KuCoin’s settlement with CFTC in flux after Trump policy shift
A planned settlement between the US Commodity Futures Trading Commission and crypto exchange KuCoin will likely be delayed after a policy shift at the CFTC to deprioritize cases against crypto companies under the Trump administration.
CFTC attorney John Murphy submitted a letter on April 21 to District Judge Valerie Caproni, asking for more time to secure approval for a deal negotiated under the Biden administration, reported Law360.
“It appears unlikely that such authorization will be granted in the near term,” he said, referencing a recent statement by acting CFTC Chair Caroline Pham that the agency’s enforcement division was to deprioritize cases against crypto companies.
The CFTC charged KuCoin with “multiple violations of the Commodity Exchange Act (CEA) and CFTC regulations” in March 2024.
According to the Justice Department, which also filed charges against KuCoin and two founders for violating Anti-Money Laundering laws, the exchange received more than $5 billion and sent more than $4 billion in “suspicious and criminal funds.”
KuCoin, trading under Mek Global Limited, reached a $297 million settlement with the Department of Justice in January and agreed to exit the US market for at least two years.
In December, the CFTC and KuCoin informed the court that they reached an agreement in principle to settle the case, however terms and details of the proposed deal were not disclosed.
In March, KuCoin asked the judge for a 14-day stay to address further negotiations in line with President Trump’s executive order curtailing enforcement actions against the digital asset industry. However, this request was denied, with the judge pressing for negotiation status updates.
No majority at CFTC
When Pham announced in February that the Commission would wind down its practice of regulation by enforcement, she also noted that terminating active cases would be more difficult to deal with.
The CFTC needs a majority to dismiss a case or authorize its settlement, and there is currently no majority, with two members from each party sitting on its governing body.
This could change if the Senate confirms the appointment of Trump nominee Brian Quintenz to lead the financial regulator.
Both parties have requested an additional 60 days or until the Commission provides “definitive direction” on the matter.
Related: US regulators FDIC and CFTC ease crypto restrictions for banks, derivatives
On April 21, the CFTC’s Divisions of Market Oversight issued a request for comment to better inform them on the potential uses, benefits, and risks of perpetual contracts in derivatives markets.
“Innovation and new technology have created a renaissance in markets that presents new opportunities that are accessible to more people, as well as risks,” said Pham.
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The US Office of the Comptroller of the Currency has affirmed that national banks can intermediate cryptocurrency trades as riskless principals without holding the assets on their balance sheets, a move that brings traditional banks a step closer to offering regulated crypto brokerage services.
In an interpretive letter released on Tuesday, the regulator said banks may act as principals in a crypto trade with one customer while simultaneously entering an offsetting trade with another, a structure that mirrors riskless principal activity in traditional markets.
“Several applicants have discussed how conducting riskless principal crypto-asset transactions would benefit their proposed bank’s customers and business, including by offering additional services in a growing market,” notes the document.
According to the OCC, the move would allow customers “to transact crypto-assets through a regulated bank, as compared to non-regulated or less regulated options.”
The letter also reiterates that banks must confirm the legal permissibility of any crypto activity and ensure it aligns with their chartered powers. Institutions are expected to maintain procedures for monitoring operational, compliance and market risks.
“The main risk in riskless principal transactions is counterparty credit risk (in particular, settlement risk),” reads the letter, adding that “managing counterparty credit risk is integral to the business of banking, and banks are experienced in managing this risk.”
The agency’s guidance cites 12 U.S.C. § 24, which permits national banks to conduct riskless principal transactions as part of the “business of banking.” The letter also draws a distinction between crypto assets that qualify as securities, noting that riskless principal transactions involving securities were already clearly permissible under existing law.
The OCC’s interpretive letter — a nonbinding guidance that outlines the agency’s view of which activities national banks may conduct under existing law — was issued a day after the head of the OCC, Jonathan Gould, said crypto firms seeking a federal bank charter should be treated the same as traditional financial institutions.
According to Gould, the banking system has the “capacity to evolve,” and there is “no justification for considering digital assets differently” than traditional banks, which have offered custody services “electronically for decades.”
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From ‘Choke Point 2.0’ to pro-crypto policy
Under the Biden administration, some industry groups and lawmakers accused US regulators of pursuing an “Operation Choke Point 2.0” approach that increased supervisory pressure on banks and firms interacting with crypto.
