Major news out of the SEC and CFTC this week for the digital asset industry. The Agencies are advancing coordinated oversight of digital assets through a new cooperation agreement and a joint framework that classifies major cryptocurrencies as digital commodities, alongside initiatives such as a crypto fundraising safe harbor and Nasdaq’s tokenized securities pilot.

Litigation trends reflect growing risks tied to emerging technologies, including sanctions for fabricated legal citations, crypto-related arbitration disputes, and lawsuits against OpenAI and xAI over AI training practices and deepfakes.

Meanwhile, market activity highlights accelerating institutional adoption and consolidation, with Mastercard’s planned acquisition of BVNK, continued large-scale Bitcoin purchases by Strategy Inc., a major funding round for Kalshi Inc., and ongoing strategic deals by GSR and Polymarket.

Dive into our newest newsletter to find out more.

Regulatory Updates

(Some) Clarity at Long Last: SEC and CFTC Issue Landmark Joint Interpretation Establishing Five-Part Crypto Asset Taxonomy 

On March 17, the SEC and CFTC jointly issued an interpretive release (Release Nos. 33-11412; 34-105020) providing long-awaited clarity on the application of federal securities laws to crypto assets. The interpretation establishes a five-part token taxonomy for crypto assets based on their characteristics, uses and functions: digital commodities, digital collectibles, digital tools, payment stablecoins (under the GENIUS Act), and digital securities. Bitcoin, Ether, Solana, XRP, and other major cryptocurrencies are classified as “digital commodities,” not securities. The interpretation also addresses how a non-security crypto asset may become subject to, and subsequently cease to be subject to, an investment contract, and clarifies the treatment of airdrops, protocol mining, staking, and wrapping. The release is binding on both agencies, supersedes prior staff guidance on these topics, and applies prospectively. | For an in-depth review of this development, read our article The Crypto Asset Interpretation: The SEC and CFTC Issue Momentous Interpretive Release.

SEC and CFTC Sign Historic Memorandum of Understanding, Launch Joint Harmonization Initiative 

On March 11, the SEC and CFTC executed a new Memorandum of Understanding establishing a framework for joint policymaking, data sharing, coordinated examinations, and aligned enforcement across areas of overlapping jurisdiction. The agencies simultaneously launched a Joint Harmonization Initiative with six stated priority workstreams, including building a fit-for-purpose regulatory framework for crypto assets and reducing registration friction for dually registered firms. SEC Chairman Paul Atkins stated that the MOU represents a “roadmap for a new era of harmonization” intended to end decades of regulatory turf wars that have stifled innovation. | Read More 

SEC Chairman Atkins Outlines Proposed Token Safe Harbor for Crypto Startup Fundraising 

In remarks delivered alongside the joint interpretive release on March 17, SEC Chairman Paul Atkins announced that the Commission is considering a “fit-for-purpose” safe harbor framework for crypto asset offerings. The proposed “startup exemption” would provide a time-limited registration exemption for offerings of investment contracts involving certain crypto assets, potentially lasting up to four years and permitting entrepreneurs to raise up to a defined threshold (suggested at $5 million) with principles-based disclosures. Chairman Atkins framed the safe harbor as a complement to ongoing Congressional efforts around the CLARITY Act and emphasized that the interpretive release represents “a beginning, not an end” to the Commission’s efforts to provide regulatory clarity for digital assets. | Read More 

SEC Approves Nasdaq Pilot to Trade Tokenized Securities on Blockchain Rails 

The U.S. Securities and Exchange Commission on March 18 approved Nasdaq’s proposal to allow certain securities to trade and settle in tokenized form, marking a landmark step for the integration of blockchain technology into mainstream U.S. equity markets. The pilot program will initially cover Russell 1000 stocks and select index ETFs, with tokenized shares carrying the same CUSIP numbers, tickers, investor rights, and execution priority as their traditional counterparts. The Depository Trust Company will handle tokenization and settlement. Nasdaq’s global chief legal officer John Zecca noted that the approval affirms tokenization can be implemented within the existing U.S. regulatory framework while preserving investor protections. | Read More 

CFTC Grants Phantom Wallet First-of-Its-Kind No-Action Relief for Derivatives Access 

The U.S. Commodity Futures Trading Commission on March 17 issued a no-action letter (Letter No. 26-09) to Phantom Technologies, the developer of the Phantom self-custodial crypto wallet popular in the Solana ecosystem, clearing the firm to offer users access to regulated derivatives and event contract markets without registering as an introducing broker. The relief is conditional on Phantom functioning solely as a passive, non-custodial software interface that routes user orders directly to CFTC-registered designated contract markets and futures commission merchants, without taking custody of funds or exercising trade discretion. Phantom described the outcome as a potential regulatory template for other wallet providers seeking to integrate regulated financial products. | Read More 

