As the digital asset sector continues to weave itself deeper into the fabric of global finance, regulatory efforts across jurisdictions are intensifying, sometimes with increased coordination and at other times mired in political drama.
This week brought together a mix of ambition, scrutiny, and international experimentation—from Washington to Gibraltar—showing the tension between innovation and oversight in crypto markets.
Paul Atkins Heralds the End of the SEC’s Crypto “Enforcement-Only” Era
In a potentially game-changing pivot for U.S. crypto regulation, SEC Chair Paul Atkins used a May 12 roundtable titled “Tokenization: Moving Assets On-chain: Where TradFi and DeFi Meet” to reiterate his vision for a coherent regulatory framework designed for digital assets.
Speaking alongside major industry players, including Robinhood’s Johann Kerbrat and Fidelity’s Cynthia Lo Bessette, Atkins emphasized that his tenure would mark the departure from the agency’s controversial “regulation by enforcement” model.
Instead, he pledged to build a clear and rational rulebook that supports the responsible issuance, custody, and trading of crypto assets, while continuing to pursue bad actors.
This shift is welcomed by market participants long frustrated by inconsistent guidance and unpredictable enforcement actions. Atkins’ push suggests the SEC is ready to embrace a more constructive role in the evolution of crypto markets, aligning them more closely with the regulatory standards of traditional finance.
Gibraltar and Bullish Blaze Trail with Crypto Derivatives Rules
While the U.S. works to clarify its domestic stance, Gibraltar is making bold moves on the international front.
On May 13, the British overseas territory announced a partnership with Bullish, the Peter Thiel-backed crypto exchange, and the Gibraltar Financial Services Commission (GFSC) to build the first regulatory regime specifically designed for the clearing and settlement of crypto derivatives.
In what could be a watershed moment, this initiative seeks to apply the rigor of frameworks like EMIR and Dodd-Frank to the crypto world. By separating trading from settlement and introducing a regulated, independent clearing house, Gibraltar hopes to set a new standard in transparency and risk management for digital markets.
This experiment, backed by heavyweight capital and regulatory foresight, may offer a model for other jurisdictions seeking to bridge the gap between TradFi (traditional finance) and DeFi (decentralized finance).
Senators Push Back Against Unrealized Gains Levy
Back in Washington, crypto taxation is once again in the spotlight. Senators Cynthia Lummis and Bernie Moreno have urged Treasury Secretary Scott Bessent to revisit aspects of the corporate alternative minimum tax (CAMT), part of former President Biden’s Inflation Reduction Act, arguing that it inadvertently penalizes digital asset firms by taxing unrealized gains.
In a joint letter, the senators warn that the measure could harm U.S. competitiveness and deter crypto innovation, particularly as other jurisdictions offer more favorable tax environments.
The Treasury has yet to indicate whether it will reconsider how CAMT is applied, but the bipartisan nature of the complaint suggests mounting pressure to provide relief for digital asset companies navigating unclear tax rules.
Stablecoin Bill Gains Momentum Despite Political Firestorm
One piece of legislation making headway despite Washington’s deep partisan divide is a long-awaited stablecoin bill. Revived by Senators Bill Hagerty (R-TN) and Angela Alsobrooks (D-MD), the bill is being fast-tracked for a potential vote before the Memorial Day recess.
With President Donald Trump’s crypto ventures drawing fresh scrutiny (more on that below), lawmakers may be eager to push through regulatory wins before the environment becomes even more politically charged.
The bill, which seeks to establish clear issuance standards and reserve requirements for stablecoin providers, has gained rare bipartisan traction, though its fate is still unclear amid a swirl of election-year narratives.
Trump’s Crypto Entanglements Trigger Congressional Alarm
As crypto legislation inches forward, Trump’s deepening ties to the digital asset space are triggering alarm bells on Capitol Hill.
This week, Democratic lawmakers launched a new probe into the president’s crypto dealings, requesting detailed financial records from the U.S. Treasury concerning Trump-affiliated platforms such as World Liberty Financial and meme coins like $TRUMP and $MELANIA.
In a strongly worded letter dated May 14, Representatives Gerald Connolly, Jamie Raskin, and Joseph Morelle demanded access to suspicious activity reports (SARs) filed since 2023.
The lawmakers expressed concerns over potential money laundering, bribery, and market manipulation tied to these ventures, warning of broader threats to national security and voter trust.
The request follows mounting scrutiny of Trump’s financial interests in crypto, which have expanded rapidly since his return to political prominence. If substantiated, the allegations could fuel an already combustible election cycle, where digital assets are now firmly part of the political battleground.
House Democrats Intensify Pressure: SARs Deadline Set
The investigation escalated further with a follow-up letter on May 15. The same trio of House Democrats doubled down, urging Treasury Secretary Scott Bessent to release the requested SARs by May 30.
In addition to Trump-linked entities, the letter flagged a number of Republican-aligned fundraising platforms and PACs—including Elon Musk’s America PAC—for potential regulatory breaches.
The lawmakers painted a picture of “shocking corruption,” showing the need for transparency amid what they described as predatory behavior targeting vulnerable Americans.
While no formal charges have been announced, the probe is likely to dominate headlines in the coming weeks, casting a long shadow over Trump’s crypto ventures—and potentially the industry more broadly.
Final Thoughts…
This week’s developments show that there is a defining truth in the digital asset era: crypto is no longer operating in the shadows. As regulators, politicians, and institutions grapple with the sector’s complexities, the future of crypto will be shaped not just by code and capital but by policy and politics.
From Gibraltar to Washington, there is growing unease with crypto’s political entanglements. One thing is clear: the age of regulatory ambiguity is ending.
The post This Week in Crypto Regulation News: SEC Rethink, Gibraltar Leap, Trump Probe Roils Capitol appeared first on Cryptonews.