Since President Trump took office in January after pledging to support the sector, the federal government has moved in the opposite direction, adopting a more permissive posture toward digital asset activity.
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CryptoUK, a UK-based cryptocurrency trade association, has announced that it will join The Digital Chamber, a US crypto policy advocacy group, potentially marking a significant cross-collaboration on digital asset regulation between the two countries.
In a Tuesday notice, CryptoUK said its team would fall under The Digital Chamber’s umbrella as part of a “unified, cross-border advocacy platform.” Both groups have worked in their respective countries to promote policies favoring the cryptocurrency and blockchain industry, starting with The Digital Chamber in 2014 and CryptoUK in 2018.
“CryptoUK has always aspired to ensure we are driven by policy-led issues, member collaboration, and regulatory engagement,” said Su Carpenter, CryptoUK’s executive director.
The partnership between the two advocacy groups comes as US lawmakers move forward on negotiations to pass a digital asset market structure bill, aiming to establish regulatory clarity for the industry. In the UK, policymakers announced plans to collaborate with their counterparts in the US to explore crypto laws and regulations.
Related: Digital Chamber seeks to guide crypto policy across US states
US-based crypto advocacy organizations, such as The Digital Chamber, have garnered support from former regulators and members of Congress as the Trump White House directs policies toward the industry. Among these groups are the Solana Policy Institute, the Blockchain Association, the Crypto Council for Innovation, and the American Innovation Project.
UK central bank moves forward on stablecoins
On Nov. 10, the Bank of England released a consultation paper to propose a framework for “sterling-denominated systemic stablecoins.” The move by the country’s central bank marked a step toward the UK seeming to play catch-up to the US, where the government passed a law regulating payment stablecoins in July.
Bank of England Deputy Governor Sarah Breeden signaled before the publication of the paper that the central bank’s actions were in response to the US advancing stablecoin policies, and it was “really important” to be synchronized on rules.
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Kemi Badenoch has refused to say that the Conservatives are intending to win next May’s local elections, despite being repeatedly pushed on the issue.
Asked twice to define success for her party at the elections, the Tory leader merely said that she is “going to be fighting for every vote”.
Speaking to Sky News, she added: “Success is going to be people seeing the Conservative Party as the only party that is competent and credible enough to do the tough stuff that this country needs.”
The comments come as the Conservatives continue to trail in the polls.
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Watch Kemi Badenoch’s interview with Sky News in full
New data released by YouGov this morning has put the Tories in third place behind Reform and Labour, a space they have largely occupied throughout the year. The pollster’s weekly voting intention analysis put Ms Badenoch’s party on 18%, down one percentage point.
YouGov’s weekly voting intention poll has the Tories down one percent on last week, and just three above the Greens. Pic: YouGov
Ms Badenoch gave a speech on welfare costs in London on Tuesday, where she attacked the government’s plans to tackle child poverty. Afterwards, she sat down with Sky News political correspondent Sam Coates.
Asked about the local elections, she said: “There are going to be local elections all over the country, and there’s a conservative message that I want everyone to hear: Our country’s not working properly.
“There are fundamental things that need to change. We need to create jobs. Otherwise, we’re not going to have money for councils.”
She added: “We’ve seen new parties like Reform come in. They’re making a hash of things at council level. We need to make sure that people can see the benefits of voting Conservative.”
Ms Badenoch also refused to score her party’s performance out of 10. Pic: PA
When it was pointed out that she had not defined success as winning the local elections, Ms Badenoch said: “The country is going to decide. We’re going to put out an offer, and we’re going to fight for every vote.”
May will see local council elections, as well as votes for the Senedd in Wales and the Scottish Parliament. They are seen as a crucial moment for the Tory leader – and also for Prime Minister Sir Keir Starmer.
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‘Of course poverty bothers me’
Ms Badenoch also refused to score the party’s performance out of 10, as the year draws to a close, and she marks a little over 12 months as leader.
She told Sky News: “When I look at the historic defeats which Conservatives suffered last year, things are definitely better.”
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Challenged on the Tories’ position in the polls, Ms Badenoch said: “Of course, we have a mountain to climb.
“We lost more seats [in 2024] than we’ve ever done in our 200-year history. This was always going to be a long road ahead.”
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