Hello Bitcoiners,
Laws move slower than markets. But they hit harder. This is issue #89 of The Bitcoin Act: your Tuesday and Sunday briefing on the legal and regulatory moves that actually shape Bitcoin.
Now for today’s top stories:
🏛️ CFTC Platform Rules Hit 2028
TD Cowen says CFTC platform rules, including proof-of-reserves audits, likely won’t be final before early 2028.
🗳️ Crypto PACs Spend $2.7M
Fairshake affiliates backed CLARITY Act supporters in House races. That vote says nothing about Bitcoin taxes.
⚖️ Experts Map Post-CLARITY Year
Experts expect SEC custody and offering rules in 2027, while incumbent exchanges keep their edge.
USA
CFTC Platform Rules Race the 2028 Clock
On October 12, TD Cowen’s Jaret Seiberg said the CFTC’s (the commodities regulator) planned framework for leveraged and margined Bitcoin trading likely won’t be final until early 2028. He expects a formal proposal in late Q1 or early Q2 2027 at best.
Seiberg says the framework would require proof-of-reserves audits (proof a platform actually holds your coins) and extend CFTC authority over state-licensed platforms that offer leverage. Spot-only trading stays outside it. He also warns the rule may never be finalized.
Crypto PACs Drop $2.7M on House Races
October 10 filings show Fairshake’s affiliate super PACs (outside groups that can spend unlimited sums) spent $2.7 million on House races. Every target voted for the CLARITY Act, which passed the House but failed a Senate procedural vote in September.
The “pro-crypto” label rides on one market-structure vote and says nothing about Bitcoin tax treatment. Midterms fall November 3. The useful filter: your candidate’s record on self-custody and taxes, not a PAC’s ad buy.
Experts Map the Post-CLARITY Year
In CoinDesk interviews October 11, law professor Lev Breydo said the SEC will likely spend 2027 finishing offering rules (how tokens are sold to the public) and custody rules (who may hold client coins). Neither is final yet.
Bitwise’s Matt Hougan argued CLARITY’s failure shields incumbent exchanges from new competitors, delaying lower trading costs. The pending SEC custody rule covers advisers and funds holding client coins, not individuals holding their own keys.
Worldwide
🌐 Stablecoin Stress Test
The G20’s Financial Stability Board warned October 12 that stablecoins remain untested in a crisis, flagging multi-issuer coins whose reserves sit in one country while redemptions hit another. Recommendations aren’t binding.
🇬🇧 UK Court Favors Crown
London’s High Court ruled Monday that Chinese, not English, law governs fraud victims’ claims to 61,000 seized Bitcoin (£3.8 billion), improving the UK Treasury’s odds of keeping most of it. Victims are appealing.
🇧🇷 Seeds Found, Funds Seized
Brazil’s Santa Catarina police seized $1.7 million in crypto, including Bitcoin, from self-custody wallets after finding four seed phrases on suspects’ devices during Operation ClickFix, a state-police record.
🇫🇷 France’s Wrench Wave
France’s Interior Ministry logged 90 crypto-linked kidnapping, extortion and violent theft cases from January to mid-August, with 223 arrests. Chainalysis says leaked tax data likely fueled it; 40%+ of French attacks targeted relatives or acquaintances.
🇫🇷 Wallet Registry Advances
France’s Assembly Finance Committee voted October 9 to require declaring self-custody holdings worth €100,000+ as of December 31, with fines up to €10,000. It is not law: lawmakers must resubmit it during budget debate.
🕵️ ZachXBT Goes Undercover
Investigator ZachXBT revealed October 5 he posed as a client of a Chinese syndicate he says laundered $1B+ for North Korea’s Lazarus Group, gathering intel that helped freeze funds from the $1.5B Bybit exchange hack.
🇦🇺 Australia Reins CFDs
Australia’s regulator ASIC proposed a ten-year extension of its CFD order, which caps leverage on CFDs (bets on price moves without owning the asset), and would cover contracts settled on-chain. Comments close November 9.
🇦🇪 Kraken Licensed in Dubai
Kraken parent Payward announced October 12 it won Full Market Approval, the final licensing stage, from Dubai’s regulator VARA. UAE launch is targeted within weeks, with spot and margin trading in dirhams; derivatives await approval.
🇪🇺 EU Eyes Asset Recovery
The European Parliament passed a nonbinding resolution October 8 urging the Commission’s anti-corruption strategy, due by year-end, to address crypto and opaque ownership risks and strengthen tracing, freezing and confiscation of criminal proceeds.
🇩🇪 Bitcoin.de Loses MiCA Bid
Germany’s regulator refused Bitcoin.de operator Futurum Bank’s MiCA authorization. Trading, suspended since June 12, stays paused; withdrawals work. The platform plans to move trading and custody to regulated German partners.
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Ask Satoshi's Lawyer
Every week I answer one real question about Bitcoin law, regulation, or policy that affects your life as a stacker. No fluff. Just signal.
This week: Agency rule vs. act of Congress: what’s the actual difference for Bitcoin?
With the CLARITY Act stalled after its failed September 15 Senate vote, US Bitcoin rules now come from agencies like the SEC, CFTC and IRS. Those rules work very differently from a statute, a law passed by Congress and signed by the President.
A statute can only be changed by another act of Congress. An agency rule can be rewritten by the same agency through notice-and-comment, the public process the Administrative Procedure Act requires, so a new administration can reverse it.
Since Loper Bright v. Raimondo (June 2024), judges no longer defer to an agency’s reading of an unclear law. Rules can also fall as “arbitrary and capricious,” meaning poorly justified. A statute can only be struck down as unconstitutional.
Staff guidance, FAQs and no-action letters aren’t binding rules and can vanish overnight. The SEC’s SAB 121, requiring firms holding client Bitcoin to book it as a liability, was rescinded by SAB 122 on January 23, 2025.
Your tax treatment is agency-made too. The IRS treats Bitcoin as property under Notice 2014-21, guidance rather than statute. A de minimis exemption, meaning no tax on small Bitcoin payments, would require Congress to amend the tax code.
Got a legal or regulatory question you want answered next Tuesday? Hit reply and send it.
The Market Knows First: Bitcoin Law on Prediction Markets
📊 Will federal capital gains taxes be cut by 2026? — 5% Polymarket
📊 Who will Trump pardon before 2027? Keonne Rodriguez — 11% Polymarket
📊 Will pro-crypto Andy Barr win the Kentucky Senate race? — 97% Polymarket
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Regards,
— Satoshi’s Lawyer
The information contained in this newsletter does not constitute legal advice.
