Tag: Regulation & Policy

SEC Proposes Sweeping Overhaul of Transfer Agent Rules, Embracing Blockchain

The Securities and Exchange Commission (SEC) has unveiled its first significant update to transfer agent regulations since the early 1980s, proposing a comprehensive rewrite that extensively addresses blockchain recordkeeping and tokenized securities. The 421-page release, published Tuesday, signals a major shift in how the agency views the management of ownership records for financial instruments.

Transfer agents are responsible for maintaining the official registry of security ownership, overseeing the issuance, cancellation, and transfer of securities. The current framework for these rules was largely established in the late 1970s and early 1980s.

The SEC’s release acknowledges a growing trend of market participants seeking to integrate blockchain-native, or “onchain,” transfer agents into the U.S. market. Firms are actively developing models for blockchain-based recordkeeping, tokenized fund administration, and cross-chain interoperability. These innovations would necessitate transfer agents maintaining securityholder records on distributed ledgers and operating processes driven by smart contracts.

Proposed amendments to Form TA-2 would require transfer agents to disclose the number of issues where their master securityholder file resides on a distributed ledger. Furthermore, tokenized issues would need to be categorized as either issuer-sponsored or third-party-sponsored. The SEC highlighted this distinction in a January 2026 staff statement, linking it to varying investor risks. Tokenization agents and distributed ledger platforms are now included alongside traditional service providers like banks and printers on a checklist.

The commission is soliciting feedback on how to handle records stored solely on ledgers not exclusively controlled by the agent. It also seeks input on whether current rules permit agents to link a wallet address and quantity held to offchain records of a holder’s name and address, thereby enabling an onchain transfer to simultaneously update the master file.

Commissioner Hester Peirce noted that the proposal has been in development for over a decade and encouraged comments on its implications for tokenization. The SEC last reviewed these rules in a 2015 concept release.

Commissioner Mark T. Uyeda commented that the lack of rulemaking for over a decade led the Commission to adopt a “regulation-by-enforcement approach,” which he described as a fragmented strategy that offered neither clarity nor predictability. He added that distributed ledger technology and tokenization, which were nascent in 2015, are now fundamentally reshaping the core functions of transfer agents.

SEC Chairman Paul S. Atkins stated that the updated rules would reflect the industry’s adoption of “electronic communications and blockchain technology.” The proposal also aims to eliminate an existing exemption rule, establish a uniform retention period for most records, and redefine the safeguarding rule as a risk-management requirement encompassing cybersecurity and business continuity.

In a separate announcement, the SEC revealed the agenda for a September 17 roundtable discussion on 24-hour trading. The event will feature panelists from Robinhood, Nasdaq, DTCC, and overnight trading venues Blue Ocean and 24X. Public comments on the transfer agent proposal are due 60 days after its publication in the Federal Register.

OpenPayd has significantly expanded its regulatory presence in the United States by integrating MSB USA Inc. into its group and securing 43 state money transmitter licenses (MTLs). This strategic move aims to bolster its position in the US market and establish a more comprehensive regulatory foundation for its North American operations.

The integration of MSB USA Inc., a US-based, state-licensed money services business, was finalized after obtaining the necessary regulatory approvals. This expansion enhances OpenPayd’s geographic reach, enabling it to better serve global clients already operating in the US or planning market entry.

Financial Performance and Market Ambitions

As of July 31, 2026, OpenPayd reported strong financial performance, with its annual recurring revenue (ARR) exceeding $96 million and its annualized transaction volume surpassing $300 billion. The company stated that it remains profitable and has not sought external capital. Currently, OpenPayd serves over 1,200 clients worldwide, including prominent financial and crypto firms such as Kraken, eToro, OKX, and B2C2.

Further underscoring its growth and market ambitions, OpenPayd is preparing to enter the US public markets through a previously announced business combination with Titan Acquisition Corp. The companies anticipate this combination will result in OpenPayd becoming a publicly listed company on the Nasdaq under the ticker symbol “OP.” The transaction is expected to value OpenPayd at an equity value of up to $1.145 billion on a pro forma basis. The closing of this business combination is anticipated in the fourth quarter of this year, subject to customary closing conditions, including shareholder approval from Titan Acquisition Corp.

Global Regulatory Footprint

This US expansion follows OpenPayd’s recent authorization under the European Union’s Markets in Crypto-Assets (MiCA) framework, granted by the Malta Financial Services Authority. This dual regulatory footing across fiat and digital assets in both the US, UK, and Europe positions OpenPayd as a provider of regulated financial infrastructure on both sides of the Atlantic.

