Under my vision for an innovation exemption, innovators and visionaries will be able to immediately enter the market with new technologies and business models but will not be required to comply with incompatible or burdensome prescriptive regulatory requirements…
— Paul S. Atkins, American Leadership in the Digital Finance Revolution, speech delivered July 31, 2025, U.S. Securities and Exchange Commission
In this issue of the TLDR, we highlight a renewed mention of an innovation exemption from the SEC Chairman, the SEC’s newly released 2025 regulatory agenda, and much more.
Regulatory Updates
SEC Chairman Atkins Signals 2025 Rulemaking to Support Crypto Innovation
On September 23, 2025, SEC Chairman Paul Atkins stated that the agency is actively working toward formal rulemaking to support crypto firm innovation. Speaking at CoinDesk’s Policy & Regulation Summit in Washington, D.C., Atkins emphasized the need to move beyond ad hoc enforcement and toward clear, predictable rules for digital asset markets. His remarks follow the SEC’s Spring 2025 Regulatory Agenda and align with broader federal efforts to modernize crypto oversight.
The SEC’s internal initiative, Project Crypto, is expected to produce draft rules on token classification, custody, and disclosure standards by Q1 2026. Firms should prepare to engage during public comment periods. | Read More
SEC’s 2025 Agenda Signals Regulatory Clarity for Crypto
On September 4, 2025, the SEC released the Spring 2025 Unified Regulatory Agenda, outlining the Commission’s priorities for the coming year. The agenda emphasizes clarifying rules for crypto assets, reducing compliance burdens, and modernizing outdated regulations.
This agenda marks a strategic pivot for the SEC under Chairman Atkins. The SEC is prioritizing clear, actionable rules for the issuance, custody, and trading of crypto assets. This is a welcome shift from the prior “regulation by enforcement” approach. For crypto exchanges, custodians, and token issuers, this should mean more predictable compliance pathways and fewer legal ambiguities. Fintechs and private capital platforms may benefit from simplified capital-raising pathways and reduced disclosure burdens. This could accelerate innovation and lower barriers for startups entering regulated markets.
Chairman Atkins’ agenda reflects a pro-business, innovation-friendly posture. He stated “[a] key priority of my Chairmanship is clear rules of the road for the issuance, custody, and trading of crypto assets while continuing to discourage bad actors from violating the law.” Firms should prepare for:
- Engagement Opportunities: The SEC may open comment periods on crypto rule proposals. Participating early can help shape favorable outcomes.
- Strategic Positioning: With the SEC signaling openness to modernization, fintechs should assess whether legacy compliance burdens (e.g., CAT reporting, disclosure rules) could be reduced — and how that might affect product development or expansion.
SEC Fast-Tracks Crypto ETFs with New Listing Standards
On September 18, 2025, the U.S. Securities and Exchange Commission (SEC) approved generic listing standards for commodity-based exchange-traded products (ETPs), including crypto ETFs. This move allows exchanges like Nasdaq, Cboe BZX, and NYSE Arca to list crypto ETFs without requiring individual SEC approval under Section 19(b) of the Securities Exchange Act. The first ETF approved under this framework was the Grayscale Digital Large Cap Fund (GLDC), which includes Bitcoin, Ether, XRP, Solana, and Cardano.
ETFs can now be listed if the underlying crypto asset has a futures market on a regulated exchange for at least six months. This eliminates months of regulatory delay and public comment periods. Analysts predict a surge in ETF launches starting in October, including memecoin ETFs (e.g., Dogecoin, Trump token) and theme-based multi-asset funds. The new standards reduce administrative overhead and shorten launch timelines from up to 240 days to as little as 75 days.
Retail and institutional investors will gain exposure to previously inaccessible crypto assets via regulated investment vehicles. Early movers who align with the new framework may capture market share before saturation. | Read More
SEC to Notify Firms of Technical Violations Before Enforcement
On September 15, 2025, the U.S. Securities and Exchange Commission (SEC) announced a policy shift: it will begin notifying businesses of technical violations before initiating enforcement actions. This change, confirmed by SEC Chairman Paul Atkins, aims to improve transparency and fairness in regulatory oversight. The move comes amid criticism of the SEC’s prior “regulation by enforcement” approach, particularly in the crypto and fintech sectors.
Firms will now receive pre-enforcement notices for minor or technical infractions, allowing time to correct issues before facing penalties. This is especially relevant for startups navigating complex securities laws. The policy could significantly lower the risk of reputational damage and costly litigation stemming from inadvertent compliance missteps. The SEC is signaling a more collaborative posture, encouraging dialogue and voluntary remediation over punitive action. | Read More
CFTC Grants Polymarket No-Action Relief for Event Contracts
On September 3, 2025, the Commodity Futures Trading Commission (CFTC) issued a No-Action Letter to DCMs and SEFs (Designated Contract Markets and Swap Execution Facilities) regarding the listing of event contracts, specifically referencing Polymarket. The letter clarifies that the CFTC will not recommend enforcement action against platforms listing certain types of event-based binary options — such as political outcomes or economic indicators — under specific conditions. This follows Polymarket’s prior settlement with the CFTC in 2022 and reflects evolving views on prediction markets.
