Regulatory Roundup #8

Weekly Summary

Politics continue to set the tone as CZ’s pardon reset the narrative. ESMA’s latest MiCA Q&A puts trading platforms on the hook to backfill white papers by 31 December 2027, while the FCA sued HTX and HMRC’s IFISA-only stance slowed retail crypto ETNs. In the U.S., the White House nominated Mike Selig to chair the CFTC; markets kept moving with first SOL ETF listings in the U.S., and ASIC further clarified which Aussie products need a license ahead of the Digital Asset Platform regulations.

🔦 Spotlight

CZ does it: politics, policy, and the limits of “crypto-friendly”

President Trump granted a full and unconditional pardon to Binance founder Changpeng “CZ” Zhao on 23 October. The White House framed it as drawing a line under the “war on crypto”. Zhao pleaded guilty in 2023 to failing to maintain an effective anti-money-laundering program, paid a $50 million criminal fine, and served four months in federal prison in 2024. The pardon scrubs the federal conviction. It does not rewrite history.

Zhao’s plea sat alongside Binance’s $4.3 billion settlement with U.S. authorities for AML and sanctions failures, which installed monitors and forced a wholesale rebuild of controls. He resigned as CEO but kept a large equity stake. A pardon may soften certain fitness and propriety hurdles in some jurisdictions and restore room for public leadership, yet supervisory obligations and monitorship reporting are still very much alive.

The optics arrived pre-baked. The decision follows months of chatter about clemency and family business ties to crypto. The White House said Biden-era prosecutors waged a crackdown; Zhao thanked the President on X and promised to help make America the “Capital of Crypto”. News of his application had been reported earlier in the year, and the pardon caps a run of crypto-related clemency decisions that play well with a base keen to bury the 2020–24 enforcement cycle.

Parts of Capitol Hill have concerns. In May, senior senators pressed the DOJ and the White House over reports that Trump family representatives explored a stake in Binance’s U.S. arm while World Liberty Financial launched its USD1 stablecoin and while an Abu Dhabi investor, MGX, used USD1 in a $2 billion deal tied to Binance. The letter asks for timelines, communications and any analysis done on conflicts of interest. In short, who spoke to whom, when, and about what.

By the time the pardon landed, Senators Warren and Schiff had a condemnation resolution ready. It recites the facts of Zhao’s plea and sentence, Binance’s penalty, the reported family-Binance talks, the USD1-MGX transaction, and then denounces the clemency as corrosive to the rule of law.

Warren had already led the May oversight letter pressing the DOJ and the White House on possible conflicts around the pardon bid. The resolution’s thrust is simple: Congress should tighten the guardrails on clemency when financial-crime cases intersect with presidential business interests.

Legally, the signature clears a federal criminal record; it does not extinguish regulatory supervision. On 29 May 2025, the SEC and the defendants filed a joint stipulation to dismiss, with prejudice, the Commission’s civil enforcement action against Binance, its U.S. affiliates, and Zhao. That closes the SEC case in federal court. Separately, the DOJ is now weighing whether to relax or end the court‑appointed compliance monitor imposed under the 2023 plea deal, per Bloomberg reporting. A parallel FinCEN monitor looks set to remain in place for now. 

With the SEC litigation closed, attention shifts to whether DOJ lifts the monitor early and what enhanced reporting might replace it. The KYC and AML control rebuilds, plus any state‑level licensing reviews, will do more to shape Binance’s U.S. footprint than political rhetoric. Private suits may continue, and the SEC noted that its dismissal does not necessarily reflect the Commission’s position on other proceedings. In practical terms, counterparties will watch for a formal DOJ decision or amended filings, and the standing FinCEN monitor remains part of the risk calculation.

🌎 Global Developments 

🇺🇸 United States 

CFTC leadership: Trump nominates Mike Selig 

The White House has tapped Michael “Mike” Selig, currently chief counsel to the SEC’s Crypto Task Force and a former Willkie Farr & Gallagher partner, to chair the CFTC, pending Senate confirmation. The move signals a push to put the CFTC at the center of U.S. crypto oversight as Congress hammers out market‑structure legislation, with confirmation likely to probe jurisdictional lines, market integrity and coordination with the SEC.

SEC and CFTC target year-end crypto milestones despite shutdown

Acting CFTC Chair Caroline Pham said the agency is aiming to enable listed spot crypto trading and formalize the use of tokenized collateral by year end. SEC Chair Paul Atkins likewise flagged a year-end push on crypto initiatives, even as the federal shutdown slows staff work and rulemaking cadence.

If delivered despite the shutdown, exchanges and FCMs will still need clarity on custody segregation, market surveillance, listing standards, and how margin models should treat tokenized collateral. 

Bitwise lists Solana staking ETF on NYSE Arca 

Bitwise’s BSOL fund holds SOL directly and stakes on chain, reinvesting rewards into NAV. It lists with a 0.20% fee and an initial waiver period, with Helius operating the staking and assets held in cold storage; trading began on 28 October. 

Staking inside the wrapper lets the vehicle capture protocol rewards, which can narrow tracking drift versus a true total-return SOL index. It also brings validator selection, slashing risk, and reward distribution policy into the disclosure set, giving regulators and counterparties a live test of staking inside a listed product. For market structure, a staking-enabled ETF can pull SOL off exchange, tighten lendable supply, and give a cleaner route to yield-bearing exposure.

