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In Today’s Edition:
**Headline:Fed Sets Stablecoin Reserve RulesGlobal Legal Roundup****Case Study:**Binance Faces Iran Sanctions Probe
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HEADLINE
**State of play: **The Fed’s GENIUS Act proposal gives stablecoin issuers a clearer compliance map ahead of the January 2027 effective date, yet it arrives months past the July deadline and with one Board governor still uneasy about how enforcement will work.
Payment stablecoins would need full backing by short-term Treasury bills or other highly liquid assets.
Issuers would also face standardized capital requirements and risk management standards.
Banks supervised by the Board would get a dedicated application route to issue their own stablecoins.
The underlying law, signed by Trump last year, already mandates dollar or equivalent backing and annual audits.
Governor Michael Barr backed the package but warned that limiting AML action to “significant or systemic” issues could hamper supervision.
**What’s Next: **The proposal heads into public comment while the OCC, FDIC, and other agencies finalize their own parallel rules, all racing to land final text before January 2027.
**Why it Matters: **As the first detailed reserve and capital framework from the Fed, this becomes the template for bank-issued stablecoins and ties sector growth directly to short-term Treasury demand.
Our Take: The GENIUS Act was sold as opening dollar issuance to new players, but a dedicated bank application lane plus standardized capital rules hands the advantage to incumbents with existing balance sheets and compliance teams.
GLOBAL LEGAL ROUNDUP
🇺🇸
SEC’s Hester Peirceto departnext week.🇺🇸
Blockchain Association CEOto step down.🇺🇸
New Yorkmovesto block Polymarket from the state.🇺🇸
Kalshilosesappeal over Ohio and Tennessee sports betting laws.🇺🇸
CFTCwarns‘mention market’ carry heightened manipulation risk.🇺🇸
Binanceprobedby US federal prosecutors for sanctions violations.🇺🇸
Fedproposesreserve limits, capital standards for stablecoin issuers.🇺🇸
CFTC Chairman Seligsaysmarkets must prepare for ‘mass tokenization.’🇨🇦
KelpDAOsuesLayerZero, claims it endorsed setup used in $292M exploit.
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ECBpushto expand stablecoin yield ban to crypto lending and staking.
🇭🇰
Hong Kongjailsex-banker over $1.6B false credit, cryptocurrency bribes.
CASE STUDY
State of play: Three years after a $4.3B guilty plea was meant to close its compliance chapter, Binance is reportedly under federal investigation again, this time over whether it knowingly let trading continue in breach of US sanctions on Iran.
The Manhattan US attorney’s office leads the probe, with the DOJ’s criminal division in Washington assisting.
Binance says it does not tolerate sanctions violations and fully cooperates with law enforcement.
The exchange says over 1,500 staff, about 25% of its global headcount, now work on compliance.
Binance sued Dow Jones for defamation in March after the WSJ reported a similar DOJ probe into Iranian fund flows.
Senator Richard Blumenthal opened a separate inquiry in February into an alleged $1.7B flow to Iranian entities, which Binance says lacks evidence.
Our Take: The real risk is not a new fine but the 2023 plea deal itself, since knowing sanctions breaches after that agreement would undercut Binance’s claim to be a reformed exchange and invite far harsher terms.
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