OpenPayd Founder, Dr. Ozan Ozerk, commented on the significance of infrastructure in finance, stating, “Every era of finance has been defined by its infrastructure: correspondent banking wired together the twentieth-century economy; programmable money will power the twenty-first. The U.S. is at the forefront of this evolution, and with regulated foundations now spanning the U.S., U.K. and Europe – across both fiat and digital assets – OpenPayd has something few providers can claim: regulated infrastructure spanning both fiat and digital assets, on both sides of the Atlantic.”

While the business combination with Titan Acquisition Corp. is progressing, certain customary closing conditions, including shareholder approval, are still pending.

Broader Context

Source materials place the factual news in this context: OpenPayd has announced expanded its regulatory presence in the United States after completing the integration of MSB USA Inc. into its group.

A bipartisan group of former U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) officials is advocating for a more balanced and consistent regulatory approach to the cryptocurrency industry, particularly concerning derivatives and custody rules. They argue that the current regulatory landscape risks driving significant market activity offshore, while a risk-based framework could encourage onshore trading and mitigate risks.

The core message from these former officials is that regulatory approaches can inadvertently push trading elsewhere, but the underlying demand and associated risks do not disappear. “If we calibrate federal regulation to actual risk instead of maximum burden, that liquidity comes onshore,” stated former CFTC Chairman Chris Giancarlo, as quoted by Crypto In America. He added, “Every year we wait, it gets harder to bring to America.”

This call for regulatory clarity comes as both the SEC and CFTC are actively developing new rules for the approximately $2.5 trillion crypto industry. In June, the agencies sought public input on how to define various crypto products, including swaps and security-based swaps, and to clarify jurisdictional boundaries. The officials’ comment letter emphasizes that similar risks should face similar regulatory treatment and that overlapping rules should be avoided to prevent additional compliance costs.

Derivatives and Offshore Markets
The issue is particularly relevant for crypto derivatives, a market some signatories have argued U.S. regulation has largely driven overseas. Prediction market platform Kalshi estimates that offshore perpetuals trading could exceed $90 trillion by 2025, a significant increase from an estimated $28 trillion in 2023. Earlier this month, former President Donald Trump indicated that CFTC Chairman Michael Selig is working to bring the popular offshore perpetuals platform Hyperliquid into the United States. Kalshi sponsored the comment letter by retaining the law firm Bellementis PLLC for drafting, though the signatories stated they were not compensated and Kalshi had no influence over the letter’s content.

Evolving Custody Rules
Meanwhile, the SEC is also revisiting its approach to crypto custody rules. Last week, the agency sent a planned rewrite of its custody rules for investment advisers and investment companies to the White House Office of Information and Regulatory Affairs (OIRA) for review. This initiative aims to clarify how SEC-regulated investment firms can provide custodial services for digital assets while adhering to federal securities laws. The specific details of this rewrite are not yet public, leaving uncertainties about which firms might qualify as crypto custodians and what requirements they would need to meet.

This marks a notable shift from the SEC’s previous attempt to address crypto custody three years ago. At that time, then-Chairman Gary Gensler proposed a broad “safeguarding” rule that would have extended existing custody requirements beyond traditional funds and securities to encompass virtually all client assets, including crypto. The SEC later scrapped that proposal last year.

Separately, the SEC’s “Reg Crypto” proposal, which outlines new rules for certain crypto asset offerings, is open for public comment until October 20. The bipartisan nature of the officials submitting the comment letter is significant, especially at a time when neither the SEC nor the CFTC has bipartisan representation. The signatories contend that these are not inherently partisan issues, pointing to historical common ground between commissioners of both parties on investor protection and market competitiveness.

The current regulatory environment presents a critical juncture for the U.S. crypto market. The former officials’ input highlights the potential consequences of regulatory complexity and the opportunity to attract substantial offshore market activity by adopting a more harmonized and risk-focused approach.

Why This Matters

The materials describe a narrow update: A bipartisan group of former SEC and CFTC officials has submitted a comment letter advocating for regulatory clarity and consistency in the crypto market, especially for derivatives and custody. Details on which firms could qualify as crypto custodians under the SEC’s revised rules.

Broader Context

Source materials place the factual news in this context: While crypto market structure legislation sits in summer recess limbo, the SEC and CFTC are getting a head start on writing the rules for the $2.5 trillion industry.

Coinbase CEO Claims ‘Entrenched Incumbents’ Lobbying Against Crypto Bill

Coinbase CEO Brian Armstrong has accused “entrenched incumbents” of actively lobbying against the CLARITY Act, asserting that established financial players are attempting to prevent cryptocurrency companies from competing within the U.S. financial services sector.

