In the current market environment fraught with anxiety, recent actions by U.S. financial regulators suggest a softening of the formerly hardline stance on cryptocurrencies, with the 'ice' of hostile regulation from the previous administration beginning to melt.

Unlike the gradually warming temperatures, the cryptocurrency market has been on a downward spiral since Bitcoin fell below $90,000 on February 25th. Around 10:50 AM today, Bitcoin even broke through the $80,000 mark, reaching a new low in nearly 3.5 months. According to Coingalss data, the total liquidation amount in the past 24 hours reached $728 million, with long positions liquidated for about $621 million and short positions for about $107 million. Moreover, today's Crypto Fear & Greed Index, although slightly up from yesterday, remains in 'extreme fear' territory, according to Alternative.me data.

Yet, amidst this market panic, a series of recent actions by U.S. financial regulators indicates a shift in the formerly tough attitude towards cryptocurrencies, with the 'ice' of regulation from the previous administration slowly melting away.

The New SEC's Stance

Whereas the previous U.S. SEC under Gary Gensler's leadership was seen as hostile towards the crypto industry, the new SEC, under the interim chair Mark Uyeda, seems to be embracing it. Since Gary Gensler's departure on January 21st, the new SEC has been working to change its image.

In the past week, the SEC has concluded investigations and enforcement actions against OpenSea, Robinhood Crypto, Uniswap Labs, and Gemini, and has officially dropped its lawsuit against Coinbase, planning to withdraw lawsuits against ConsenSys and MetaMask. Additionally, Binance and the SEC filed a joint motion this month to pause the lawsuit for 60 days due to the potential impact of a newly established cryptocurrency task force, marking the first pause request in a crypto-related lawsuit under Mark Uyeda's chairmanship. Influenced by this, the Tron Foundation and Justin Sun also filed a joint motion with the SEC to pause the lawsuit.

Furthermore, on the controversial subject of Memecoins, the SEC has shifted from its previous ambiguous stance to issuing clear guidance, stating that they are "not securities but more like collectibles." The SEC believes that Memecoin transactions do not involve the issuance and sale of securities as defined by federal securities laws. Therefore, individuals involved in Memecoin issuance and sales are not required to register their transactions with the Commission under the 1933 Securities Act, nor do they need to qualify for registration exemptions under the Act. However, the department also pointed out that Memecoin buyers or holders are not protected by federal securities laws.

Perhaps due to the recent market cooldown and the proactive, frequent signals from the SEC, people have begun to notice the significant changes it has made. In fact, since the establishment of the new SEC, various actions have been ongoing.

The day after Gary Gensler's official resignation, Mark Uyeda announced the formation of a special cryptocurrency task force, led by Hester Peirce, "dedicated to developing a comprehensive and clear regulatory framework for cryptocurrency assets." Then, on January 24th, the SEC officially revoked the crypto asset accounting standard SAB-121, marking the 'first shot' in comprehensive reform. Since then, the SEC has begun to downsize its crypto enforcement division, transferring some lawyers and staff to other departments, and has formed a new task force, announcing tasks such as examining the status of different types of crypto assets under securities laws and providing clear statements on the methods for approving or disapproving crypto ETFs. Subsequently, we've seen various news about the SEC reviewing ETFs, such as soliciting comments on the Grayscale Litecoin ETF, accepting the 19b-4 application for the Grayscale Solana ETF, accepting the application for the Grayscale XRP Trust conversion ETF, and accepting the 19b-4 application from Cboe BZX to add staking features for the 21Shares Ethereum ETF.

All of these signs point to a completely different image that the new SEC will present.

Other Regulatory Progress Beyond the SEC

Aside from the SEC's proactive reforms in cryptocurrency regulation, other regulatory progress is also worth noting.

The U.S. House Ways and Means Committee recently passed a resolution to repeal the IRS's "DeFi Broker Rule" with a vote of 26 to 16, which is a boon for DeFi. However, the resolution requires majority approval from both the House and the Senate and the President's signature to become effective.

Additionally, at the first hearing of the U.S. Senate Banking Committee's Digital Assets Subcommittee, chaired by Cynthia Lummis, the legislative progress on stablecoins became the focus. Lummis emphasized that stablecoins will be the Subcommittee's top priority and "plans to develop a bipartisan legislative framework for stablecoins and their market structure in the coming months." Former CFTC Chairman Timothy Massad also suggested at the hearing that legislators should prioritize the legal framework for stablecoins and delay dealing with market structure-related issues. Moreover, Virginia Democrat Mark Warner asked subcommittee members to discuss the possibility of conducting KYC processes for stablecoin users.

