President Trump Signs Executive Orders To Stop Debanking, Allow Crypto in 401(k)s, and SEC Clarifies Stance on Staking Tokens

Takeaways

• President Donald Trump signed a pair of executive orders Thursday boosting the crypto industry: One order directed the Department of Labor to ease restrictions on 401(k)s owning certain alternative assets, including crypto. Another order directed regulators to probe banks for unlawful customer exclusions and impose fines on financial institutions for political debanking after years of targeting the crypto sector.
• The SEC confirmed that under specific conditions, liquid staking tokens and related activities do not constitute securities: This guidance has been lauded as a major win for DeFi and paves the way for institutional products using staking receipt tokens.
• Metaplanet added an additional 463 BTC, bringing its total to 17,595 coins valued at roughly $1.78 billion: The company shared plans to fund further acquisitions via perpetual preferred share issuances, in order to continuously grow its bitcoin-per-share ratio.
• The UK opened the crypto ETN market to retail investors, beginning in October: Exchange-traded notes listed on FCA-approved UK exchanges will still be subject to financial promotion and Consumer Duty requirements.

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President Trump Signs Executive Order Allowing Crypto In 401(k)s, Curb Debanking

The first order directed the Department of Labor to ease restrictions on 401(k)s owning certain alternative assets, including crypto, private equity, and real estate. The move is a massive win for all three asset classes because it allows them to become intertwined with US retirement accounts, which currently total around $12.5 trillion. The price of bitcoin jumped Thursday when the news leaked, pushing back above $116,000 after a week of ETF outflows.

The other order aims at preventing banks from severing relationships with businesses and individuals for political or ideological reasons, including stances on crypto. Under the directive, regulators can investigate whether financial institutions violated relevant laws when closing customer accounts.

The order will also instruct agencies to identify and remove internal policies that contributed to a previous trend of debanking. “Debanking” is a term used to refer to financial firms severing ties with services to perceived high-risk sectors, which has been a key hurdle for the crypto industry to overcome.

SEC Clarifies Liquid Staking Position in Major Boon for DeFi

In doing so, the SEC has signaled these tokens will not need to undergo securities registration under the checks involved in the Howey test.

The DeFi industry has hailed the announcement as a positive signal for the space, as it could allow for expanded institutional participation. Lucas Bruder, CEO of Jito Labs, a popular issuer of liquid staking tokens, said the guidance showcases the SEC Crypto Task Force's nuanced understanding of the issue.

Despite the clarification, Commissioner Caroline Crenshaw made clear her concerns with the guidance and issued a warning that it may leave gaps in regulatory oversight. However, with the clarification coming from the SEC itself, it's likely that DeFi platforms will now be able to expand their offerings and launch new services as a result of a more positive regulatory stance.

Metaplanet Purchases Additional $54 Million in BTC

With this acquisition, the firm’s holdings have jumped to 17,595 BTC, meaning Metaplanet controls the second-largest bitcoin treasury among Asia-listed companies. The purchase comes after the company filed to raise up to roughly $3.7 billion through a new perpetual preferred share offering for ongoing bitcoin accumulation.

Metaplanet leadership said their plan is to use using capital markets tools to enhance bitcoin per share. However, BTC price increases over the past year have been beneficial to the company’s balance sheet. Despite Metaplanet’s bitcoin stack not yet at the same level of larger accumulators like Strategy, the firm has consistently added to its treasury and continues to be a pioneer of the corporate bitcoin treasury space.

UK Opens Crypto ETN Market to Retail Investors Starting in October

Eligible cETNs must be listed on UK exchanges sanctioned by the FCA and comply with existing financial promotion rules designed to prevent misleading marketing and harmful incentives.

Issuers will also need to adhere to the FCA’s Consumer Duty framework, which requires financial firms to act to avoid foreseeable harm to their customers. Despite these safeguards, cETN investments will likely not be covered by the Financial Services Compensation Scheme. The policy shift however is a positive step towards maturation of the crypto space in the UK and will allow investors in the region to invest in crypto-related bonds in a regulated environment.

-Team Gemini