SEC explains that some Stablecoins are not securities
This week Securities and Exchange Commission (SEC) made a Formal explanation to stablecoins, especially ‘covered stablecoins“Are not securities, which means that they do not need to be registered with the SEC before entering the market. That clarification, although they are probably unnoticed for most crypto users, can mark a significant step forward for the institutional assumption of Stablecoins.
SEC defines a “covered Stablecoin” as one supported by US dollars and/or other low risks, very liquid assets, such as government debt, which allows issuers to meet redemption on request. They continue to say that they Stablecoins explicitly different from Algorithmic Stablecoinsthat uses an algorithm for supply/demand balancing rather than collateral to maintain its price level.
The Commission reached this conclusion by expanding two tests from two different legal cases: Reves v. Ernst & Young
and Sec v. WJ Howy Co. Both tests are frames used to determine if something qualifies as a security. Covered Stablecoins did not meet the criteria for any of the tests and as a result Sec decided that they fell outside securities laws.
Like most of the rules and the delays that have come out of various administrations this year, retail users will probably not notice much of a change, but for crypto companies and older financial institutions, this statement from Sec can be significant as it opens the door to digital assets that play a greater role in the banking and financing world.
SINCE THE SEC Declared That Certain StableCoins Are Not Securities, That Removes A Major Legal Risk For Banks, Finech Firms, and Payment Processor Who Want to Integrate StableCoins Into Financial Services, as a result, this Should Financial Institutions, and It Clears The Path for Bank-Backed StableCoins or StableCoin-As-A-Service Offering in the World of Banking and Economy.
DOJ DISBANDS CRYPTO ENFORCEMENT TEAM
SEC was not the only authority this week that made a decision related to Crypto. Department of Justice (DOJ) announced It would dissolve the National Cryptocurrency Enforcement Team – a unit that previously devoted itself to investigating and prosecuting crypto -related crimes.
The news came through a Memo from Deputy National Attorney Todd Blanche, who abandonedThe “The Ministry of Justice is not a digital asset rules. But the previous administration used the Ministry of Justice to conduct a reckless strategy for regulation through prosecution.”
DOJ says this change was made to comply with President Donald Trump’s executive order for digital assets, which emphasizes to create clear regulations for crypto and stablecoins. Although it is unclear how to turn off this unit helps to follow that order, it clarifies what DOJ will not do: regulate crypto markets.
Instead, DOJ says that it will now prioritize prosecution individuals who use digital assets in connection with real criminal activities such as terrorism, drugs, human trafficking, organized crime and cyber crime. This signals a transition from targeting crypto companies just to work in the United States and against defeating actual bad actors who use digital assets to commit real crimes.
This seems like another indication that this administration is the word to be ”Pro-Crypto. “One by one, the Trump administration removes obstacles that made it difficult for crypto companies to work in the United States, although these measures are undoubtedly positive for the industry, they are still leaving the industry with an unanswered issue.
This ambiguity may not be a big deal right now, especially during a friendly administration, but it may be a question in the future. When the next crypto conflict inevitably occurs, will know who is actually responsible when it is time to investigate and prosecute the illegal players.
Micro Strategy $ 5.9 billion BTC loss
Strategy (Nasdaq: mstr) (former micro strategy) potted Its form 8-K with Sec this week, and although these applications are routine for public companies, this blockchain and crypto enthusiasts were talking, especially because of what the archive revealed about the economic health of the micro strategy in relation to its huge BTC possession.
Three points from archiving assignments:
(1) Strategy reported an unrealized loss of $ 5.91 billion on its digital asset holdings for the quarter, which ended on March 31, 2025. As a result, they expect to publish a net loss for that quarter.
(2) Due to previous net losses, mainly from the reduction of digital asset, the company warned that it “may not be able to regain profitability during future periods.”
(3) And this one really made people talk: the company said it can be forced to sell BTC to fulfill its financial obligations.
Form 8-KS requires companies to spell out all possible risks, so this is not necessarily an emergency. But what got my attention was how clear they were about how to keep BTC actually hurt them and how it can continue to hurt them. The company acknowledged everything except that it is Bitcoin strategyThe cornerstone of its brand, perhaps what makes the company come loose.
Archiving made it clear that the economic health of the strategy is deeply bound to BTC’s performance. If the digital asset performs poorly or regulatory changes, the company may have serious consequences, not only in the share price but in its ability to raise capital or continue to function.
This is also the first time I remember the company that mentioned the potential sale of BTC. People often cheer when publicly traded companies buy BTC, but what gets lost in the noise is that these companies always have a starting plan. No one keeps BTC for eternity. Whether it is sold when prices hit a goal or relief during an economic crack which strategy thinks of, there is always a point when the company will receive payment.
The fact that Strategy Opens openly that BTC has become a financial responsibility and that it may have to sell raises big questions about how other companies will approach you digital assets that are moving forward. Especially if the information begins to show that Bitcoin may not be the blessing that people thought it was.
Look at tomorrow’s: Diving in the effects of technology when it comes to shaping the future
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