Hi! In today’s edition:
🏛️ The CFTC sketches its crypto rulebook, and one big market sits outside it
🔓 FinCEN closes the door on two crypto rules that privacy advocates fought for years
📈 Strategy's bitcoin books look very different from how they looked in June
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The CFTC Opens Comment on First Crypto Rules
The Commodity Futures Trading Commission on Monday opened comment on its first crypto rules, Regulation CTX and Regulation CAM. They cover retail crypto trades done on a margined, leveraged or financed basis. The proposals don't reach ordinary spot trading of bitcoin and ether. The public gets 60 days to weigh in once the notice appears in the Federal Register.
New entrants could register as a full designated contract market or as a narrower crypto asset market. The requirements under consideration include proof-of-reserves for exchanges that pool customer assets, and listing reviews that weigh token concentration and vesting. Chairman Michael Selig called it "a federal option for crypto asset exchanges."
The move follows the Clarity Act stalling in the Senate on Sept. 15. In a Wall Street Journal op-ed, Selig wrote that the agency can't force crypto trading onto CFTC platforms without Congress, but "we must do what we can."
FinCEN Drops Its Crypto Mixer and Wallet Rules
FinCEN is withdrawing two proposed rules that would have made banks and other financial institutions, including crypto exchanges, collect and report more data on transactions tied to crypto mixers and self-custodied wallets. The Treasury bureau filed both notices Monday, and they're set to publish in the Federal Register today.
The 2023 mixer proposal would have required reports on mixing-linked transactions involving a foreign jurisdiction, down to wallet and IP addresses. The December 2020 unhosted wallet proposal targeted transactions above $10,000, and Treasury's regulatory agenda had already listed it as withdrawn in 2024. The mixer notice cites a White House crypto report backing lawful users' ability to "privately transact."
Coin Center called the move "a significant victory for financial privacy." FinCEN said criminals still use mixers and that it may take steps against them in the future.
Strategy Eyes a $21 Billion Bitcoin Rebound
Strategy expects to book a $20.91 billion gain on its bitcoin for the third quarter, according to a preliminary estimate in a Form 8-K filed Monday. That reverses a second-quarter loss of $8.32 billion on digital assets. The carrying value of its bitcoin rose to $70.82 billion at Sept. 30, from $49.67 billion at June 30.
With its coins back above cost, Strategy released the valuation allowance it carried at the end of June. That release is worth a tax benefit of about $4.12 billion, which cuts estimated deferred tax expense to $1.88 billion. Auditor KPMG hasn't reviewed the figures.
Strategy also bought 334 BTC for $28.7 million between Oct. 1 and Oct. 4, the smallest of three straight weekly buys, bringing its holdings to 848,000 BTC. It also repurchased $176.3 million of STRC preferred stock at about $99.39 a share.
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⛽ Prysm shipped a last-minute fix so Ethereum validators on the Sepolia testnet automatically move to a 200 million gas limit, up from 60 million, when the Glamsterdam upgrade activates there Tuesday. Without the v7.2.1 update, some validators would have kept producing blocks at the old limit, which would have undercut the capacity test.
🎯 Polymarket unveiled Protocol V2, a rebuild of its smart contracts that moves positions into a single token backed by unified pUSD collateral and adds multi-chain bridging and combinatorial markets. Canary markets run through Oct. 30, and the full switch to V2 markets is set for Nov. 2.
🇯🇵 Metaplanet sold and rebought its bitcoin in the third quarter. It sold 10,000 BTC and bought back 11,000 BTC at a price about 9% higher to show credit rating agencies it can turn its holdings into cash. The company held 44,000 BTC as of Sept. 30 and said it plans to seek its own credit rating.
🟠 Strive bought 2,000 bitcoin for about $169 million last week, bringing its holdings to 29,462 BTC. It also disclosed a buyback facility of up to $500 million for its SATA perpetual preferred stock.
🔷 Tom Lee's Bitmine added 15,112 ETH in the week ending Oct. 4, down from 17,362 ETH the week before. That makes two straight weeks of slower buying. The firm now holds 6.02 million ETH, about 4.9% of supply and roughly 89,000 ETH short of its 5% target.
🏦 Kraken operator Payward partnered with Singapore Gulf Bank to offer institutional clients 24/7 settlement and trade funding through SGB Net, the bank's real-time clearing network. The service launches in U.S. dollars only, for select clients in eligible Asian and Gulf jurisdictions.
💳 Stripe plans to expand its stablecoin card programs to more than 100 countries by the end of the year, building on its Bridge and Privy acquisitions. Spending on stablecoin cards has reached about $1.2 billion a month, roughly triple the level a year ago.
📊 Visa found that 46% of 14,250 Asia Pacific consumers it surveyed are likely to use stablecoins within five years, though only 6% accurately understand how they work.
💰 Umia raised $6.1 million at an $18 million fully diluted valuation in a public token auction on Base. Galaxy, DCG and Draper Associates were among the ten funds that took part, alongside nearly 700 individuals, in backing a platform that helps crypto projects launch and govern tokens.
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