached out to a Nomad executive on TelegramProsecutors allege that shortly after the hack, Gurevich messaged Nomad’s chief technology officer, James Prestwich, on Telegram using a fake identity, admitting that he had been “amateurishly” seeking a crypto protocol to exploit.He allegedly apologized for “the trouble he caused Prestwich and his team” and voluntarily transferred about $162,000 into a recovery wallet the company had set up.Prestwich told Gurevich that Nomad would pay him 10% of the value of the assets he had stolen, to which Gurevich responded that he would consult his lawyer. However, Nomad never heard back from him after that.Alleged messages between Gurevich and Nomad’s James Prestwich were shared on X by Israel-based Walla News journalist Yoav Itiel. Source: Yoav ItielAt some point during the negotiations, Gurevich demanded a reward of $500,000 for identifying the vulnerability.Related: Do Kwon is in US custody after extradition battleUS federal authorities filed an eight-count indictment against Gurevich in the Northern District of California on Aug. 16, 2023, in addition to obtaining a warrant for his arrest. California is where the team behind the Nomad bridge is based.The US submitted a formal extradition request in December 2024, the Post noted.The money laundering charges that Gurevich faces carry a maximum of 20 years, significantly harsher than what he would face in Israel.Gurevich is believed to have arrived in Israel a few days before the $190 million exploit occurred, prompting Israeli officials to believe he carried out the attack while in Israel.Magazine: Financial nihilism in crypto is over — It’s time to dream big again

The new “Digital Asset Market Structure Discussion Draft” introduced by House Republicans on May 5 could work to reduce the dominance of large crypto firms and promote more participation in the broader market, according to an executive from Paradigm. The discussion draft, led by the House agricultural and financial services committee chairs Glenn Thompson and French Hill, is an “incremental, albeit meaningful, rewrite” of the Financial Innovation and Technology for the 21st Century Act (FIT21), Paradigm’s vice president of regulatory affairs Justin Slaughter said in a May 5 X post.One-pager of the digital asset market structure discussion draft submitted by House Republicans on May 5. Source: US House Agriculture CommitteeOne of the major changes from FIT21 is that the draft defines an affiliated person as anyone who owns more than 1% of a digital commodity issued by the project — down from 5% in the FIT21 bill — a move Slaughter said may curb the influence of big crypto firms and lead to more participation in the crypto market.“This is a portent of the entire bill. There are often criticisms of crypto being too dominated by a few large firms. This bill makes clear the regulatory regime proposed is going to push against that fact and strongly encourage more small-d ‘democratization’ of the space.”The draft also defines a “mature blockchain system” as one that, together with its related digital commodity, is not under the “common control” of any person or group.Source: Justin SlaughterThe Securities and Exchange Commission would be the main authority regulating activity on crypto networks until they become sufficiently decentralized, Slaughter noted.The draft also clarified that decentralized finance trading protocols are those that enable users to engage in a financial transaction in a “self-directed manner.” Protocols that meet this criterion are exempt from registering as digital commodity brokers or dealers.The draft also referred to digital commodities as “investment contract assets” to distinguish their treatment from stocks and other traditional assets under the Howey test.According to Slaughter’s analysis, securities laws won’t be triggered unless the secondary sale of tokens also transfers ownership or profit in the underlying business.Crypto firms would also have a path to raise funds under the SEC’s oversight while also having a “clear process” to register their digital commodities with the Commodity Futures Trading Commission, the committee members said in a separate May 5 statement.Joint rulemaking, procedures, or guidelines related to crypto asset delisting must be established by the CFTC and SEC should a registered asset no longer comply with rules laid out by the regulators.A ‘clear opportunity’ to advance crypto innovation, rules once and for allSpeaking about the need for a comprehensive crypto regulatory framework, the House committee members said crypto is a “clear opportunity” to advance innovation in the US — most notably through modernizing America’s financial infrastructure and reinforcing US dollar dominance.The Republicans criticized the previous Biden administration and the Gary Gensler-led SEC for adopting a regulation-by-enforcement strategy rather than creating clear rules for market participants.Related: VanEck files for BNB ETF, first in USMany crypto firms were stuck in “legal limbo” as a result of the unclear rules, which pushed some industry players overseas, where clearer rules exist, the House committee members said.