Crypto Rules Heat Up This Summer

Washington’s new tax hearing:
The House Committee on Taxation is holding a public hearing to address how digital currencies should be taxed. While the discussion was cordial, it highlighted significant gaps in current law that must be bridged before any new tax rules can take effect.

CFTC’s draft on prediction markets:
The Commodity Futures Trading Commission released a proposal tightening oversight of prediction markets. The draft defines what constitutes a “game” and which contracts fall under federal jurisdiction, inviting public comments that could shape the final regulation.

Former regulators weigh in:

• Gary Gensler, former SEC Chair and architect of Dodd‑Frank, filed a brief arguing that many prediction market contracts should not be treated as gambling.
• Despite this, the CFTC is pursuing a lawsuit in New Mexico, asserting that sports‑related prediction markets are swaps and should remain outside state gaming laws.

SEC’s stalled innovation exemption:
The Securities and Exchange Commission has delayed its proposal for an innovation exemption. Analysts warn that the eventual structure could have far‑reaching implications for emerging financial technologies.

Crypto founder loses appeal:
A high‑profile crypto entrepreneur lost an appeal of his 2023 fraud conviction. The appellate panel upheld the trial judge’s authority, extinguishing the founder’s hope for a new trial.

These developments underscore that digital‑asset regulation is now a top priority. Lawmakers and regulators must collaborate closely to forge clear, effective rules that serve all stakeholders.