The Encryption Legislation Process in the U.S. Caught in Political Struggles (Issue 2 · Week 29, 2026)

01Latest Developments

Latest Developments

2026-07-13 The Japanese Prime Minister has publicly voiced support for Web3 for three consecutive terms. SBI invested nearly $500 million to develop full-chain solutions, while Rosen launched a stablecoin payment pilot to establish a conglomerate-level compliance framework in line with tax reforms. LayerZero and Centrifuge proposed a hub-and-spoke model aimed at resolving the conflict between compliance requirements and transaction speed in the $33 billion RWA market. The CEO of Robinhood Chain shifted his stance significantly, leveraging the zero-cost traffic from CASHCAT tokens to push the company’s market value up to $200 million.

2026-07-10 Polymarket applied to the NFA for a futures commission merchant license through its affiliated companies and sought approval from the CFTC to amend regulations in order to support partially collateralized transactions. Gate US obtained an additional currency transmission license in Florida, bringing its total state-level licenses to 36 and expanding its compliance footprint across 47 U.S. jurisdictions. EURC, issued by Circle, received approval in France, with both on-chain activity and the number of new addresses reaching four-year highs.

2026-07-09 Wisconsin and New York State filed criminal charges against Circle for refusing to freeze $380,000 in fraudulent assets, sparking a debate over the technical architecture of stablecoins and their legal obligations. Giants such as Samsung and Figure acquired licensed institutions and assets at low prices, completing five acquisitions in the past month. Optimism and OKX are discussing compliance and risk management strategies, with Optimism advocating for control of the transaction layer to be held by relevant parties, while OKX emphasizes proactive risk prevention.

2026-07-08 AscendEX announced its closure due to deteriorating market conditions and compliance pressures under MiCA. Analysts estimate that the platform had a shortfall of several million dollars in funds held in hot wallets.

2026-07-07 Clearstream added six new crypto asset custody services, including those for Ripple and Solana, to meet the needs of institutions under Europe’s MiCA regulations. Jolie Kahn, the CEO of AVAX One, received $410,000 in severance compensation as she left the company, with Pete Wylie taking over as interim CEO. The company is currently dealing with compliance pressures from Nasdaq.

02Impact Analysis

The legislative battles in the United States are shifting from debates over macroeconomic policies to intense divisions at the micro-level of implementation, with compliance costs becoming a key factor driving industry restructuring. The market landscape exhibits a “scissors effect” characterized by rapid consolidation among giants and the elimination of smaller firms: Giants such as Samsung and Figure acquired licensed institutions at low prices around July 9 to accelerate the institutionalization of infrastructure; in contrast, AscendEX was shut down on July 1 for failing to meet MiCA standards, leaving its users facing frozen funds and uncertain repayments, with a shortfall in hot wallets amounting to millions of dollars. This trend indicates that compliance requirements have evolved from mere entry barriers to critical survival thresholds, leading to a significant increase in industry concentration.

The space for regional regulatory arbitrage is rapidly narrowing, resulting in clear divergences in global compliance approaches. Under the EU’s MiCA framework, Clearstream added six new asset custody services on July 7, with EURC seeing record-high activity on the blockchain, and the market value of compliant euro stablecoins doubling within a year. However, these still account for only 0.22% of the dollar market, and the European Central Bank has warned about the risks of excessive issuance, showing that single-regional oversight is unlikely to challenge dollar dominance. In comparison, Japan established a zaibatsu-style compliance ecosystem on July 13 through government support, nearly $500 million in investment by SBI, and pilot payments by Rosen, aiming to seize the benefits of compliance. In the U.S., Gate US expanded its compliant operations to 47 jurisdictions on July 10, while Polymarket applied for an FCM license simultaneously, indicating that local firms are seeking survival space through fragmented licensing.

There is a structural shift in asset prices and narrative logic. Compliance is no longer solely beneficial to traditional blue-chip assets; instead, it has given rise to an “irrational boom on compliant blockchains.” Robinhood’s blockchain, which focuses on RWA, saw its market value soar to $200 million on July 13 due to the rise of CASHCAT, prompting the CEO to change his stance and take advantage of the situation to launch the platform, demonstrating that traffic-driven logic now outweighs technical narratives. Meanwhile, South Korean regulators disclosed a joint action taken on March 28 on July 7, placing BONK under delisting observation, signaling further constraints on the viability of meme coins under strict regulation. Although the RWA sector has reached a scale of $33 billion, the central-radial model proposed by LayerZero and Centrifuge on July 13 exposes the deep contradictions between compliance speed and cross-chain efficiency, pushing the industry away from simply pursuing compliance toward addressing the “compliance speed paradox.”