Polymarket and other platforms may now operate with greater confidence, provided they comply with the conditions outlined in the letter — including limits on contract types and user protections. The relief will likely pave the way for broader adoption of event-based derivatives, especially in areas like sports, elections, and macroeconomic forecasting.
The relief does not constitute a legal determination on whether the contracts are swaps or comply with all CEA provisions. It is limited to enforcement discretion and may be revoked if facts change.
Litigation Updates
- Judge Denies Justin Sun’s Bid to Block Bloomberg from Publishing Crypto Fortune Estimates – On September 22, 2025, a U.S District Court judge rejected Tron founder Justin Sun’s request for a temporary restraining order against Bloomberg, allowing the outlet to publish details of his estimated holdings, including billions in TRX, BTC, ETH, and USDT. This decision is the latest in a dispute brought forward by Sun, who alleges that Bloomberg wrongly published information about his crypto holdings. The decision by the Delaware court ultimately concluded that the information published by Bloomberg were not objectively offensive to a reasonable person and amounted to information that was “arguably less specific than what other entities and Sun himself have made public.” | Read More
- Praetorian Group International Director Pleads Guilty to $200M Bitcoin Ponzi Scheme – On September 17, 2025, Ramil Ventura Palafox, CEO of Praetorian Group International (PGI), pleaded guilty in Virginia federal court to wire fraud and money laundering charges related to a $200 million Bitcoin Ponzi scheme that defrauded around 90,000 investors globally. The operation lured participants with promises of high returns through multi-level marketing and fake Bitcoin trading, using funds from new investors to pay earlier ones and fund lavish lifestyles, ultimately leading to approximately $63 million in investor losses. The action by the U.S. Department of Justice represents an alignment with the stated objective of US agencies to increase their crackdowns on crypto fraud. Palafox will face up to 40 years in prison at sentencing. | Read More
- FTX Trust Sues Genesis Digital for $1.15 Billion in Alleged Fraudulent Transfers – The FTX Recovery Trust filed suit in the U.S. Bankruptcy Court for the District of Delaware on September 22, 2025 against Bitcoin mining firm Genesis Digital Assets and its co-founders Rashit Makhat and Marco Krohn, seeking to recover $1.15 billion in alleged fraudulent transfers. The complaint alleges that former FTX CEO Sam Bankman-Fried, through his hedge fund Alameda Research, used commingled and misappropriated customer funds to make investments in Genesis at “outrageously inflated prices” between August 2021 and April 2022, providing little value in return while FTX was insolvent. This case, brought under the Uniform Fraudulent Transfer Act, is part of broader clawback efforts to benefit FTX creditors amid the exchange’s 2022 bankruptcy. Genesis Digital Assets has not yet issuing a public response to the allegations. | Read More
- Class Action Lawsuit May Follow Unicoin Enforcement Action – Rosen Law Firm, a global investor rights law firm, has announced an investigation of potential securities claims on behalf of investors in Unicoin Rights Certificates issued by Unicoin, Inc. f/k/a TransparentBusiness, Inc., resulting from allegations that Unicoin may have issued materially misleading business information to the investing public. The announcement follows hot on the heels of the SEC’s enforcement action this summer, which alleges that Unicoin and its leadership conducted a $100 million fraud scheme by selling “rights certificates” that purportedly entitled holders to future Unicoin tokens. Unicoin claimed the tokens would be backed by equivalent values in real-world assets and also represented that its offerings were “SEC-compliant,” although the SEC contends that neither of these claims were true. | Read More
- CFTC Issues Consent Order Against Former Voyager CEO in Digital Asset Fraud CaseOn September 15, 2025, the U.S. Commodity Futures Trading Commission secured a court order requiring Stephen Ehrlich, ex-CEO of Voyager Digital, to pay $750,000 in disgorgement to affected customers and imposing a three-year registration ban along with permanent injunctions against future fraud violations. The action stems from allegations of misleading customers about the safety of their assets on the platform, highlighting ongoing regulatory scrutiny of crypto lending practices amid Voyager’s 2022 bankruptcy. | Read More
Legislative Updates
Senate Releases Draft of Responsible Financial Innovation Act
On September 5, 2025, the Senate Banking Committee released a 182-page discussion draft of the Responsible Financial Innovation Act (RFIA). This draft builds on the House’s Digital Asset Market Clarity Act (CLARITY Act) and proposes a comprehensive framework for regulating digital assets, including definitions, exemptions, and compliance pathways. A separate draft from the Senate Agriculture Committee, covering CFTC-related provisions, is expected later this month.
A separate draft covering CFTC-related provisions is expected from the Senate Agriculture Committee. This will address commodity oversight, derivatives, and market infrastructure — completing the dual-agency framework. If momentum continues, a reconciled bill could be introduced for a full vote before year-end, with implementation phases beginning in early 2026.
Recent Insights
Our team continues to monitor rapidly evolving developments in financial regulation, enforcement, and digital assets. Stay informed with deeper insights from our team on the latest legal developments in the digital asset industry.