Welcome to issue #43 of The Bitcoin Act, where every Tuesday and Sunday we track the legal and regulatory moves that actually shape Bitcoin, cutting through noise, narratives, and theater.

Now for today’s top stories:

⚖️ CLARITY Act Stalls on Stablecoin Yield
Senators Alsobrooks and Tillis struck a compromise on stablecoin yield language, but the banking lobby immediately rejected it as insufficient.

🏦 Wall Street Gets On-Chain IPOs
FINRA approved Securitize to underwrite tokenized stock IPOs and custody tokenized securities inside a regulated broker-dealer.

🔍 The IRS Already Has Your Coinbase History
Two former IRS insiders are presenting at Consensus Miami this week on the 1099-DA, the new form that automatically sends your Bitcoin sale records to the IRS.

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Senators Alsobrooks and Tillis struck a compromise on stablecoin yield language inside the CLARITY Act, the big market structure bill that's supposed to set federal rules for the whole industry. The deal tries to ban stablecoin issuers from paying yield that looks like bank interest, while still allowing "activity-based" rewards (think: earn a little for transacting, not just for holding). The banking lobby immediately fired back, saying the language "falls short" and doesn't actually stop platforms from paying deposit-like returns. Translation: banks are scared that a stablecoin offering 4% yield pulls deposits away from your local bank. Coinbase, which had killed an earlier version of this bill, signed off on this one.

What does this mean for you? Nothing directly, you don't hodl stablecoins, you hodl sats. But here's the signal: this bill is the vehicle for broader Bitcoin regulation too. The CLARITY Act draws the lines between what the SEC controls and what the CFTC controls. Bitcoin sits cleanly on the CFTC side, which is historically the more favorable regulator. Every week this stablecoin fight drags on is another week the whole bill stalls. No bill means more regulatory gray zone. Keep watching May.

The Block

FINRA, the self-regulatory body that oversees brokers and dealers, just gave a firm called Securitize the green light to underwrite IPOs for tokenized stocks and custody those assets inside a regular broker-dealer. In plain English: a company can now go public and issue its shares directly on a ledger, with Securitize acting as the underwriter (the firm that facilitates the offering), just like Goldman Sachs would for a traditional IPO. FINRA also approved "atomic swaps", meaning you can instantly exchange a tokenized stock for a stablecoin in one step, no multi-day settlement. 

Here's why this matters to you as a Bitcoin holder: the infrastructure being built around tokenized securities is the same infrastructure that will eventually be used to build regulated Bitcoin products, custody, settlement, on-chain ownership. The more FINRA and the SEC get comfortable with on-chain asset custody inside regulated entities, the more normalized the idea of self-custody becomes as a concept. It also means Wall Street is moving fast onto the ledger.

The Block

Two former IRS officials, Raj Mukherjee and Seth Wilks, are presenting at Consensus 2026 in Miami this Thursday on the 1099-DA and where IRS enforcement on Bitcoin is heading. These aren't random academics. Mukherjee and Wilks both worked inside the IRS building the agency's Bitcoin tax infrastructure. They know exactly how the machine works. The 1099-DA is the new tax form that went live for the 2025 tax year. It requires every broker, Coinbase, Kraken, River, all of them, to report your Bitcoin sales directly to the IRS, automatically, the same way Fidelity reports your stock trades. No action needed on your part. The IRS just receives it.

Here's what this means for you concretely: if you bought and sold sats on an exchange this year and didn't report it, the IRS already has a copy of that transaction. Mismatches between your return and a 1099-DA are the easiest audit trigger that exists, it's automated, no agent needed. What the 1099-DA does not capture is what happens after you withdraw to self-custody, on-chain moves between your own wallets, Lightning payments, peer-to-peer swaps. It only protects you if your coins are actually off exchange. Every sat sitting on Coinbase is a sat the IRS has a paper trail on. Self-custody isn't just a sovereignty move, it's your only remaining financial privacy, within the law.

Coindesk

🇳🇱 Netherlands Taxing You Before You Sell
The Dutch government confirmed its unrealized gains tax on Bitcoin, you owe tax on paper profits even without selling. A 61,000-signature petition changed nothing. Box 3 accrual tax launches January 1, 2028.

🇰🇷 Bithumb Gets a Lifeline
A Seoul court temporarily blocked South Korea's FIU from suspending Bithumb six months and fining it ₩36.8B (~$27M) over KYC failures. The exchange stays open while the legal fight continues.

