UK body proposes property category for crypto assets, SEC sued over status of NFTs: Law Decoded

SEC Commissioner and head of the crypto task force, Hester Peirce, says US financial firms are navigating crypto in a way that’s similar to playing the children’s game “the floor is lava,” but in the dark.“It is time that we find a way to end this game. We need to turn on the lights and build some walkways over the lava pit,” Peirce said at the SEC “Know Your Custodian” roundtable event on April 25.The lava is crypto, says PeircePeirce explained that SEC registrants are forced to approach crypto-related activities like “the floor is lava,” where the aim is to jump from one piece of furniture to the next without touching the ground, except here, touching crypto directly is the lava. “A D.C. version of this game is our regulatory approach to crypto assets, and crypto asset custody in particular,” she said.Peirce said that, much like in the game, firms wanting to engage with crypto must avoid directly holding it due to unclear regulatory rules. “To engage in crypto-related activities, SEC-registrants have had to hop from one poorly illuminated regulatory space to the next, all while ensuring that they never touch any crypto asset,” Peirce said.Source: US Securities and Exchange CommissionPeirce said that investment advisers are often unsure which crypto assets qualify as securities, what entities count as qualified custodians, and whether “exercising staking or voting rights” could trigger custody violations.“The twist in the regulatory version is that it is largely played in the dark: burning legal lava and no lamps to illuminate the way.”Peirce also said that a broker or ATS that cannot custody or manage crypto assets will struggle to facilitate trading, making it unlikely for a “robust market” to develop.Echoing a similar sentiment, SEC Commissioner Mark Uyeda said at the event that as more SEC registrants work with crypto assets, it’s essential that they have access to custodial options that meet legal and regulatory requirements.Uyeda said the agency should consider letting advisers use “state-chartered limited-purpose trust companies” with the authority to hold crypto assets as qualified custodians.Related: Blockchain needs regulation, scalability to close AI hiring gapMeanwhile, the recently sworn-in chair of the SEC, Paul Atkins, said that he expected “huge benefits” from blockchain technology through efficiency, risk mitigation, transparency, and cutting costs.He reiterated that among his goals at the SEC would be to facilitate “clear regulatory rules of the road” for digital assets, hinting that the agency under former chair Gary Gensler had contributed to market and regulatory uncertainty.“I look forward to engaging with market participants and working with colleagues in President Trump’s administration and Congress to establish a rational fit-for-purpose framework for crypto assets,” said Atkins.Magazine: Bitcoin $100K hopes on ice, SBF’s mysterious prison move: Hodler’s Digest, April 19 – 25

Solana decentralized finance (DeFi) protocol Loopscale has temporarily halted its lending markets after suffering an approximately $5.8 million exploit. On April 26, a hacker siphoned approximately 5.7 million USDC (USDC) and 1200 Solana (SOL) from the lending protocol after taking out a “series of undercollateralized loans”, Loopscale co-founder Mary Gooneratne said in an X post. The exploit only impacted Loopscale’s USDC and SOL vaults and the losses represent around 12% of Loopscale’s total value locked (TVL), Gooneratne added. Loopscale is “working to resume repayment functionality as soon as possible to mitigate unforeseen liquidations,” its said in an X post. “Our team is fully mobilized to investigate, recover funds, and ensure users are protected,” Gooneratne said.Loopscale’s ‘Genesis’ lending vaults. Source: LoopscaleIn the first quarter of 2025, hackers stole more than $1.6 billion worth of crypto from exchanges and on-chain smart contracts, blockchain security firm PeckShield said in an April report. More than 90% of those losses are attributable to a $1.5 billion attack on ByBit, a centralized cryptocurrency exchange, by North Korean hacking outfit Lazarus Group.Related: Crypto hacks top $1.6B in Q1 2025 — PeckShieldUnique DeFi lending modelLaunched on April 10 after a six-month closed beta, Loopscale is a DeFi lending protocol designed to enhance capital efficiency by directly matching lenders and borrowers.It also supports specialized lending markets, such as “structured credit, receivables financing, and undercollateralized lending,” Loopscale said in an April announcement shared with Cointelegraph. Loopscale’s order book model distinguishes it from DeFi lending peers such as Aave that aggregate cryptocurrency deposits into liquidity pools.Loopscale’s daily active users. Source: Mary GooneratneLoopscale’s main USDC and SOL vaults yield APRs exceeding 5% and 10%, respectively. It also supports lending markets for tokens such as JitoSOL and BONK (BONK) and looping strategies for upwards of 40 different token pairs. The DeFi protocol has approximately $40 million in TVL and has attracted upwards of 7,000 lenders, according to researcher OurNetwork.Magazine: Ripple says SEC lawsuit ‘over,’ Trump at DAS, and more: Hodler’s Digest, March 16 – 22

United States Senator Jon Ossoff expressed support for impeaching President Donald Trump during an April 25 town hall, citing the President’s plan to host a private dinner for top Official Trump memecoin holders. “I mean, I saw just 48 hours ago, he is granting audiences to people who buy his meme coin,” said Ossoff, a Democrat, according to a report by NBC News. “When the sitting president of the United States is selling access for what are effectively payments directly to him. There is no question that that rises to the level of an impeachable offense.”Senator Ossoff said he “strongly” supports impeachment proceedings during a town hall in the state of Georgia, where he is running for reelection to the Senate.The Senator added that an impeachment is unlikely unless the Democratic Party gains control of Congress during the US midterm elections in 2026. Trump’s own Republican Party currently has a majority in both the House of Representatives and the Senate. TRUMP holders can register to dine with the US President. Source: gettrumpmemes.comRelated: US lawmaker says TRUMP coin could risk national securityConflicts of interestOn April 23, the Official Trump (TRUMP) memecoin’s website announced plans for Trump to host an exclusive dinner at his Washington, DC golf club with the top 220 TRUMP holders. The website subsequently posted a leaderboard tracking top TRUMP wallets and a link to register for the event. The TRUMP token’s price has gained more than 50% since the announcement, according to data from CoinMarketCap.The specific guest list is unclear, but the memecoin’s website states that applicants must pass a background check, “can not be from a [Know Your Customer] watchlist country,” and cannot bring any additional guests.On April 25, the team behind TRUMP denied social media rumors that TRUMP holders need at least $300,000 to participate in an upcoming dinner with the president.“People have been incorrectly quoting #220 on the block explorer as the cutoff. That’s wrong because it includes things like locked tokens, exchanges, market makers, and those who are not participating. Instead, you should only be going off the leaderboard,” they wrote.The TRUMP token jumped on news of the private dinner plans. Source: CoinMarketCapLegal experts told Cointelegraph that Trump’s cryptocurrency ventures, including the TRUMP memecoin and Trump-affiliated decentralized finance (DeFi) protocol World Liberty Financial, raise significant concerns about potential conflicts of interest. “Within just a couple of days of him taking office, he’s signed a number of executive orders that are significantly going to affect the way that our crypto and digital assets industry works,” Charlyn Ho of law firm Rikka told Cointelegraph in February. “So if he has a personal pecuniary benefit arising from his own policies, that’s a conflict of interest.”Magazine: Trump’s crypto ventures raise conflict of interest, insider trading questions