Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
SEC Releases Proposed Rules Modernizing the Transfer Agent Regulatory Framework
On September 1, the Securities and Exchange Commission (SEC) released new proposed rules that aim to modernize the regulatory framework for transfer agents. The proposed rules include updates to definitions, operational and compliance requirements, and additional disclosures when registering as a transfer agent and filing annual reports. The proposed rules also introduce two new rules which would require transfer agents to adopt and implement written policies and procedures and gatekeep restrictive legends for restricted securities. The proposal adopts a technology-neutral posture designed to permit, but regulate and monitor, transfer agents that elect to incorporate emerging technologies like blockchain technology with transfer agent functions. See the press release here and the proposed rules here.
Wyoming Stable Token Commission Adds Onchain Proof-of-Reserve Controls for FRNT
On September 2, the Wyoming Stable Token Commission (WSTC) announced that Wyoming has adopted Chainlink’s Proof of Reserve for the state-issued Frontier Stable Token (FRNT), adding automated, near-real-time onchain verification of reserve data to the WSTC’s existing reserve-transparency framework. FRNT is backed by U.S. dollars and short-term U.S. Treasuries and represents an important state-level test case for public-sector stablecoin issuance, reserve controls, and interoperability infrastructure. According to the WSTC, The Network Firm will examine FRNT reserve assets and token-supply balances under AICPA standards, while Chainlink’s Proof of Reserve will verify onchain reserve information in near real-time. The WSTC further stated that it will implement Chainlink’s Secure Mint feature designed to programmatically verify reserves equal to or in excess of the total supply of FRNT before new tokens can be minted. The WSTC, which already publishes daily attestations, characterized the arrangement as exceeding the federal stablecoin-transparency baseline under the GENIUS Act. See the press release here.
SEC Announces Agenda and Panelists for 24-Hour Trading Roundtable
On September 1, the SEC announced the agenda and the panelists for the September 17 roundtable for 24-hour trading. Topics for discussion include preparations for the launch of 24-hour trading with a focus on exchange and broker-dealer readiness, overnight surveillance, closing price processes, clearance and settlement changes, and investor protection practices. The panel is expected to also cover what remaining regulatory gaps need to be addressed before 24-hour trading is launched. The panel will also discuss operational resiliency, including an overview of systems, capacity, market data, cybersecurity, and staffing operations. The roundtable will close with a discussion on the expected impacts of 24-hour trading with respect to liquidity and capital formation and how market participation may evolve over time. See the press release and the agenda items listed here.
US Treasury Releases G20 Chair’s Statement Including Statements on the Importance of Digital Assets and Stablecoins Regulatory Clarity
On September 1, the U.S. Treasury released the Chair’s Statement, following the G20 Finance Ministers and Central Bank Governors meeting held August 31 through September 1 in Asheville, North Carolina, which expressly identifies digital assets as a priority for the U.S. G20 presidency. G20 members recognized the potential for digital assets to contribute to economic growth and committed to advancing regulatory and supervisory frameworks that preserve financial stability while providing clear pathways for responsible innovation. The statement also anticipates Financial Stability Board work regarding the cross-border implications of global stablecoin arrangements and stablecoin data availability and calls for effective implementation of FATF’s virtual-asset standards, particularly in jurisdictions with significant virtual-asset activity. The statement is nonbinding but provides an important indication of emerging international priorities concerning stablecoins, digital-asset regulation and AML/CFT coordination. See the press release here.
Singapore’s MAS Proposes Amendments to Rules Regarding Stablecoins
On September 1, the Monetary Authority of Singapore (MAS) published a consultation paper on the proposed amendments to the Payment Services Act 2019, which, if adopted, will set forth requirements and limitations with respect to stablecoins and issuers. The proposed amendments would establish a licensing regime under which only MAS-licensed issuers may label their products as “MAS-regulated stablecoins,” while nonregulated stablecoins would be treated as digital payment tokens subject to existing consumer protection rules. Key new measures include a prohibition on paying interest on MAS-regulated stablecoins; requirements for issuers to conduct quarterly stress testing and maintain recovery and orderly wind-down plans; a mandate for technical capabilities to trace, freeze, and burn stablecoins linked to illicit activity; and enhanced consumer safeguarding obligations. Additionally, MAS proposes to permit multijurisdictional issuance of MAS-regulated stablecoins subject to strict safeguards around reserve asset bifurcation and regulatory equivalence and to establish a recognition pathway for well-regulated foreign-issued stablecoins. See the consultation paper here.