🇫🇷 Société Générale Is Now Banking Bitcoin Companies
SG-Forge, SocGen's digital asset unit, now serves 15 clients including exchanges, brokers, and wallet providers. MiCA's regulatory clarity is what unlocked this, rather than treating Bitcoin firms as risk exposures, banks are now positioning them as clients. SocGen is also pushing its euro stablecoin EURCV, which grew 60% in 2026 to reach $120M after pivoting to a permissionless distribution strategy.

🇮🇹 Italy Wants a Tokenized SEPA
The Bank of Italy is urging the EU to tokenize SEPA, the system that moves euros between European banks. A central bank explicitly asking to put monetary plumbing on a ledger.

🌐 VPNs Are Under Attack
Utah holds websites liable if VPN users bypass age verification, effective May 6. UK and France signaling restrictions next. EU-wide ID verification rolls out across all 27 member states by end of 2026.

🇧🇹 Bhutan Is Dumping Its Bitcoin
Bhutan sold another 303 BTC ($23M) this week. Since peak holdings of 13,000 BTC in 2024, they've sold 75% of their reserves. Sovereign sellers exist at every level. You're the long-term holder they're selling to. Keep stacking.

🇺🇸 Still a US news story but very interesting!
New York extracted a $5M repayment deal from Uphold over the 2020 Cred LLC collapse. Uphold says it was also a victim. No admission of liability. Customers get repaid from bankruptcy scraps.

🇮🇷 Iran's Top Exchange Is the Supreme Leader's Family Business
Reuters found Nobitex, 70% of Iran's Bitcoin volume, 11 million users, was founded by brothers directly related by marriage to all three of Iran's supreme leaders. Hundreds of millions tied to Iran's central bank and IRGC moved through it since 2018. The U.S. just sanctioned Iran's shadow banking network and left Nobitex untouched.

🇫🇷 8 Years for $470M in Crypto Laundering
French national Maximilien de Hoop Cartier was sentenced to eight years by a U.S. court for running an unlicensed OTC exchange that laundered $470M in drug money through shell companies disguised as software firms.

🇪🇺 EU Sanctions Target All of Russia's Crypto Sector
The EU's 20th sanctions package doesn't just designate individuals, it targets Russia's entire Crypto industry. The digital ruble, RUBx stablecoin, and third-country exchanges facilitating Russian flows are all designated. EU citizens banned from transacting with any Russian Bitcoin entity.

Every week I drop one concrete, actionable answer to a legal or political question that actually affects your life as a Bitcoiner, focused on a specific, real-world action you can take. No theory. No fluff. Just the move.

This week: How do you keep financial privacy with Bitcoin, legally?

The 1099-DA is live. Chainalysis is under government contract. Banks report everything. The surveillance infrastructure is real. But privacy isn't illegal, it just requires intention.

Here's how to build it, layer by layer:

1. Acquire without linking your identity. Buy peer-to-peer on Bisq or Peach Bitcoin, no KYC, no paper trail. Mine your own, mined Bitcoin is the cleanest acquisition on-chain. If you use a regulated exchange, that's fine, but treat those sats as already known to the IRS.

2. Keep everything in cold storage. Coins on an exchange are coins the government can see, freeze, or subpoena. Hardware wallet, your keys, your Bitcoin.

3. Segregate your UTXOs, never mix them. A UTXO is simply a specific chunk of Bitcoin sitting at a specific address. A KYC sat and a P2P sat in the same wallet transaction = your entire stack potentially linked to your identity. Keep three separate wallets: one for KYC sats, one for P2P, one for mined. Never send between them without a privacy layer.

4. Use privacy tools. CoinJoin breaks the transaction graph, it pools your sats with others so chain analysts can't follow the trail. PayJoin and Silent Payments do the same at the payment level. Tools: Sparrow Wallet (CoinJoin built in), Cake Wallet, JoinMarket.

5. Learn to read the chain yourself. Understanding how you're tracked is the best defense. Start here:

Know your enemy. The firms governments use to trace Bitcoin: Chainalysis, Elliptic, and Crystal Intelligence. They collaborate directly with the IRS, FBI, and international regulators.

Coming soon: I'm releasing a full ebook covering exactly how to implement all of this, acquisition, storage, UTXO management, privacy tools, and legal framing.

Got a legal or regulatory question you want answered next Tuesday? Hit reply and send it.

📊 CLARITY Act signed into law in 2026 — 69% Polymarket

📊 CLARITY Act signed before August — 46% | Before July — 23% Kalshi

📊 Trump eliminates capital gains tax on Bitcoin by Dec 31, 2026 — 5% Polymarket

📊 Americans receive tariff stimulus checks in 2026 — 13% Kalshi

📊 U.S. national Bitcoin reserve established in 2026 — 25% Predyx

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