The new “Digital Asset Market Structure Discussion Draft” introduced by House Republicans on May 5 could work to reduce the dominance of large crypto firms and promote more participation in the broader market, according to an executive from Paradigm. 

The discussion draft, led by the House agricultural and financial services committee chairs Glenn Thompson and French Hill, is an “incremental, albeit meaningful, rewrite” of the Financial Innovation and Technology for the 21st Century Act (FIT21), Paradigm’s vice president of regulatory affairs Justin Slaughter said in a May 5 X post.

One-pager of the digital asset market structure discussion draft submitted by House Republicans on May 5. Source: US House Agriculture Committee

One of the major changes from FIT21 is that the draft defines an affiliated person as anyone who owns more than 1% of a digital commodity issued by the project — down from 5% in the FIT21 bill — a move Slaughter said may curb the influence of big crypto firms and lead to more participation in the crypto market.

“This is a portent of the entire bill. There are often criticisms of crypto being too dominated by a few large firms. This bill makes clear the regulatory regime proposed is going to push against that fact and strongly encourage more small-d ‘democratization’ of the space.”

The draft also defines a “mature blockchain system” as one that, together with its related digital commodity, is not under the “common control” of any person or group.

Source: Justin Slaughter

The Securities and Exchange Commission would be the main authority regulating activity on crypto networks until they become sufficiently decentralized, Slaughter noted.

The draft also clarified that decentralized finance trading protocols are those that enable users to engage in a financial transaction in a “self-directed manner.” Protocols that meet this criterion are exempt from registering as digital commodity brokers or dealers.

The draft also referred to digital commodities as “investment contract assets” to distinguish their treatment from stocks and other traditional assets under the Howey test.

According to Slaughter’s analysis, securities laws won’t be triggered unless the secondary sale of tokens also transfers ownership or profit in the underlying business.

Crypto firms would also have a path to raise funds under the SEC’s oversight while also having a “clear process” to register their digital commodities with the Commodity Futures Trading Commission, the committee members said in a separate May 5 statement.

Joint rulemaking, procedures, or guidelines related to crypto asset delisting must be established by the CFTC and SEC should a registered asset no longer comply with rules laid out by the regulators.

A ‘clear opportunity’ to advance crypto innovation, rules once and for all

Speaking about the need for a comprehensive crypto regulatory framework, the House committee members said crypto is a “clear opportunity” to advance innovation in the US — most notably through modernizing America’s financial infrastructure and reinforcing US dollar dominance.

The Republicans criticized the previous Biden administration and the Gary Gensler-led SEC for adopting a regulation-by-enforcement strategy rather than creating clear rules for market participants.

Related: VanEck files for BNB ETF, first in US

Many crypto firms were stuck in “legal limbo” as a result of the unclear rules, which pushed some industry players overseas, where clearer rules exist, the House committee members said.

“America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime,” said Dusty Johnson, chairman of the subcommittee on commodity markets, digital assets and rural development.

Slaughter added: “This is the bill that will, finally, provide a clear regulatory regime on crypto that many have been calling for.”

Republicans already facing roadblocks over discussion draft

House Financial Services Committee Ranking Member Maxine Waters plans to block a Republican-led event discussing digital assets on May 6, a Democratic staffer told Cointelegraph.

The hearing, “American Innovation and the Future of Digital Assets,” is expected to discuss the new crypto markets draft discussion paper pitched by Thompson, Hill, and other committee members.

However, according to the unnamed Democratic staffer, the current rules require all members of the House Financial Services Committee to agree on such hearings.

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight

The Tron network has drawn closer to regaining the lead from Ethereum in Tether circulation after another big mint by the US stablecoin issuer.

On May 5, Tether minted another $1 billion Tether (USDT) on the Tron network, according to Arkham Intelligence. This brings the total USDT on Tron to $71.4 billion, according to the Tether Transparency report. 

In comparison, there is currently $72.8 billion USDT circulating on the Ethereum network, so just $1.4 billion more USDT on Tron will see it become the leading network for the world’s largest stablecoin issuer, as it has been previously over the last two years. 

Tron was ahead of Ethereum for USDT circulation between July 2022 and November 2024, but a large $18 billion mint on Ethereum pushed the network ahead again, according to CryptoQuant. 

The third-largest network for USDT is Solana, which has $1.9 billion circulating, and there are smaller amounts on Ton, Avalanche, Aptos, Near, Celo and Cosmos. 

USDT circulation on Ethereum and Tron. Source: CryptoQuant

Tether’s total circulation is currently at a record high of $149.4 billion USDT, having increased by 8.6% since the beginning of this year. This gives the firm a commanding stablecoin market share of 61%, according to CoinGecko. 