Litigation Updates

AI Use? Fake Citations, Real Consequences: Court Sanctions Lawyer Over Fabricated Brief 

An Oregon appellate court recently imposed a $10,000 sanction on an attorney after discovering that a legal brief he filed contained multiple fabricated case citations and mischaracterized legal authorities. The attorney maintained that the errors were not the result of artificial intelligence, but rather stemmed from staff relying on what appeared to be credible legal analysis found through online searches, which was later incorporated without proper verification. The court emphasized that regardless of how a brief is prepared, the signing attorney bears ultimate responsibility for ensuring the accuracy and integrity of all cited authorities. Compounding the issue, the attorney failed to correct the inaccuracies for several months despite being alerted to them, leading the court to conclude that sanctions were warranted to uphold professional standards of candor and diligence. | Read More 

$2M Crypto Mining Dispute Heads Toward Arbitration Showdown 

An Alabama-based company facing a $2 million fraud lawsuit tied to a Bitcoin mining operation is urging a federal court to push the dispute into arbitration, arguing that the claims are fundamentally contractual in nature. The defendant contends that the Singapore-based plaintiff’s allegations, ranging from misrepresentations about mining site ownership to improper handling of payments, are not independent torts, but instead arise directly from a service agreement governing hosting, billing, and operational responsibilities. Because that agreement includes a mandatory arbitration clause requiring disputes to be resolved in Mississippi, the company asserts that the Federal Arbitration Act obligates the court to enforce it, even where fraud claims are alleged.  | Read More 

Britannica Takes on OpenAI: Landmark Lawsuit Targets AI Training Practices 

Encyclopedia Britannica and its subsidiary Merriam-Webster have filed a lawsuit against OpenAI, alleging that the company improperly used tens of thousands of their copyrighted articles to train its AI models, including ChatGPT. The complaint claims that OpenAI’s systems can generate responses that closely mirror Britannica’s content, effectively substituting for the original source and diverting web traffic away from its platforms. In addition to copyright infringement, Britannica also raises trademark concerns, arguing that the AI’s outputs can misleadingly reference its brand in inaccurate or fabricated responses. OpenAI has defended its practices as lawful, asserting that its models rely on publicly available data in a manner protected by fair use. | Read More 

Women Take Aim at Grok (xAI) AI Deepfakes in Escalating Legal Fight 

A growing class action lawsuit against Elon Musk’s AI company, xAI, alleges that its Grok technology enabled the creation and spread of nonconsensual, sexually explicit deepfake images using their real photos. The case centers on claims that the tool was used to manipulate ordinary images, often pulled from social media, into explicit content that was then circulated online, causing significant emotional harm and reputational damage. Plaintiffs argue that xAI failed to implement adequate safeguards to prevent this type of abuse and, in some instances, profited from the technology’s widespread misuse through third-party integrations. The lawsuit is part of a broader wave of legal challenges targeting AI companies over deepfake exploitation, particularly involving women and minors, and highlights the growing tension between rapid AI innovation and the need for enforceable protections against digital abuse. | Read More 

Update: Hawk Tuah Girl Speaks Out About Her Alleged Crypto Scam Participation 

Internet personality Haliey Welch, best known for her viral “Hawk Tuah” moment, opened up about the fallout from a failed cryptocurrency venture that quickly drew federal attention. After helping promote a meme coin that surged in value before rapidly collapsing, Welch became entangled in a broader controversy that triggered investigations and investor lawsuits targeting the project’s creators. She has maintained that she lacked meaningful understanding of cryptocurrency at the time and was persuaded to participate, emphasizing that she received only a marketing fee and did not profit from the token itself. The sudden crash left many investors with losses and sparked allegations of fraud and misrepresentation, though Welch herself has said she ultimately faced no charges following inquiries by regulators. | Read More 

Legislative Updates

Senate Reaches Bipartisan Compromise on Stablecoin Yield, Clearing Path for CLARITY Act

Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), with White House backing, announced on March 20 an agreement in principle resolving the stablecoin yield dispute that had stalled the Digital Asset Market Clarity Act since January. Under the deal, passive yield earned simply for holding a dollar-pegged stablecoin is banned, while activity-based rewards tied to payments, transfers, or platform use remain permitted. The Banking Committee markup is now targeted for the second half of April, with a realistic Senate floor vote window of May through June 2026.