03Keep an eye on it later.

Ongoing Monitoring

1. Expansion of State-Level Compliance in the U.S. and Tensions with Federal Legislation

• Key Points to Watch: After obtaining a money transmission license in Florida on July 10, 2026, Gate US now covers 47 U.S. jurisdictions through its compliance network. It is necessary to continuously track the progress of license acquisition in remaining jurisdictions, as well as the approval outcome of Polymarket’s application to the NFA for a Futures Commission Merchant (FCM) license on the same date.
• Warning Threshold: If no unified federal framework is established by August 2026 and state-level permits remain fragmented, it could trigger a chain reaction similar to the shutdown of AscendEX on July 1, 2026, due to compliance pressures.
• Category: Continuation of previous focus (U.S. legislative process).

2. Legal Rulings on Stablecoin Freezing Mechanisms and Technical Countermeasures

• Key Points to Watch: Pay close attention to the developments in Circle’s criminal charges in Wisconsin and New York for refusing to freeze $380,000 in fraudulent assets. It is important to monitor whether courts will rule that stablecoin protocols must incorporate mandatory freezing functions, and the impact such rulings might have on compliant stablecoins like EURC.
• Warning Threshold: If Circle fails to reach a settlement or a court order for freezing is issued by July 20, 2026, it could lead to a restructuring of stablecoin technical architectures, causing the number of active addresses on the chains to drop below the four-year high recorded on July 10, 2026.
• Category: New addition this period (outbreak of stablecoin compliance crisis).

3. Institutional Access and Platform Survival Rates under the EU’s MiCA Framework

• Key Points to Watch: Track the inflow of institutional funds into Clearstream, a subsidiary of Deutsche Börse, following its addition of six new crypto asset custodianship services on July 7, 2026. At the same time, monitor AscendEX’s funding shortfall and repayment timeline, as its hot wallet deficit has reached millions of dollars.
• Warning Threshold: If the market value share of EURC remains low at 0.22% by August 2026, and more platforms shut down for failing to meet MiCA standards, it will validate the European Central Bank’s warnings about excessive issuance risks.
• Category: Continuation of previous focus (MiCA compliance wave).

4. Establishment of Compliance Frameworks in Asian Markets and Cleansing of Meme Coins

• Key Points to Watch: Observe the outcomes of Japan’s SBI investing nearly $500 million in full-chain infrastructure on July 13, 2026, as well as the progress of the Rosen stablecoin payment pilot. Also pay attention to the enforcement efforts regarding the delisting of BONK, initiated by South Korea’s three major exchanges on March 28, 2026.
• Warning Threshold: If complementary tax reform policies in Japan are not finalized by September 2026, or if South Korean regulators fail to enforce strict cleansing measures on more meme coins, it could undermine regional compliance benefits.
• Category: New addition this period (Asia’s race to comply).

04Related Reads

1. “Top Execs Team Up; SBI Loses $500 Million, Rosen Takes Action: Japan Seizes the Lead in Compliance Benefits”
2. “The $33 Billion RWA Market: LayerZero and Centrifuge Solve the Paradox of Compliance Speed”
3. “Refusing to Freeze Assets, 380,000 People Face Criminal Charges; Stablecoin Compliance Crisis Erupts”
4. “Polymarket Applies for U.S. FCM License to Offer Margin Trading in Compliance”
5. “Gate US Gets Florida Approval; U.S. Compliance Coverage Expands to 47 Jurisdictions”
6. “MiCA Takes Effect, Triggering a Compliance Wave: EURC’s On-Chain Volume Reaches Four-Year High”
7. “Valuations Cut by 90%; Giants Rush to Obtain Compliance Licenses Amid Bear Market”
8. “Optimism and OKX Discuss Blockchain Compliance and Risk Management”
9. “Compliance Pressures Force Platforms to Shut Down; Hot Wallet Deficits Reach Millions of Dollars”
10. “Deutsche Börse’s Subsidiary Adds Six New Currencies: New Path for Institutional Compliance under MiCA”
11. “AVAX One CEO Resigns; COO Takes Over Amid Nasdaq Compliance Pressures”
12. “Compliance-Driven Market Value Soars 128%, Yet Still Can’t Challenge Dollar Dominance”
13. “Half a Year of Preparation for Compliance Chain, Yet Triggered by a Cat to Create a $200 Million Market Value Surge”
14. “Three Major Exchanges Collaborate to Address Issues: BONK Under Observation for Delisting Due to Compliance Crises”
15. “Compliance Failures Lead to Shutdown: AscendEX’s Withdrawals Stuck in Manual Review Bottlenecks”