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In Today’s Edition:
**Headline:SEC Sends Custody Rule to White HouseGlobal Legal Roundup****Case Study:**Ninth Circuit Rules Against Kalshi
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HEADLINE
**State of play: **The SEC has sent a proposed overhaul of crypto custody rules for investment advisers and funds to the White House’s OIRA for review, a step toward potential public comment.
The proposal would amend rules under the Investment Advisers Act and Investment Company Act covering how firms hold client assets, including crypto.
OIRA can request changes before returning the rule to the SEC, which would then vote on releasing it for public comment.
The move is part of the SEC’s broader push on digital assets as the CLARITY Act remains stalled in the Senate.
SEC Chair Paul Atkins has shifted the agency from enforcement toward formal rulemaking since taking over in 2025, including dropping its lawsuit against Coinbase.
**What’s Next: **OIRA reviews the proposal and can request changes before it returns to the SEC, which would then vote on whether to release it for public comment.
**Why it Matters: **Clearer custody rules would give investment advisers and funds a compliant path to hold crypto for clients, removing a longstanding source of regulatory ambiguity.
Our Take: With the CLARITY Act stalled in the Senate, the SEC’s rulemaking push signals regulators are willing to advance crypto policy independently of Congress.
GLOBAL LEGAL ROUNDUP
🇺🇸
Ninth Circuit dealsblowto Kalshi in Nevada sports betting fight.🇺🇸
SECsendscrypto custody rule changes to White House for review.🇺🇸
BAbacksTreasury’s proposed GENIUS Act rules for stablecoin issuers.🇺🇸
Former White House teleprompterorderedto pay for Kalshi trades.🇺🇸
USwidensIran crackdown to encompass crypto, gold, shipping and tech.🇺🇸
ConnecticutsuesKalshi over sports event contracts in months-long legal feud.
🇬🇧
Britainplansnew Bank of England objective for stablecoins.🇩🇪
GermanywidensMiCA lead as latest EU register update adds 6 banks.
🇹🇭
Thailandmoves closerto Bitcoin, Ether ETFs with draft rules.🇵🇰
Pakistankicks offcrypto licensing regime with Sept. 5 registration deadline.
CASE STUDY
State of play: The Ninth Circuit ruled that Kalshi failed to show federal law preempts Nevada’s authority to regulate its sports event contracts, upholding a lower court’s decision to dissolve an injunction against the state.
The court found the Commodity Exchange Act likely does not preempt Nevada’s gaming regulations as applied to Kalshi’s sports contracts.
Nevada’s Gaming Control Board had sent Kalshi a cease-and-desist letter in 2025 threatening criminal or civil charges over its sports and election contracts.
CFTC Chair Michael Selig has claimed “exclusive jurisdiction” over prediction markets and sued several states pursuing their own regulation.
CFTC spokesperson Zach Fulton called the ruling a misread of the statute, saying it sets up a circuit split headed for the Supreme Court.
Kalshi said it disagrees with the ruling and will seek further review.
Our Take: This ruling adds momentum to a state-by-state patchwork the CFTC has been trying to preempt, making a Supreme Court showdown over prediction market jurisdiction increasingly likely.
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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.