Related: Tether AI platform to support Bitcoin and USDT payments, CEO says

Its closest competitor, Circle, has a market share of 25% with almost $62 billion USDC (USDC) in circulation.

Stablecoin issuance has surged over the past six months, and they currently represent 8% of the total crypto market capitalization.

In a report in late April, the United States Treasury Department predicted that the stablecoin market could reach $2 trillion by 2028 if regulatory clarity is achieved. 

Stablecoin legislation nearing next vote 

It is widely believed that two key pieces of legislation need to be passed into law in the US to cement the position of stablecoins. 

The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act sets out clear definitions for “payment stablecoins” and reserve rules for stablecoin issuers.

Lawmakers in the US Senate will move forward with a vote on the GENIUS stablecoin bill before May 26, according to reports. 

Meanwhile, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, which governs the approval and supervision of “federally qualified nonbank payment stablecoin issuers,” is also going through Congress. 

Tether is also planning to launch a US-based stablecoin later this year, with timing dependent on the passing of legislation.  

Magazine: Bitcoin to $1M ‘by 2029,’ CIA tips its hat to Bitcoin: Hodler’s Digest

A hacker who took over the Tron DAO X account is estimated to have made around $45,000 in improperly solicited funds, according to a spokesperson from Tron. 

Speaking to Cointelegraph, the Tron public relations team confirmed that on May 2, the Tron DAO account posted a contract address and sent direct messages to solicit payments in exchange for promotional advertising on the Tron account.

“Our security team quickly identified the intrusion and cut off access to the hacker, but we ask the community to continue to be vigilant. We will never ask anyone for payments like this via DM or otherwise,” they said. 

The team said that based on the illicit contract address the hacker posted, the amount improperly solicited appeared to be around $45,000. 

Asked whether the same hacker could be responsible for the supposed New York Post’s X account hack on May 3, the Tron team told Cointelegraph that there “appear to be some similarities” between the two security incidents; however, they also cautioned that the investigation is ongoing and “any definitive connection would be premature.” 

After regaining access, Tron DAO said in a May 2 X update that they suspect the hack resulted from a team member being “targeted in a malicious social engineering attack, which led to their account being compromised.”

Source: Tron DAO

“Even after the perpetrator was logged out and our access restored, they continued contacting others, offering posts from our main account in exchange for payment,” Tron DAO said.

The Tron team is still investigating and says they are in contact with law enforcement. Tron founder Justin Sun also accused crypto exchange OKX of failing to act on a law enforcement request to freeze stolen funds connected to the attack.

OKX founder and CEO Star Xu has publicly denied the allegation, and Sun has removed the original post with the accusation.  

Curve Finance joins list of X account hacks 

Decentralized lending protocol Curve Finance also recently suffered an X account takeover by a bad actor, adding to the growing list of high-profile firms and individuals “silently” accessed by social media hackers. 

In a now-deleted May 5 X post, a scammer posing as Curve Finance shared a link to a CRV airdrop with a weeklong registration period, which some eagle-eyed X users quickly suspected could be fraudulent.

Curve Finance founder Michael Egorov confirmed in a reply to analyst CrediBULL Crypto that it was a bad actor posting sham links so far, “No other account appears to be hacked — the control over X account was just silently taken by someone.”

Source: CrediBULL Crypto

The Curve Finance team has since regained access with the help of a team that included the cybersecurity group SEAL, and found that aside from posting scam links, the hacker also blocked some users who flagged the account takeover, including CrediBULL Crypto.

The cause of the hack has yet to be shared publicly, but in response to a user’s query, the Curve finance team said it’s still “unclear how account” access was taken, and there was “No sign of any client-side compromise.”

Source: Curve Finance

Other high-profile X account hacks

A slew of other high-profile X accounts have also been taken over by bad actors this year. On April 15, a member of the UK’s Parliament, Lucy Powell, had her account taken over to promote a scam crypto token called the House of Commons Coin (HOC).

Crypto data aggregator Kaito AI and its founder, Yu Hu, were the victims of an X social media hack on March 15, when scammers posted that the Kaito wallets were compromised and users’ funds were at risk.

Related: Breaking Bad star’s X account hacked for memecoin scheme

Meanwhile, Pump.fun’s X account was also hacked on Feb. 26 and promoted several fake tokens, including a fraudulent governance token for the platform called Pump.

Magazine: Bitcoin to $1M ‘by 2029,’ CIA tips its hat to Bitcoin: Hodler’s Digest, April 27 – May 3