Cryptocurrency

The SEC has issued guidance on how federal securities laws apply to crypto vaults and onchain lending strategies, emphasizing that moving activities onchain does not exempt them from regulatory oversight. Market participants must carefully analyze vault structures, lending protocols, and management functions to determine whether they trigger investment contract, investment company, or investment adviser requirements.

This weekly digest from Lowenstein Crypto examines critical developments in digital asset regulation, including new ethics provisions in the CLARITY Act that would prohibit federal officials from issuing cryptocurrencies, SEC Commissioner Hester Peirce's guidance on crypto vaults and lending strategies, and a legal challenge to Illinois' controversial digital asset tax. The brief also covers BitMEX's planned shutdown and Russia's new retail crypto trading framework.

The Financial Conduct Authority has published its final policy position on the UK's new cryptoasset regime, introducing significant changes to how trading platforms, intermediaries, and custodians will operate. Key modifications include relaxed transparency requirements for dealers, clarified safeguarding rules, and a case-by-case approach to decentralised finance regulation. The framework establishes comprehensive conduct standards while providing flexibility for international firms and various business mo