Intro

What were the most important legal and regulatory developments in crypto this month? In this episode, we review developments from stablecoin rulemaking and DeFi liability cases to the ongoing fight over prediction markets.

Jonathan Schmalfeld is Director of Policy at The Digital Chamber, where he focuses on crypto policy, digital asset legislation, and regulatory developments in Washington.

Timestamps

➡️ 1:07 — SEC guidance allowing broker-dealers to apply a 2% capital haircut to payment stablecoins
➡️ 4:37 — OCC’s GENIUS Act implementation proposal and the debate over stablecoin yield restrictions
➡️ 11:14 — The Promoting Innovation and Blockchain Development Act and developer liability protections
➡️ 17:27 — Federal court dismissal of claims against Uniswap and what it means for DeFi developers
➡️ 22:55 — How Kalshi enforced insider trading rules in its CFTC-regulated prediction markets
➡️ 27:37 — Kalshi’s preliminary injunction against Tennessee regulators and the federal preemption fight
➡️ 31:15 — Why prediction market litigation could eventually reach the U.S. Supreme Court
➡️ 36:25 — Institutional adoption: Morgan Stanley custody plans, Kraken’s Fed master account, and crypto banking licenses
➡️ 40:24 — Operation Chokepoint 2.0 and proposed rules eliminating “reputational risk” in bank supervision
➡️ 43:23 — Why competition between crypto and traditional finance is accelerating

Sponsor: Day One Law, a boutique corporate law firm founded by Nick Pullman. Nick and his team at Day One provide strategic legal counsel to startups, crypto projects, and Web3 innovators. ⁠You can get in contact with them via this link⁠: ⁠⁠https://www.dayonelaw.xyz/#contact

Resources:

📃 Updated SEC Division of Trading & Markets FAQ

✍️ Hester Peirce statement on updated SEC FAQ

📃 OCC Notice of proposed rulemaking for implementation of the GENIUS Act

📓 Promoting Innovation in Blockchain Development Act of 2026

📃 Kansas City Fed statement on Kraken’s fed master account

Disclaimer: This podcast is for informational and educational purposes only and does not constitute legal or investment advice. Views expressed by the guest are their own and do not necessarily reflect those of their employers. Listening to this podcast does not create an attorney-client relationship.