In May 2025, three major regulatory updates emerged that every fund manager and financial professional needs to know. These changes could directly impact compliance strategies and risk management in the months ahead.
1. SEC Plans Major Crypto Regulation Overhaul
The Securities and Exchange Commission (SEC) is preparing to overhaul how it regulates crypto tokens. Under the leadership of new SEC Chair Paul Atkins, the agency is working to create clearer rules for digital assets. This move is expected to define which tokens are considered securities and outline how they can be lawfully issued, traded, and held in custody.
For hedge funds and crypto asset managers, this could mean significant changes to compliance requirements. Registered broker-dealers with an Alternative Trading System (ATS) may soon be allowed to handle trading of widely used tokens like Bitcoin and Ethereum. This shift aligns with the growing push for regulatory clarity in the crypto space, especially as digital assets continue to gain mainstream adoption.
Fund managers should start evaluating how these changes might impact their portfolios, risk controls, and reporting obligations. Staying ahead of evolving crypto rules can help avoid penalties and ensure smooth operations.
2. The GENIUS Act and Stablecoin Oversight
U.S. Senate passed the bipartisan GENIUS Act, marking a pivotal step toward federal regulation of stablecoins—cryptocurrencies pegged to assets like the U.S. dollar. This legislation aims to establish a clear framework for issuing and managing stablecoins, focusing on consumer protection and financial stability.
Key Provisions:
- Licensing Requirements: Stablecoin issuers must obtain federal licenses, ensuring they meet stringent operational standards.
- Reserve Mandates: Issuers are required to maintain 100% reserves in U.S. dollars or equivalent liquid assets, safeguarding against potential insolvency.
- Transparency Measures: Mandatory monthly disclosures of reserve compositions and annual audits for issuers with significant market capitalization.
- Marketing Restrictions: Prohibits misleading claims about government backing or insurance of stablecoins, protecting consumers from false assurances.
3. CFTC Faces Complete Leadership Turnover
In a surprising development, all four current commissioners of the Commodity Futures Trading Commission (CFTC) have announced plans to step down. This leaves the agency facing the possibility of operating with just one commissioner at a time when it has increasing oversight over derivatives and crypto markets.
For FCMs, introducing brokers, and hedge funds active in futures and swaps markets, this leadership gap could slow down key regulatory decisions and guidance. It may also create uncertainty in how the CFTC enforces existing rules and interprets new market developments.
Market participants should stay alert for updates from the CFTC and be ready to adjust compliance strategies as new commissioners are appointed. Clear internal communication and proactive monitoring of CFTC advisories will be essential during this transition period.
Stay Informed and Stay Compliant
As the regulatory landscape shifts, staying informed is crucial. Our team is here to help you navigate these changes, ensure compliance, and minimize risk.
If you’d like a deeper dive into how these updates may impact your business, reach out today.
SEC: New Rules for Crypto Tokens