Legal update from Day One Law

gm from the Day One Law team!

This week’s legal update includes:

Let’s quickly discuss.

1/3: Draft Digital Asset Market Structure Bill

A draft bill was published early last week with the intention of creating a regulatory framework for digital assets in the U.S.

“America needs to be the powerhouse for digital asset investment and innovation. For that to happen, we need a commonsense regulatory regime,” said Representative Dusty Johnson, who chairs the Subcommittee on Commodity Markets, Digital Assets, and Rural Development. He was one of four House committee leaders to sponsor the bill.

The 212-page discussion draft attempts to capture most of the digital assets market but carves out certain portions, such as DeFi, to focus on tokens. The early draft suggests that:

• For projects yet to launch a token: ICOs could return to the U.S. en masse, as the bill offers projects a path to regulated distribution of tokens and allows early-stage projects to issue tokens for fundraising amounts of up to $150M per year. 

• For projects with a token: The SEC will be given discretion to exempt previously issued tokens from the bill’s requirements.

The bill introduces the concept of mature blockchain systems, which act as a proxy for decentralization. This could allow projects to graduate from regulatory oversight and remove purchase limits. While the specifics need to be provided by regulators, the concept does include six principles that regulators would use to determine whether systems are mature and therefore out of their jurisdiction:

1. System value: The token’s market value must be substantially derived from the programmatic functioning of the blockchain system.
   

2. Functional system: Participants must be able to use the system for its intended purposes.
   

3. Open system: The source code must be open source and the network must be available to the public.
   

4. Programmatic System: The operations and functions of the system must be rule-based, determined by the source code, and not dependent on any single person.
   

5. System Governance: No person or group can have the authority to control or materially alter the functionality, operation, or rules of the system, nor can they own or control more than 20% of the total units or voting power.
   

6. Impartial System: The digital commodity issuer, affiliated person, or related person cannot have special privileges to alter the system's functionality or operation, except for certain situations.

This is a discussion draft and substantial changes are to be expected. Still, it’s useful to understand the direction of the language. You can read the one-pager on the draft here. We’ll keep you updated on the bill’s progress. 

You should know: This draft gives a clear view of what legislators think “compliant” looks like: open-source codebases, rule-based operations, decentralization of control, and broad public access to functionality. If you’re pre-token launch, now is the time to align. If you’re already live, it’s still a useful direction to move toward. Matching this framework gives you a cleaner path to unconstrained operations in the U.S. once rules are finalized, while falling outside it may force redesigns and delays that distract from product. Tactically, that means thinking now about open-sourcing core logic, distributing token and governance rights, removing admin keys or setting up on-chain multisigs, and avoiding any centralized levers that can unilaterally control or upgrade system functionality.

2/3: Latest On Stablecoin Bills

We’ve seen little movement on both the STABLE and GENIUS bills. The latter failed to achieve cloture, which requires 60 percent of Senate votes to close debate. The bill had been fast-tracked by Senate Majority Leader John Thune with revisions banning stablecoin yield and strengthened illicit finance protections before failing 48-49. If eventually passed, it is expected to bring Tether under U.S. jurisdiction.

Before the vote, Democratic Senator Ruben Gallego warned that his party would oppose cloture due to various concerns. These range from President Trump’s potential conflicts of interest to AML concerns, foreign issuers, and other risks to national security and the overall financial system. 

Even certain Republicans voted no, citing the need for stronger safeguards against Big Tech companies launching their own stablecoins. 

"The reason you're hearing some hesitancy: The legislation of this scope and importance really cannot be rushed, and we need time," said Senator Gallego. 

Senate delays mean more negotiation will occur before GENIUS is up for a vote again. Once the bill advances — some Senators believe it will be approved in ten days — a simple Senate majority can pass it. 

The House of Representatives' version of the stablecoin legislation (STABLE) passed the U.S. House Committee on Financial Services in early April and should see consideration and a floor vote in their chamber of Congress in the near future. 

President Trump had set a deadline of August for stablecoin legislation. Both GENIUS and STABLE set aggressive timelines for rulemaking, with federal regulators given deadlines of one-year and 180 days, respectively, to draft and implement regulations necessary to approve, license and regulate stablecoin issuers.

You should know: The message from regulators is clear: stablecoins that offer yield, rely on volatile or non-fiat reserves, or lack strong redemption mechanics are directly in the crosshairs. That has far-reaching implications beyond just issuers, and any product using these assets for lending, payments, or liquidity is exposed. If your protocol depends on stablecoins that may be excluded under future U.S. rules, you could be forced to block U.S. users or migrate your stack. That’s not trivial if those tokens are deeply embedded in contracts, vault logic, or third-party dependencies. Start mapping fallback options now so you’re not scrambling to unwind critical integrations if the rules change.

Full breakdown here: SEC Stablecoin Statement, STABLE Act & DOJ Letter.

3/3: Crypto M&A Activity

While securities regulatory attorneys were busy — mentions of 'cryptocurrency' and 'stablecoins' in SEC filings hit a record high in April — the M&A field has been exceptionally active. The changing tone set by agencies like the SEC is one reason for the institutional dealmaking, which includes:

• Coinbase buying crypto options platform Deribit for $2.9 billion (link)

• Ripple reportedly offering between $4 billion to $5 billion for USDC issuer Circle (link)

• Ripple acquiring broker Hidden Road for $1.25 billion (link)

• Kraken acquiring retail futures platform NinjaTrader for $1.5 billion (link)

• Robinhood is set to buy Canadian exchange WonderFi for $179 million (link)

You should know: VCs are starting to see real exit activity again, and that sets the stage for capital to flow back into early-stage rounds over the next few quarters. It should be a better fundraising environment moving forward. As that happens, investors may begin caring more about equity upside and traditional corporate governance protections again, not just token allocations. If you’re planning a raise, be ready for deal terms that start to resemble traditional tech financings in addition to the usual token focus. Cap table structure, board control, and equity clarity may matter again.

As always, please reach out if you have questions about how the above relates to your ongoing work.

We’ll be back with your next update in a week. Talk soon.

Nick Pullman
Day One Law

This article is for informational purposes only and is not legal advice. Please consult with an attorney at Day One Law Corp regarding your specific situation.