BUILDING A REGULATORY ENVIRONMENT FOR ONCHAIN INNOVATION

Summary from the TLDR Crypto newsletter

Repealing the IRS “DeFi Broker Rule,” passing the GENIUS Act and the Digital Asset Market Clarity Act, plus an SEC “innovation exemption” proposal, signals that regulators are engaging, but rules must balance consumer protection with innovation. Policymakers should both acknowledge DeFi's self‑custodial, permissionless architecture and set clear standards, focusing on three gaps: outcome-based disclosures (how it works, what can fail, who controls what, and who's accountable), control-based liability, and pragmatic compliance for self-custodial systems. Existing laws can still address fraud, manipulation, and sanctions evasion without compromising trustless design. Thoughtful frameworks can make onchain markets safer, more sustainable, and institution-ready.