CLARITY Act Advances but DeFi Oversight and Ethics Provisions Remain Unresolved

Despite the stablecoin yield breakthrough, several provisions of the CLARITY Act remain in active negotiation as the bill moves toward committee markup. Multiple Senate Democrats have raised concerns about decentralized finance creating vulnerabilities for illicit finance, and the bill’s treatment of DeFi protocols—particularly anti-money-laundering obligations—has not been finalized. Additionally, the question of how senior government officials holding crypto assets are treated under the bill’s conflict-of-interest framework continues to generate bipartisan debate.

Market Updates

Mastercard Agrees to Acquire Stablecoin Infrastructure Firm BVNK for Up to $1.8 Billion 

Mastercard announced on March 17 a definitive agreement to acquire London-based BVNK, a stablecoin infrastructure platform, for up to $1.8 billion including $300 million in contingent payments. The deal, expected to close by year-end pending regulatory approvals, surpasses Stripe’s $1.1 billion purchase of Bridge in 2025 as the largest stablecoin-focused acquisition to date. BVNK’s platform enables businesses to send, receive, and convert stablecoin payments across all major blockchain networks in over 130 countries. Mastercard’s Chief Product Officer Jorn Lambert stated that the acquisition will enable the payments network to deliver interoperability between fiat and stablecoins at scale, positioning Mastercard to serve financial institutions and fintechs as digital currency payment use cases expand. | Read More 

Strategy Executes Record $1.57 Billion Weekly Bitcoin Purchase, Total Holdings Reach 761,068 BTC 

Strategy Inc. (formerly MicroStrategy) disclosed its largest single-week Bitcoin acquisition of 2026, purchasing 22,337 BTC for approximately $1.57 billion at an average price of $70,194 per coin during the week of March 9–15. The purchase was primarily funded through $1.18 billion in sales of its variable rate STRC perpetual preferred shares, with the balance raised via $396 million in Class A common stock issuance. Strategy’s total holdings now stand at approximately 761,068 BTC, representing more than 3.4% of Bitcoin’s ultimate 21-million-coin supply. Executive Chairman Michael Saylor has stated a goal of holding one million Bitcoin by year-end, a target requiring approximately 5,700 BTC per week for the remainder of 2026. | Read More 

Prediction Market Kalshi Raises $1 Billion at $22 Billion Valuation 

Kalshi Inc. raised more than $1 billion in a new funding round led by Coatue Management, valuing the prediction market platform at $22 billion, according to Bloomberg. The deal roughly doubles Kalshi’s valuation from its previous round in December 2025, when it raised $1 billion at $11 billion from investors including Paradigm, Sequoia Capital, and Andreessen Horowitz. Kalshi, which is regulated as a financial exchange, reported that its monthly trading volume exceeded $10 billion in February 2026 (a twelve-fold increase over the prior six months) and an annualized revenue run rate of approximately $1.5 billion. The platform’s rapid growth has intensified competition with rival Polymarket in the expanding event-contract and prediction market sector. | Read More 

GSR Acquires Autonomous and Architech for $57 Million to Expand Capital Markets Infrastructure 

Crypto liquidity provider and market maker GSR announced on March 17 the acquisition of Autonomous, a digital asset advisory firm, and Architech, a capital markets infrastructure company, in transactions totaling $57 million. The dual acquisitions are intended to consolidate advisory, liquidity, and capital markets infrastructure, services that GSR described as traditionally operating in disconnected silos, into an integrated offering. The deals reflect the broader trend of crypto-native liquidity providers expanding their technology stacks and institutional capabilities through M&A as the sector matures and demand for full-service digital asset solutions grows. | Read More 

Polymarket Acquires DeFi Infrastructure Startup Brahma in Third Deal of 2026 

On March 18 prediction market platform Polymarket announced the acquisition of Brahma, a startup specializing in DeFi infrastructure for businesses and individuals managing digital assets, according to Fortune. Financial terms were not disclosed. Brahma’s capabilities in on-chain execution and asset management strategy are expected to deepen Polymarket’s DeFi infrastructure as the platform scales. The deal marks Polymarket’s third acquisition in 2026, following its purchases of developer-tools firm Dome and executive search firm Lunch in February. The rapid deal pace underscores the company’s strategy of acqui-hiring engineering talent and expanding its technical capabilities as it builds toward a reported $20 billion valuation. | Read More 

Recent Insights

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