“America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime,” said Dusty Johnson, chairman of the subcommittee on commodity markets, digital assets and rural development.Slaughter added: “This is the bill that will, finally, provide a clear regulatory regime on crypto that many have been calling for.”Republicans already facing roadblocks over discussion draftHouse Financial Services Committee Ranking Member Maxine Waters plans to block a Republican-led event discussing digital assets on May 6, a Democratic staffer told Cointelegraph.The hearing, “American Innovation and the Future of Digital Assets,” is expected to discuss the new crypto markets draft discussion paper pitched by Thompson, Hill, and other committee members.However, according to the unnamed Democratic staffer, the current rules require all members of the House Financial Services Committee to agree on such hearings.Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

Samourai Wallet’s lawyers allege federal prosecutors suppressed advice that the firm didn’t need a license before they charged executives at the crypto mixing service months later. In a May 5 letter to a Manhattan federal court, lawyers for Samourai co-founders Keonne Rodriguez and William Hill said prosecutors disclosed that the US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) representatives told them six months before they charged the pair “that under FinCEN’s guidance, the Samourai Wallet app would not qualify as a ‘Money Services Business’ requiring a FinCEN license.”“Shockingly, six months later, the same prosecutors criminally charged Keonne Rodriguez and William Hill with operating just such a business without a FinCEN license,” the lawyers added.The letter claimed that prosecutors were required to share their discussions with FinCEN over Samourai two weeks after they unsealed charges, making the deadline May 8 last year, but instead “suppressed this information for over a year, disclosing it only on April 1, 2025.” Prosecutors charged Samourai CEO Rodriguez and its technology chief Hill with conspiracy to operate an unlicensed money transmitting business and money laundering conspiracy in February 2024, unsealing the charges and arresting the pair in April that year. Samourai’s mixing service took crypto from multiple users and blended it together to hide its origins. The government alleged the platform helped with over $2 billion in illegal transactions and facilitated over $100 million worth of money laundering transactions from online black markets and scammers.Rodriguez and Hill both pleaded not guilty.In the letter, their lawyers said prosecutors shared details of a call with Kevin O’Connor, chief of FinCEN’s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Policy Division staffer Lorena Valente.According to an email from one of the prosecutors summarizing the call, FinCEN said that “because Samourai does not take ‘custody’ of the cryptocurrency by possessing the private keys to any addresses where the cryptocurrency is stored, that would strongly suggest that Samourai is NOT acting as an MSB [money services business].”An excerpt of an email from prosecutor Andrew Chan said FinCEN “did not have a sense” of what it would decide on Samourai. Source: CourtListenerThe email said O’Connor and Valente agreed that the government could try to argue that Samourai functionally controlled the crypto, “but that has never been addressed in the guidance, and so it could be a difficult argument” for prosecutors.Samourai’s lawyers asked the court for a hearing “to determine the circumstances surrounding the Government’s late disclosure” and to administer a remedy.Samourai to renew dismissal bid if case goes onRodriguez and Hill’s lawyers said that, using this latest information, they would again ask for the charges to be dismissed, arguing they lacked fair notice and “understood they were acting lawfully.”Related: US Treasury’s OFAC can’t restore Tornado Cash sanctions, judge rules Prosecutors and Samourai asked the court for more time on April 28 to consider potentially dismissing the case after the Justice Department rolled back its crypto enforcement.Rodriguez and Hill bid to dismiss the case in early April, arguing it should be dropped as Deputy Attorney General Todd Blanche said in an April 7 memo that the Justice Department wouldn’t prosecute crypto mixers for “unwitting violations of regulations.” In the latest letter, their lawyers said if the government “were to resist the Blanche Memo’s directive and push forward,” then they would bid to dismiss as “if they were not money transmitters under FinCEN’s guidance, then they could not possibly be prosecuted for not having a license.”Magazine: Tornado Cash 2.0 — The race to build safe and legal coin mixers