Weekly Update on Cryptocurrency Regulations: GENIUS Act Targets Major Tech Firms, SEC Changes Stance on ETF

This week, the regulatory environment surrounding cryptocurrencies in the U.S. became increasingly prominent as lawmakers and agencies introduced new frameworks, reversed approvals, and concluded long-standing investigations.

A distinct message has surfaced: the U.S. is swiftly advancing to define the next stage of digital asset regulation, with both Congress and federal agencies playing crucial roles.

GENIUS Act Establishes Boundaries Against Big Tech in Stablecoins

One of the most significant updates arises from the recently passed GENIUS Act, which contains a provision specifically aimed at preventing major technology companies and Wall Street from monopolizing the stablecoin market.

Commonly known as the “Libra clause,” this regulation references Meta’s unsuccessful global currency initiative and illustrates regulators’ commitment to avoiding similar concentrations of power in future digital monetary systems.

A provision in the GENIUS Act seeks to limit the influence of technology giants and significant financial entities in the U.S. stablecoin sector. #GENIUS #Stablecoins https://t.co/IE7FZdWjXw

— Cryptonews.com (@cryptonews) July 21, 2025

According to this clause, any non-bank entity intending to issue a dollar-pegged stablecoin must create a separate, independent legal entity to manage the operation. This entity would be subject to antitrust examination and must obtain approval from a Treasury-led oversight committee, which possesses veto authority.

Banks are also bound by limitations. They are required to issue stablecoins through legally distinct subsidiaries that are barred from engaging in leverage, lending, or any activities that could introduce broader financial risks.

This establishes a tightly regulated environment, with parameters that Circle’s Chief Strategy Officer Dante Disparte characterized as more cautious than deposit-token frameworks being considered by major financial institutions such as JPMorgan.

The initiative reflects a vigorous effort by U.S. regulators to ensure that the stablecoin sector does not repeat past problems associated with too-big-to-fail institutions dominating financial systems. It also lays the groundwork for a more comprehensive rethinking of how the U.S. will manage fiat-backed digital assets in the future.

Senate Unveils Market Structure Framework for Crypto

Building on the momentum generated by the GENIUS Act, the Senate Banking Committee has introduced a new draft bill aimed at restructuring the classification and regulation of digital assets.

Named the Responsible Financial Innovation Act of 2025, the bill is co-sponsored by Senators Tim Scott, Cynthia Lummis, Bill Hagerty, and Bernie Moreno.

Senate Banking Chair @SenatorTimScott, @CynthiaMLummis, @SenatorHagerty, @BernieMoreno release a draft on crypto market structure—seeking feedback on 35+ topics. #CryptoMarket #CryptoPolicy https://t.co/XUh532lA9j

— Cryptonews.com (@cryptonews) July 22, 2025

This new legislation seeks to resolve long-standing ambiguities in the crypto industry by establishing a clearer framework for determining when tokens should be classified as commodities versus securities.

It draws from previous legislative efforts such as the bipartisan Lummis-Gillibrand proposal and incorporates aspects of the House-passed CLARITY Act.

By creating uniform regulatory definitions and assigning clearer jurisdictional responsibilities to the SEC and the CFTC, the bill aims to provide digital asset firms with the clarity they have long sought.

It also signifies a growing bipartisan recognition that crypto markets require regulation — but not at the expense of innovation. If enacted, the bill could fundamentally alter how digital assets are launched, traded, and reported within the U.S. market.

DOJ Closes Case Against Jesse Powell

In another significant development, the U.S. Department of Justice has reportedly concluded its investigation into Kraken founder Jesse Powell, bringing an end to a legal saga that began with a raid on his residence in 2023.

The Department of Justice has dropped its investigation into Kraken founder Jesse Powell, according to a new report from Fortune. https://t.co/NmCr5ZbobH

— Cryptonews.com (@cryptonews) July 22, 2025

The investigation stemmed from a management dispute related to the Verge Center for the Arts, a nonprofit organization co-founded by Powell. Allegations included cyberstalking and unauthorized access to confidential information. While Powell has categorically denied these claims, federal agents seized several devices from his home during the inquiry.

Recent reports indicate that the DOJ has since returned the confiscated devices and dropped all charges, implicitly supporting Powell’s account of the situation. The Kraken founder had initiated a civil lawsuit against members of the nonprofit’s board, alleging reputational harm and false accusations.

The closure of this case alleviates a significant legal burden from one of the industry’s more prominent figures and represents a rare instance of federal prosecutors retracting a high-profile crypto-related investigation.

SEC’s Abrupt Reversal on Bitwise ETF Surprises Markets

In a decision that unsettled investor confidence, the Securities and Exchange Commission (SEC) approved — and then quickly rescinded — its approval for Bitwise’s 10 Crypto Index ETF within hours.

SEC Pauses Bitwise ETF Offering Broad Crypto Exposure
The U.S. Securities and Exchange Commission approved and then immediately paused the conversion of Bitwise’s crypto index fund into an exchange-traded fund, leaving it in limbo pending further review.
The SEC’s Division of…

— Cryptonews.com (@cryptonews) July 25, 2025

The ETF was intended to track a diversified collection of cryptocurrencies, including Bitcoin, Ethereum, Solana, XRP, and others, with 85% of its allocation in already-approved assets.

NYSE Arca had received expedited approval to modify its rules for listing the multi-asset fund. However, that decision was swiftly stayed by the SEC’s Assistant Secretary Sherry Haywood under Rule 431. The Commission stated it would conduct additional review of the action taken by its Division of Trading and Markets.

This reversal is particularly significant as it occurred despite the SEC initially determining that the fund met investor protection and anti-fraud standards under the Exchange Act.

This sudden change of course arises as over 70 crypto-related ETF applications — from prominent firms such as Grayscale, VanEck, and Franklin Templeton — await decisions. It also raises concerns regarding how internal divisions within the SEC may be impacting the consistency and clarity of crypto asset approvals.

This week’s events indicate that the regulatory landscape for crypto in the U.S. is rapidly changing — and remains unstable in critical aspects.

While Congress is beginning to provide structure through legislation like the GENIUS Act and the Responsible Financial Innovation Act, federal agencies continue to send mixed signals.

The post Weekly Crypto Regulation News Roundup: GENIUS Act Hits Big Tech, SEC Reverses on ETF appeared first on Cryptonews.