🇪🇺 European Union

🕵 ESMA MiCA Q&A Update: QA 2654

ESMA’s new Q&A 2654 of 14 October clarifies that for Title II crypto-assets admitted to trading before 30 December 2024, offerors and persons seeking admission only need to comply with marketing rules - there is no white paper obligation. Trading platform operators must ensure by 31 December 2027 that a MiCA-compliant white paper is drawn up, notified and published, and must publish hyperlinks to any existing registered white papers. Other CASPs only need to link to existing white papers and have no duty to produce one. Practically, legacy tokens without a listing on a trading platform may still lack a white paper even after 2027, making platforms the choke point for backfilling disclosure.

🇪🇺 MiCA Authorizations Update (per ESMA CASP Register)

• 🇩🇪 DonauCapital Wertpapier GmbH - 27/10/2025
• 🇫🇷 RELAI - 23/10/2025
• 🇫🇷 SOCIETE GENERALE - FORGE - 23/10/2025
• 🇫🇷 BANQUE DELUBAC - 23/10/2025
• 🇩🇪 Lang & Schwarz TradeCenter AG & Co. KG - 22/10/2025
• 🇨🇾 Revolut - 20/10/2025
• 🇦🇹 Cryptonow - 15/10/2025
• 🇨🇾 Tradu - 14/10/2025
• 🇨🇾 TEROXX DIGITAL ASSET LTD - 13/10/2025
• 🇮🇪 Legend Trading - 10/10/2025
• 🇳🇱 EU Internet Ventures |EUIV|BNXA - 08/10/2025

🇬🇧 United Kingdom

FCA sues HTX in London High Court over unlawful promotions

The FCA has filed civil proceedings in London’s High Court against HTX (formerly Huobi), alleging unlawful crypto promotions to UK consumers in breach of the financial promotions regime. The claim, lodged on 22 October 2025, names Huobi Global and four “persons unknown” tied to marketing. HTX, linked to Justin Sun, is not authorized in the UK and appears on the FCA warning list.

At issue are UK facing ads and communications made without approval under section 21 of the Financial Services and Markets Act and the 2023 crypto promotions rules. The case also probes the FCA’s ability to secure injunctive relief and takedowns against offshore platforms, and to pursue liability for affiliates and social channels that direct UK users.

Retail crypto ETNs: HMRC’s wrapper choice slows the rollout 

The FCA opened the door to retail access for crypto ETNs from 8 October, but HMRC’s policy tweak means the products sit in an awkward wrapper. They can live inside a Stocks and Shares ISA for the rest of this tax year and in SIPPs, but from 6 April 2026 they will count only as Innovative Finance ISA investments, a niche account most platforms do not offer.

That classification creates two frictions. First, investors who buy crypto ETNs inside a Stocks and Shares ISA now may face an administrative shuffle next year, or worse, become forced sellers, if their platform does not support an IFISA. Second, several mainstream brokers are moving cautiously on launches while they work through the IFISA plumbing and Consumer Duty issues, which is why the London listings have not yet translated into broad retail availability.

Practically, anyone keen on the tax shelter has three options: wait for their broker to add IFISA support, transfer to a platform that already offers an IFISA, or hold the ETNs outside the ISA wrapper and accept the tax hit. None are especially elegant, and the policy choice puts the pace of adoption in the hands of platform operations rather than market demand.

🇮🇳 India

WazirX ruling

The Madras High Court has barred WazirX from redistributing a user’s 3,532 XRP under its post-hack restructuring, while affirming that crypto qualifies as property that can be owned, enjoyed and held in trust. The petition targets Zanmai Labs, WazirX’s operator, after the 2024 hack left a shortfall between user liabilities and available tokens. The case sits alongside the Singapore court-approved scheme for WazirX’s parent, Zettai.

The judge ordered a bank guarantee of roughly $11,800 while the dispute proceeds to arbitration and asserted jurisdiction despite the Singapore process. Practically, the ruling curbs the “socializing” of losses by dipping into unaffected user balances, and nudges exchanges toward clearer client-asset trust arrangements and ring-fencing when recovery plans collide with property rights.

🇦🇺 Australia

Incremental progress

The Australian Securities and Investments Commission (ASIC) has clarified which crypto-related products require licensing under existing financial services law, drawing a sharper line between exchange-traded and custody-style offerings. The guidance confirms that any product providing exposure to crypto assets through pooled client funds or delegated management falls under the Corporations Act, while direct, self-custodied spot exposure generally does not. ASIC said the move aims to stop “license by stealth” arrangements and to bring consistent oversight to token investment schemes marketed as managed funds.

The update comes amid preparations for the new Digital Asset Platform regime expected in 2026.

🔎 Things to Watch 

• 🇺🇸 US Senate progress/bickering on market structure regulation.
• 🇬🇧 FCA CP25/25 - response deadline for the remaining chapters - 12 November.

Coming into view: 

• OECD Crypto-Asset Reporting Framework (CARF) implementation timeline across EU and G20 nations ahead of 2026 start
• Further FCA consultations on the UK crypto regime

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