Meanwhile, more government departments are accelerating their engagement with the cryptocurrency industry. For example, U.S. Treasury Secretary Scott Bessent recently hired Tyler Williams, a legal advisor at Galaxy Digital, as a policy advisor for digital assets and blockchain technology. And according to Michael Saylor, he recently met with the Chair of the House Financial Services Committee, French Hill, and proposed a set of digital asset regulatory framework recommendations.

These initiatives from the government, regulatory bodies, and industry leaders all indicate that the regulatory environment in the cryptocurrency sector is gradually maturing. Against this backdrop, although the market is currently facing a cooldown, in the long term, the cryptocurrency market may enter a period of healthier and more standardized development.

Regulatory Progress and the Strategic Bitcoin Reserve by States

Unlike the direct regulatory benefits released by the SEC and various agencies, progress on the strategic Bitcoin reserve by states has not been as smooth, but overall, it remains positive.

The "Bitcoin Laws" website established by Julian Fahrer shows that currently, 24 states have proposed strategic Bitcoin reserve bills, with a total of 31 bills. Among these, the Bitcoin reserve bills in Montana, South Dakota, North Dakota, Pennsylvania, and Wyoming have been vetoed or put on hold. The state with the fastest progress is Utah, where the bill has been submitted to the Senate. Next is Arizona, where the bill has passed the Senate's third reading with a vote of 17 in favor and 12 against, and will now be submitted to the House for consideration. Other states with relatively advanced progress include Oklahoma and Texas. (Note: Bills can be introduced in either the House or the Senate, and if introduced in the Senate, they are submitted to the House after Senate approval, and vice versa. If both houses pass the bill, it is submitted to the governor for signature or veto. Once the governor signs, the bill becomes law.)

Although the pace of each state is different, the legislative progress of the strategic Bitcoin reserve signifies the attention and adoption of cryptocurrencies by local governments. While it is unknown what preparations the Trump administration is currently making for this strategy, not rushing into action may be more reasonable.

Conclusion

Although the market is facing severe price volatility and widespread panic due to the largest hacking crisis in history, there is hope that the gradual improvement of the regulatory environment will, like the faint warmth of spring, gradually melt the 'ice' of past regulation, injecting new vitality into the market. As for the current sliding market, the author also suggests that everyone take a wait-and-see approach.

In the current market environment fraught with anxiety, recent actions by U.S. financial regulators suggest a softening of the formerly hardline stance on cryptocurrencies, with the 'ice' of hostile regulation from the previous administration beginning to melt.

Unlike the gradually warming temperatures, the cryptocurrency market has been on a downward spiral since Bitcoin fell below $90,000 on February 25th. Around 10:50 AM today, Bitcoin even broke through the $80,000 mark, reaching a new low in nearly 3.5 months. According to Coingalss data, the total liquidation amount in the past 24 hours reached $728 million, with long positions liquidated for about $621 million and short positions for about $107 million. Moreover, today's Crypto Fear & Greed Index, although slightly up from yesterday, remains in 'extreme fear' territory, according to Alternative.me data.

Yet, amidst this market panic, a series of recent actions by U.S. financial regulators indicates a shift in the formerly tough attitude towards cryptocurrencies, with the 'ice' of regulation from the previous administration slowly melting away.

The New SEC's Stance

Whereas the previous U.S. SEC under Gary Gensler's leadership was seen as hostile towards the crypto industry, the new SEC, under the interim chair Mark Uyeda, seems to be embracing it. Since Gary Gensler's departure on January 21st, the new SEC has been working to change its image.

In the past week, the SEC has concluded investigations and enforcement actions against OpenSea, Robinhood Crypto, Uniswap Labs, and Gemini, and has officially dropped its lawsuit against Coinbase, planning to withdraw lawsuits against ConsenSys and MetaMask. Additionally, Binance and the SEC filed a joint motion this month to pause the lawsuit for 60 days due to the potential impact of a newly established cryptocurrency task force, marking the first pause request in a crypto-related lawsuit under Mark Uyeda's chairmanship. Influenced by this, the Tron Foundation and Justin Sun also filed a joint motion with the SEC to pause the lawsuit.

Furthermore, on the controversial subject of Memecoins, the SEC has shifted from its previous ambiguous stance to issuing clear guidance, stating that they are "not securities but more like collectibles." The SEC believes that Memecoin transactions do not involve the issuance and sale of securities as defined by federal securities laws. Therefore, individuals involved in Memecoin issuance and sales are not required to register their transactions with the Commission under the 1933 Securities Act, nor do they need to qualify for registration exemptions under the Act. However, the department also pointed out that Memecoin buyers or holders are not protected by federal securities laws.

