gm from the Day One Law team!

Today’s brief legal update includes:

• Latest on crypto market structure legislation in the U.S.

• CFTC launches “Future-Proof” initiative, collaborating with SEC

Confused by market structure? We’ve got you covered

In a speech at Davos, President Trump said, “Congress is working very hard on crypto market structure legislation, which I hope to sign very soon.” It’s been a busy few months since comprehensive crypto legislation was first proposed, but we’re yet to see anything resembling a final bill.

On January 12, Senate Banking Committee Chairman Tim Scott released a new version of a bill, titled the Digital Asset Market Clarity Act. (Full text here). The markup of that bill stalled a few days later, when Coinbase publicly withdrew support, citing the lack of stablecoin yield pushed by the banking lobby.

On January 21, the Senate Agriculture Committee released a new digital asset market structure text, the Digital Commodity Intermediaries Act. (Full text here). Here’s what you should know:

• The DeFi Education Fund noted that the Banking Committee’s draft offered weaker protections for developers than prior versions, whereas the Agriculture Committee’s version — the more recent text — included “robust developer protections” in the form of certain exemptions from the Act’s requirements.

• Both drafts define a blockchain system as centralized if it is (1) under common control by a group that can materially alter the functionality or rules, or (2) doesn’t act solely on transparent rules within the source code, or (3) anyone has unilateral authority to censor or restrict use of the ledger.

• Whether a blockchain is centralized will remain an important distinction, as the proposed legislation established differing standards of compliance for decentralized vs. centralized networks.

• Other key topics in negotiations include stablecoin yield, listing standards for tokens, dividing CFTC and SEC oversight, the inclusion of ethics provisions and the classification of meme coins.

Both Democratic and Republican senators have said negotiations are ongoing, and a markup of the Senate Agriculture Committee’s draft is scheduled for January 29. Both drafts would need to be reconciled for this to move forward to a full vote by the Senate.

What you should know: Both bills define when a blockchain system is considered "centralized" and tie different compliance obligations to that distinction. If your team can push upgrades, pause contracts, or controls a significant token allocation, your project may face heightened regulatory requirements under either framework.

• As you structure governance or think through revisions, map your control points: admin keys, upgrade authority, governance concentration, and token allocation. These factors could shape your compliance pathway under the proposed framework.

• The Banking Committee's draft includes a "Certification of Decentralization" process and defines "Mature Blockchain" criteria (including a 20% insider token threshold) that could allow tokens to transition regulatory frameworks for secondary trading. If decentralization is part of your roadmap, these criteria offer a useful benchmark to watch as the bills are reconciled.

If you're building infrastructure or tooling rather than running an intermediary, the Agriculture Committee's developer protections may offer a different regulatory path worth watching.

CFTC launches “Future-Proof” initiative for crypto

Earlier this month, CFTC Chairman Mike Selig launched the “Future-Proof” initiative to modernize rules for crypto and prediction markets.

Announced via an op-ed in the Washington Post, Chairman Selig promised the CFTC’s regulations will be written to mitigate the ability for future “rogue regulators.” Chairman Selig added that he will work with the Innovation Advisory Committee (charter members include executives from crypto firms such as Gemini, Kraken, Crypto.com, Polymarket and Kalshi) to develop “purpose-fit rules for prediction markets, digital assets and other emerging asset classes.” You can read the full press release here.

In a related thread on X, Chairman Selig added that “our markets are moving onchain within the next few years, allowing for greater transparency than what was available in the runup to 2008.” 

We also saw the CFTC and SEC schedule a joint event on January 29 to discuss harmonization between the two agencies and “deliver on President Trump’s promise to make the U.S. the crypto capital of the world.” These collaborating regulators could deliver invaluable guidance that fills gaps in the absence of market structure rules.

You should know: Chairman Selig's "minimum effective dose" language suggests a shift from enforcement-first to rules-first. If that holds, this could be a window to help shape the framework before it's finalized.

• If you're building in spaces the CFTC may touch, notice-and-comment processes could be worth engaging with as rules take shape.

• The January 27 joint SEC/CFTC meeting may offer signals on how the agencies plan to divide oversight. That split could affect whether your token is treated as a commodity or security down the line.

Chairman Selig has stated publicly that markets are moving onchain. If you're building compliant onchain infrastructure, that trajectory could work in your favor.

That’s it for your legal update.

As always, please reach out if you have questions or just want to riff on what we’re seeing in the market and the implications of any of the above.

Talk soon.

Nick Pullman
Day One Law