The Process of U.S. Cryptocurrency Legislation Stuck in Political Struggles (Issue 1 · Week 29, 2026)

01Event Overview

On July 8, 2026, AscendEX announced its shutdown and suspension of withdrawals due to the lack of EU MiCA authorization as well as failed fundraising efforts, exposing the compliance risks and fragile capital structures of exchanges. On the same day, Wisconsin and New York State filed criminal charges against Circle for refusing to freeze fraudulent assets, sparking a fierce debate over the technical architecture of stablecoins and their legal obligations. These incidents highlighted the compliance crises faced by the crypto industry under intense regulatory pressure, accelerating the sector’s transition from an unregulated environment to one with established rules.

02Course of the incident

• [2026-07-01] AscendEX announced its shutdown and suspension of withdrawals due to the failure to obtain EU MiCA approval and funding issues, exposing compliance risks and vulnerabilities in its capital structure.
• [2026-07-02] The Treasury Secretary’s defense of Trump as having no moral flaws sparked discussions regarding the compliance status of $140 million in crypto earnings.
• [2026-07-08] Wisconsin and New York State filed criminal charges against Circle for failing to freeze $380,000 in fraudulent assets, intensifying the tension between stablecoin technical frameworks and legal obligations.
• [2026-07-09] Five acquisition deals over the past month show giants using low prices to acquire licensed institutions, accelerating the transition of crypto infrastructure from an informal sector to a more institutionalized model.
• [2026-07-10] Gate US obtained a new money transmission license in Florida, expanding its compliance footprint to 47 jurisdictions across the United States.
• [2026-07-10] Polymarket applied to the NFA through an affiliated company for a futures commission merchant license, seeking CFTC approval to amend rules to support non-full-margin trading.

03Impact Analysis

Impact Analysis

Market Price Dimension Divergent expectations regarding compliance have led to severe fluctuations in asset prices. On July 13, 2026, the CASHCAT token on Robinhood’s blockchain took advantage of its initial launch phase, with its market value soaring to $200 million, demonstrating that speculative capital still possesses significant momentum under a compliance-driven environment. Conversely, compliance pressures have directly impacted platform valuations and liquidity. AscendEX was shut down on July 1, 2026, for failing to meet MiCA standards, resulting in a funding gap of millions of dollars for hot wallets and risks to user repayments. Coinbase has included the compliant DeFi derivative GRVT in its listing roadmap, which is expected to significantly enhance its liquidity while triggering price fluctuations.

Regulatory Response Dimension Global regulation has entered a phase of strict enforcement and strategic competition. The implementation of the EU’s MiCA regulations has spurred a wave of compliance efforts. The EURC token issued by Circle obtained a license in France, with both on-chain activity and the number of new addresses reaching their highest levels in four years. In the United States, Gate US acquired a money transmission license in Florida on July 10, 2026, expanding its compliant operations to 47 jurisdictions. Polymarket applied to the NFA for a futures commission merchant license on the same day to offer margin trading in compliance with regulations. However, a compliance crisis emerged regarding stablecoins. On July 9, 2026, Wisconsin and New York State filed criminal charges against Circle for refusing to freeze fraudulent assets, sparking intense debates over technical architectures and legal obligations. In South Korea, three major exchanges jointly placed BONK on delisting watch on March 28, 2026, marking the onset of a phase of strict regulatory enforcement.

Ecosystem Impact Dimension The industry is accelerating its transition from an unregulated landscape to an institutionalized one, but innovation is being stifled. Data from July 9, 2026, shows that giants such as Samsung are taking advantage of the bear market to acquire licensed institutions at low prices, thereby accelerating the institutionalization of infrastructure. Yet, high compliance costs and capital concentration are suppressing early-stage innovation, turning the industry into a battleground for traditional financial players. As institutional compliance needs rise, Clearstream has added six new crypto asset custodianship services to meet the requirements under the MiCA framework. Although the market value of compliant euro stablecoins has doubled within a year, they still account for only 0.22% of the dollar-based market. The European Central Bank has warned about the risks associated with excessive issuance, while Bruegel is calling for relaxed liquidity restrictions. Optimism and OKX discussed compliance risk management on July 9, 2026, aiming to promote blockchain as part of financial infrastructure.