Armstrong framed the legislative battle over the bill as a direct contest between traditional firms seeking to preserve their market position and crypto businesses striving for clearer regulatory frameworks.

He recalled the sentiment that led to the Trump administration’s rise, suggesting that millions of Americans felt “disenfranchised” by the previous administration’s approach to cryptocurrency. Armstrong highlighted Donald Trump’s 2024 campaign promise to remove former SEC Chair Gary Gensler, referencing the strong reaction when Trump stated at a Bitcoin conference that he would fire Gensler “on day one.”

Armstrong then outlined what he perceives as progress since Trump took office, including an executive order mandating clearer crypto rules, the appointments of SEC Chair Paul Atkins and CFTC Chair Mike Selig, and the passage of the GENIUS Act concerning stablecoins. He positioned the CLARITY Act as the next crucial step.

“Make no mistake, there are people out there actively fighting against this,” Armstrong stated. “There are entrenched incumbents who don’t want competition from crypto companies that would provide better financial services.”

He further alleged that some of these firms are “actively lobbying against it, trying to kill it.” The Coinbase chief also specifically named Senator Elizabeth Warren as someone seeking to block the legislation. His remarks come as the bill approaches a September 15 Senate vote on a motion to proceed.

As previously reported, Armstrong had indicated on August 21 that regulatory clarity was imminent, either through congressional action or directives from the SEC and CFTC. He identified September 15 and 16 as potential dates for such developments.

The Senate requires 60 votes for cloture, and with Republicans holding 53 seats, they would need at least seven additional votes from Democrats or independents to advance the measure, even if all Republican senators support it.

Moreover, the bill faces ongoing disputes concerning ethics rules, anti-money laundering provisions, and the permissibility of crypto companies offering rewards on customer stablecoin holdings.

The banking industry’s concerns regarding stablecoin rewards align closely with Armstrong’s argument about competition. This particular provision has encountered resistance from traditional lenders, who contend that such products could divert deposits away from banks.

This dispute underscores that the CLARITY Act debate extends beyond determining which regulator oversees cryptocurrency. The legislation aims to establish federal rules for digital assets, including token classification and the delineation of responsibilities between the SEC and CFTC.

Amidst these developments, Armstrong’s message is clear: the bill should be passed to provide consumers and crypto firms with much-needed regulatory clarity, and established financial companies should not be allowed to stifle competition through lobbying efforts.

“It’s time to get the Clarity Act, which will protect consumers, over the finish line,” he wrote on X. “There’s something in it for everyone: banks, law enforcement, crypto companies, and most importantly the American people.”

Hyperliquid Eyes U.

S. Market Entry Via Kraken Parent Company

Singapore-based cryptocurrency derivatives platform Hyperliquid is reportedly in advanced discussions to offer its perpetual futures contracts to American traders through Payward, the parent company of U.S. exchange Kraken. The move, detailed in a Bloomberg report citing individuals familiar with the matter, would involve routing U.S. customers to a select offering of Hyperliquid’s crypto-linked perpetual futures via Bitnomial, Payward’s U.S.-regulated digital asset exchange and clearinghouse.

Representatives for both Payward and Hyperliquid Labs declined to comment on the report.

This potential partnership would signify Hyperliquid Labs’ first foray into the U.S. market, a region where its rapidly expanding platform has thus far been inaccessible to customers. It could also establish a blueprint for other offshore, unregistered trading venues seeking to establish a presence within the United States.

Any such agreement would necessitate regulatory approval. Bloomberg reported that Payward has already submitted a proposal to the Commodity Futures Trading Commission (CFTC) outlining the fundamental structure of the arrangement, though financial terms remain undisclosed.

The proposed structure aims to overcome a significant hurdle that has prevented Hyperliquid from operating in the U.S. As a decentralized platform with daily trading volumes exceeding $4 billion, Hyperliquid lacks a central operator. Its permissionless design allows anyone to trade, a characteristic that regulators have expressed concerns about due to potential exposure to market manipulation, money laundering, and sanctions evasion. By channeling access through Bitnomial’s regulated infrastructure, the arrangement would introduce the operator and oversight mandated by regulatory frameworks.

This development follows recent remarks by former President Donald Trump, who indicated earlier this month that his administration was working to bring such platforms onshore. Trump’s comments at a White House event, suggesting that CFTC Chairman Michael Selig was exploring a pathway for Hyperliquid, had previously caused a sharp increase in the platform’s HYPE token.

The ongoing discussions also occur amidst intensified efforts by the Securities and Exchange Commission (SEC) and the CFTC to implement rules that could potentially shift offshore perpetual futures trading, a market considerably larger than its U.S. counterpart, back to domestic platforms.