SEC task force met with Trump-supporting firms to discuss crypto regulation  

The Guiding and Establishing National Innovation for US Stablecoins of 2025 Act, known as the GENIUS Act, failed to pass cloture in the United States Senate on May 8, dealing a slight blow to cryptocurrency regulation in the country.The bill, sponsored by Senator Bill Hagerty and co-sponsored by Senators Tim Scott, Kirsten Gillibrand, Cynthia Lummis and Angela Alsobrooks, received last-minute pushback from Democrats, who took aim at the bill and raised concerns about US President Donald Trump’s cryptocurrency ventures.To address the concerns of Senate Democrats, the bill had already been amended to include stricter requirements for stablecoin issuers for further provisions for Anti-Money Laundering.The GENIUS Act was seen as a bipartisan effort to increase regulatory clarity for digital assets in the United States. The focus of the bill, stablecoins used for payments, was looked at as extending dollar dominance internationally and straying away from more controversial crypto topics.After the procedure failed, Senate Majority Leader John Thune criticized Democrats, saying, “Democrats have been accommodated every step of the way frankly, I just don’t get it.”This is a developing story, and further information will be added as it becomes available.

The US federal court for the Southern District of New York has sentenced former Celsius CEO Alex Mashinsky to 12 years in prison for fraud. Mashinsky’s legal team sought a light sentence. They highlighted his spotless record before the Celsius incident, along with his military service and willingness to plead guilty. But US prosecutors were less inclined to leniency, suggesting on April 28 that the judge deliver a 20-year sentence for his actions.Betting markets predicted a light sentence ahead of the May 8 hearing. Polymarket showed only 11% odds for a 20-year sentence or higher.Source: PolymarketPresident Donald Trump began his second term with high-profile pardons of crypto executives, signalling that his administration may bring leniency to crypto fraudsters like Mashinsky. His sentencing today, however, suggests otherwise.Trump’s DOJ wants Mashinsky sentence to serve as a warningCrypto-related crimes have their limits, according to the current US Department of Justice. Jay Clayton, the Trump-nomianted US attorney leading the prosecution, said on April 28 that the suggested 20-year sentence serves as a “critical warning to other entrepreneurs, executives, and promoters in the cryptocurrency industry and in any future industry as-yet unconceived: that fraud will be punished severely, regardless of the technology or industry in which it occurs.”Bitcoin advocate Jameson Lopp quotes the prosecution’s argument that Mashinsky targeted retail investors. Source: Jameson LoppClayton argued that a strong sentence was warranted as the fraud targeted unsophisticated retail investors rather than institutional parties with protections and expertise. Mashinsky “preyed on ordinary individuals who relied on his promises of safety and financial security.” The Mashinsky defense team drew attention to Mashinsky’s character, highlighting his long career in business, devotion to family and service with the Israel Defense Forces. His lawyers also drew distinctions between Mashinsky’s case and that of Bankman-Fried, claiming, “There are no allegations — let alone any proof — that Alex misappropriated, embezzled or stole any customer assets or any Celsius money.”On May 5, Meshinsky’s legal team argued that these mitigating factors should warrant a sentence of no more than 366 days.“The government’s venom-laced submission recasts this case as one involving a predator with an intent to target victims, harm them, and steal their money,” his team said.Meshinsky’s lawyers called the suggested 20-year term a “death-in-prison sentence.”Mashinsky’s sentence follows high-profile Trump pardons for crypto execsTrump started his term with the pardon of Silk Road 2.0 founder Ross Ulbricht, whose acceptance of Bitcoin (BTC) on his narcotics trading platform endeared him to the crypto community. The president also commuted the sentences of Arthur Hayes, Benjamin Delo and Samuel Reed, three BitMEX crypto exchange executives who pleaded guilty to violating the Bank Secrecy Act and failing to establish a proper Anti-Money Laundering program.Sam Mangel, a consultant to white-collar convicts who advised former Trump staffer Steve Bannon and Bankman-Fried, told Politico there has been a large spike in interest in presidential pardons. “Everybody that is in prison now is keenly aware of the environment, and it’s become a very hot topic within the low- and minimum-security inmate communities,” said Mangel.Related: US stablecoin bill loses democrats amid Trump corruption concernsHigh-profile crypto defendants seem to have taken notice, too. Roger Ver, an early Bitcoin advocate and libertarian activist, is facing federal tax evasion charges. In January, he released a video making an outright plea to Trump for a commutation. Ver claimed that he is the victim of lawfare and likened his persecution to Trump’s legal problems following the Jan. 6 scandal. Sam Bankman-Fried, the disgraced former CEO of now-defunct exchange FTX, likened his court experience with Trump’s defamation lawsuit in an interview with The New York Sun on Feb. 18. He claimed his trial was politicized under the Biden administration and that he didn’t think there was “a very fair and balanced view or approach.” His parents also reportedly met with lawyers and people close to the Trump administration to explore the possibility of a presidential pardon. Trump’s commutation of the BitMEX executives has even led former Binance CEO Changpeng Zhao to apply for clemency. On May 6, Zhao said that his lawyers had submitted an application and were awaiting a response. The current administration is still writing the rules of the road as regulators reshuffle personnel and priorities and new legal frameworks for crypto take shape. The picture is further muddled by Trump’s own crypto projects, which have raised concerns over corruption and conflicts of interest. Mashinsky’s sentence shows that, for the financial world, certain crimes will not go unpunished. Magazine: Adam Back says Bitcoin price cycle ’10x bigger’ but will still decisively break above $100K

The US Securities and Exchange Commission (SEC) is considering rule changes to let companies more freely issue tokenized securities, SEC Commissioner Hester Peirce said in a speech published on May 8.The regulator is “considering a potential exemptive order” for firms using blockchain technology to “issue, trade, and settle securities” that would release them from certain registration requirements, Peirce said in the speech.For example, decentralized exchanges (DEXs) may no longer need to register “as a broker-dealer, clearing agency, or an exchange,” Peirce said. The SEC has previously brought numerous charges against DEXs such as Uniswap for failing to register as securities exchanges. Firms should “not have to comply with inapt regulations, which, in many cases, were developed well before the technologies being tested existed and may be obviated by attributes of that technology,” Peirce said. Commissioner Peirce described the planned changes in a May 8 speech. Source: SECUnder such an exemption, companies would still be expected to comply with rules designed to prevent fraud and market manipulation, the commissioner said. They may also need to meet certain disclosure and recordkeeping requirements.Related: Nasdaq urges SEC to treat certain digital assets as ‘stocks by any other name’Sharp policy pivotThe SEC has dramatically pivoted its stance on cryptocurrency oversight since US President Donald Trump took office in January. Under the leadership of former SEC Chair Gary Gensler, the agency brought upward of 100 lawsuits against crypto firms for alleged securities law violations.However, under Trump nominee Paul Atkins, who was sworn in as chair on April 21, the agency has claimed jurisdiction over a narrower segment of cryptocurrencies.In February, the SEC issued guidance stating that memecoins — if clearly identified as purely speculative assets with no intrinsic value — do not qualify as investment contracts under US law. In April, the regulator said that stablecoins — digital tokens pegged to the US dollar — similarly do not qualify as securities if they are marketed solely as a means of making payments.Magazine: Ethereum is destroying the competition in the $16.1T TradFi tokenization race