04Subsequent focus areas

Key Points for Ongoing Monitoring

1. Battles Between Federal and State-Level Legislation in the U.S.
   Pay close attention to the progress of federal legislation on crypto assets by the U.S. Congress and the conflicts arising with state-level regulations. Taking July 10, 2026, as a benchmark—when Gate US obtained a money transmission license in Florida, expanding its compliance footprint to 47 U.S. jurisdictions—any mandatory unified federal law introduced within the next 30 days that contradicts the existing 36 state licenses could lead to soaring compliance costs. This might trigger a chain reaction similar to the shutdown of AscendEX due to failure to meet standards.

2. Compliance Frameworks for Stablecoins and Jurisdictional Conflicts
   Monitor how stablecoin issuers balance “technical neutrality” with “legal obligations.” Following criminal charges filed by Wisconsin and New York states on July 9, 2026, against Circle for failing to freeze $380,000 in fraudulent assets, further actions by state judicial authorities to enforce freezes on stablecoin contract codes could risk freezing liquidity on the blockchain. It is important to watch whether leading firms like Circle adjust their technical frameworks to address such criminal allegations and prevent the escalation of compliance crises.

3. Institutional Access and Risk Spillover under the EU’s MiCA Framework
   Track the actual implementation effects of the EU’s MiCA regulations. Data from July 10, 2026, showed that the number of active addresses and new addresses on the EURC chain reached a four-year high, yet data from July 7, 2026, indicated that its market value accounted for only 0.22% of the U.S. dollar market. If the market value of compliant euro stablecoins fails to exceed 1%, coupled with warnings from the European Central Bank about excessive issuance risks, it could signal obstacles to institutional capital inflows. At the same time, be vigilant against similar risk incidents, such as millions of dollars in losses for hot wallets at other platforms due to MiCA compliance pressures, recurring elsewhere.

4. Progress in Licensing Applications for Derivatives and Prediction Markets
   Keep an eye on the approval processes as non-traditional crypto services move closer to traditional financial regulatory oversight. On July 10, 2026, Polymarket applied to the NFA for a futures commission merchant license and sought CFTC approval to amend its rules. If the CFTC rejects the request to modify the rules regarding non-collateralized trading by the end of 2026, it may force prediction market platforms like Polymarket to exit the U.S. market, leading to sharp fluctuations in related token prices and a shortage of liquidity.

05Related Reads

1. “Half a year of preparation for compliance, yet a cat triggers a 200 million dollar market value drop”
2. “Refusing to freeze assets: 380,000 people face criminal charges as the stability coin compliance crisis erupts”
3. “Valuation cut in half: Giants rush to acquire compliance licenses amid bear markets”
4. “Compliance pressures force platform closures, leaving millions in shortfall for hot wallets”
5. “Deutsche Börse’s subsidiary expands to six currencies: New path for institutional compliance under MiCA framework”
6. “Gate US gets approval from Florida, expanding U.S. compliance coverage to 47 jurisdictions”
7. “Polymarket applies for U.S. FCM license to offer compliant margin trading”
8. “Compliant DeFi gains mainstream favor: GRVT listed on Coinbase”
9. “MiCA takes effect, sparking compliance wave: EURC’s on-chain volume hits four-year high”
10. “Three major exchanges collaborate in cleanup: BONK under observation for delisting due to compliance issues”
11. “Compliance consumes innovation: How the crypto industry has become a copy of traditional finance”
12. “Compliance-related market value surges by 128%, but still can’t shake dollar dominance”
13. “Optimism and OKX discuss blockchain compliance and risk management”
14. “Compliance failures lead to shutdown: AscendEX’s withdrawal process stuck in manual review bottleneck”