- Crypto continues to be monitored by the SEC and FINRA, with enforcement leaders confirming this on Monday.
- Market participants are calling on a Texas federal judge to assert that the government’s sanctions on Tornado Cash were unlawful.
- The Real World Assets (RWA) sector has surpassed $10.6 billion in total value of assets locked on-chain, achieving a new all-time high.
Cryptocurrency remains subject to the oversight of U.S. financial regulators, including the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA), as reported on Monday.
The U.S. Department of the Treasury recently reassessed its legal and policy matters, leading to the removal of economic sanctions against Tornado Cash, according to its official site. However, challengers are urging a federal judge in Texas to rule that the government’s original actions were “unlawful,” despite the case now being mostly irrelevant.
A significant area of cryptocurrency tokens, Real World Assets (RWA), reached a total value of locked assets (TVL) of $10.679 billion on Tuesday, setting a new record.
U.S. regulators remain vigilant over crypto, despite some legal actions being withdrawn
As reported, while the SEC has withdrawn investigations and lawsuits against various crypto exchanges and related entities, it still maintains a supervisory role in the space. On Monday, leaders from both SEC and FINRA reaffirmed their regulatory oversight of the crypto sector, even as they step back from some cases and probes.
Importance of this oversight
The SEC has softened its previously heavy-handed “regulation by enforcement” stance, dropping several investigations, including those related to Tornado Cash, Coinbase, and more during the previous administration. However, a recent regulatory oversight report indicates that FINRA continues to monitor risks associated with third-party vendors in crypto and extended-hours trading, which is increasingly prevalent in the market.
Looking ahead
Recent cybersecurity incidents, such as the Lazarus Group’s $1.5 billion exploit on Bybit, have created a sense of fear and uncertainty among traders. Nonetheless, the oversight from SEC and FINRA could play a crucial role in shaping future policies and regulations in this evolving sector.
Challengers seek declaration of Tornado Cash sanctions as ‘unlawful’
The group opposing the U.S. Department of Justice’s sanctions against Tornado Cash is advocating for a Texas federal judge to deem the sanctions “unlawful.” Despite the Justice Department indicating that the case is moot due to the sanctions being lifted, the dispute persists.
Relevance of this challenge
If the Justice Department’s actions are found to be unlawful, it could face legal challenges and potential penalties in court. Additionally, the court may issue directives to prevent similar “unlawful” actions from occurring in the future if the challengers can establish their claims.
Potential outcomes
In a statement regarding this matter, the Treasury emphasized:
“We remain substantially concerned about the extensive state-sponsored hacking and money laundering operations aimed at seizing, obtaining, and employing digital assets for the Democratic People’s Republic of Korea and its regime.
The U.S. Treasury will continue to closely monitor any transactions that may benefit malicious cyber operatives or the DPRK, and individuals in the U.S. should exercise caution before engaging in any transactions that might involve such risks.”
RWA TVL reaches record high above $10.6 billion
The RWA sector is transforming traditional assets, such as real estate and investments, into digital assets through the process of tokenization, gaining traction with major asset management firms like BlackRock and Fidelity.
Significance of this milestone
RWA TVL exceeded $10.679 billion as reported on Tuesday, March 25, according to data from DeFiLlama. TVL indicates the total value of assets secured within the blockchain, and an increase in TVL generally reflects greater confidence among market participants.
Future expectations
Fidelity has recently submitted a tokenization proposal for U.S. Treasury assets on the Ethereum blockchain to the SEC. Should the regulator approve this, it could lead to the tokenization of more financial investments and products on the blockchain, enhancing adoption and further increasing TVL in the sector.