The CFTC moved to propose its first formal cryptocurrency market rules on October 5 after the Senate failed to advance the Clarity Act. Chairman Michael Selig announced a regulatory package comprising Regulation CTX, covering crypto asset transactions, and Regulation CAM, addressing crypto asset markets.
Simultaneously, the SEC’s extensive 682-page crypto custody proposal is headed to the Federal Register. The framework establishes standards for adviser self-custody, state trust company custodians, and new reporting requirements for tokenized funds.
In a notable reversal, FinCEN withdrew two long-pending proposals: the 2023 crypto-mixing rule and the 2020 self-hosted wallet rule, which would have mandated identity verification and reporting for transfers to unhosted wallets, often referenced at a $3,000 threshold.
Internationally, the Bank of Russia opened applications for crypto exchanges and custodians to join official registers. The central bank indicated a 30-working-day review period, with the first licenses potentially issued before year-end.
On the institutional front, ICE and OKX notified the SEC of plans for their 50/50 joint venture, OKXICE, to launch a tokenized-securities venue under the temporary Innovation Exemption. The platform aims to offer 24/7 secondary trading for roughly 64 tokenized U.S. NMS stocks—including NVIDIA, Tesla, and Apple—via permissioned Uniswap v4 pools on X Layer, an Ethereum Layer 2, paired with USDC, USDG, or USDT. Access will be restricted to KYC/KYB-verified, whitelisted participants, with tokens representing one-for-one entitlements to shares held by a broker-dealer.
In protocol developments, Zcash activated the NU7 upgrade on public testnet, reducing target block times from 75 seconds to 25 seconds ahead of a potential mainnet deployment. Meanwhile, Ethereum’s “Glamsterdam” upgrade is scheduled for a testnet launch on October 6, though a mainnet date remains unconfirmed.
Security incidents also marked the period. Digests reported a roughly $6 million loss from a Base vault due to a whitelist exploit, and a NEAR Intents incident involving approximately $3.8 million, where the exploiter subsequently returned funds to wallets designated by the team.
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