This week's regulatory developments in the United States highlight a crypto industry caught between growing institutional momentum and persistent political fragmentation. Key events include a controversial Bitcoin sale by the Department of Justice, a looming deadline for major market structure legislation, and ongoing debates over DeFi developer protections and stablecoin regulation.
The U.S. Department of Justice (DOJ) has drawn sharp criticism for selling 57 Bitcoin that were forfeited by Samourai Wallet developers. This action directly contradicts an executive order mandating that forfeited Bitcoin be transferred to the Strategic Bitcoin Reserve instead of being liquidated. The sale, reportedly executed through Coinbase Prime, has reignited concerns about the consistency and seriousness with which federal agencies treat Bitcoin as a strategic asset, undermining confidence in Washington's ability to manage coherent crypto policy.
On the legislative front, the push for a comprehensive crypto market structure bill faces significant headwinds from the 2026 midterm elections. A note from TD Cowen warns that election politics could delay the passage of a unified regulatory framework until 2027 or later. Senate Banking Committee Chair Tim Scott has set a hard deadline of January 15 for a committee vote (markup) on the bill, indicating impatience with stalled negotiations.
However, deep divisions remain. Senate Democrats are hesitant to advance sweeping legislation ahead of elections, and conflict-of-interest provisions—including those potentially affecting former President Donald Trump and his family—continue to complicate bipartisan talks. The bill aims to resolve the long-standing regulatory turf war between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) by giving the SEC oversight of "ancillary assets," with tokens potentially falling under CFTC jurisdiction once sufficiently decentralized.
A major sticking point in the negotiations is the protection of DeFi developers. Prosecutors have used federal money transmission laws to charge developers of crypto mixers like Tornado Cash and Samourai Wallet. The DOJ issued a memo in April stating it no longer intends to pursue developers for "the acts of their end users," yet trials and convictions have proceeded. The proposed Blockchain Regulatory Certainty Act, which would codify that crypto developers are not money transmitters, is among the issues under discussion.
Separately, Rep. Ritchie Torres is preparing legislation—the Public Integrity in Financial Prediction Markets Act of 2026—to bar federal officials from trading on prediction markets when they possess material nonpublic information. This follows scrutiny over a reportedly lucrative bet linked to the capture of Venezuelan President Nicolás Maduro.
At the state level, innovation continues to outpace federal policy. Wyoming's launch of a state-backed stablecoin exemplifies this gap. Meanwhile, the American Bankers Association is lobbying Congress to close a "perceived loophole" in last year's stablecoin law (the Genius Act) that allows issuers to offer lucrative rewards, which they argue threatens bank deposits.
The collective picture is one of a regulatory environment defined more by reaction than strategy. As institutional adoption accelerates, the cost of political delay and internal fragmentation is rising, leaving the market in a state of uncertainty.