Perhaps due to the recent market cooldown and the proactive, frequent signals from the SEC, people have begun to notice the significant changes it has made. In fact, since the establishment of the new SEC, various actions have been ongoing.

The day after Gary Gensler's official resignation, Mark Uyeda announced the formation of a special cryptocurrency task force, led by Hester Peirce, "dedicated to developing a comprehensive and clear regulatory framework for cryptocurrency assets." Then, on January 24th, the SEC officially revoked the crypto asset accounting standard SAB-121, marking the 'first shot' in comprehensive reform. Since then, the SEC has begun to downsize its crypto enforcement division, transferring some lawyers and staff to other departments, and has formed a new task force, announcing tasks such as examining the status of different types of crypto assets under securities laws and providing clear statements on the methods for approving or disapproving crypto ETFs. Subsequently, we've seen various news about the SEC reviewing ETFs, such as soliciting comments on the Grayscale Litecoin ETF, accepting the 19b-4 application for the Grayscale Solana ETF, accepting the application for the Grayscale XRP Trust conversion ETF, and accepting the 19b-4 application from Cboe BZX to add staking features for the 21Shares Ethereum ETF.

All of these signs point to a completely different image that the new SEC will present.

Other Regulatory Progress Beyond the SEC

Aside from the SEC's proactive reforms in cryptocurrency regulation, other regulatory progress is also worth noting.

The U.S. House Ways and Means Committee recently passed a resolution to repeal the IRS's "DeFi Broker Rule" with a vote of 26 to 16, which is a boon for DeFi. However, the resolution requires majority approval from both the House and the Senate and the President's signature to become effective.

Additionally, at the first hearing of the U.S. Senate Banking Committee's Digital Assets Subcommittee, chaired by Cynthia Lummis, the legislative progress on stablecoins became the focus. Lummis emphasized that stablecoins will be the Subcommittee's top priority and "plans to develop a bipartisan legislative framework for stablecoins and their market structure in the coming months." Former CFTC Chairman Timothy Massad also suggested at the hearing that legislators should prioritize the legal framework for stablecoins and delay dealing with market structure-related issues. Moreover, Virginia Democrat Mark Warner asked subcommittee members to discuss the possibility of conducting KYC processes for stablecoin users.

Meanwhile, more government departments are accelerating their engagement with the cryptocurrency industry. For example, U.S. Treasury Secretary Scott Bessent recently hired Tyler Williams, a legal advisor at Galaxy Digital, as a policy advisor for digital assets and blockchain technology. And according to Michael Saylor, he recently met with the Chair of the House Financial Services Committee, French Hill, and proposed a set of digital asset regulatory framework recommendations.

These initiatives from the government, regulatory bodies, and industry leaders all indicate that the regulatory environment in the cryptocurrency sector is gradually maturing. Against this backdrop, although the market is currently facing a cooldown, in the long term, the cryptocurrency market may enter a period of healthier and more standardized development.

Regulatory Progress and the Strategic Bitcoin Reserve by States

Unlike the direct regulatory benefits released by the SEC and various agencies, progress on the strategic Bitcoin reserve by states has not been as smooth, but overall, it remains positive.

The "Bitcoin Laws" website established by Julian Fahrer shows that currently, 24 states have proposed strategic Bitcoin reserve bills, with a total of 31 bills. Among these, the Bitcoin reserve bills in Montana, South Dakota, North Dakota, Pennsylvania, and Wyoming have been vetoed or put on hold. The state with the fastest progress is Utah, where the bill has been submitted to the Senate. Next is Arizona, where the bill has passed the Senate's third reading with a vote of 17 in favor and 12 against, and will now be submitted to the House for consideration. Other states with relatively advanced progress include Oklahoma and Texas. (Note: Bills can be introduced in either the House or the Senate, and if introduced in the Senate, they are submitted to the House after Senate approval, and vice versa. If both houses pass the bill, it is submitted to the governor for signature or veto. Once the governor signs, the bill becomes law.)

Although the pace of each state is different, the legislative progress of the strategic Bitcoin reserve signifies the attention and adoption of cryptocurrencies by local governments. While it is unknown what preparations the Trump administration is currently making for this strategy, not rushing into action may be more reasonable.

Conclusion

Although the market is facing severe price volatility and widespread panic due to the largest hacking crisis in history, there is hope that the gradual improvement of the regulatory environment will, like the faint warmth of spring, gradually melt the 'ice' of past regulation, injecting new vitality into the market. As for the current sliding market, the author also suggests that everyone take a wait-and-see approach.