Last week, digital assets moved from the fringe to the legislative forefront. With a flurry of activity on Capitol Hill and new guidance from the Securities and Exchange Commission (SEC), July 2025 will be remembered as a turning point for U.S. crypto policy.

Lawmakers and regulators are, for the first time, speaking with a degree of clarity that could reshape how private fund managers, RIAs and other market participants engage with digital assets. As policymakers sharpen their focus, compliance professionals must begin evaluating how this evolving landscape could impact fund operations, investment strategies, compliance programs and disclosure obligations.

A Landmark Moment: The GENIUS Act Is Now Law

On July 18, 2025, President Trump signed the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins) into law, marking the first time the United States has enacted federal legislation focused on crypto assets. This bipartisan measure passed both chambers of Congress with overwhelming support and now establishes a foundational framework for regulating stablecoins.

You might be asking yourself what all of this means. In short, the GENIUS Act grants regulatory oversight to state-chartered trust companies while introducing federal standards designed to legitimize stablecoins as mainstream financial products. Among its key provisions include:

• A requirement for 1:1 U.S. dollar reserve backing
• Mandatory redemption rights and independent audits
• A federal charter pathway for qualified stablecoin issuers

This legislation is expected to bring long-sought regulatory certainty to a space that has often operated in a legal gray zone. For fund managers utilizing stablecoins in trading strategies, cash management or cross-border payments, the act provides a clearer compliance roadmap – a long-overdue and much-needed step forward in digital asset regulation.

Other Key Legislative Developments

In addition to the GENIUS Act, two other major crypto-related bills advanced in the House last week:

• The CLARITY Act (Crypto Legal Clarity Act) – This bill aims to codify the distinction between crypto tokens and investment contracts, limiting the SEC’s jurisdiction over certain transactions in the secondary market. If enacted, it would:

• • Affirm that a token is not inherently a security
  • Reduce regulatory uncertainty for trading platforms and investors
  • Draw clearer boundaries between the SEC and the Commodity Futures Trading Commission (CFTC)

The CLARITY Act passed the House with more bipartisan support than anticipated (294-134), including 78 Democrats. It now heads to the Senate, where it faces a more challenging path, but its strong showing suggests a real possibility of becoming law this year.

• The Anti-CBDC Surveillance State Act – This bill would prohibit the Federal Reserve from issuing a central bank digital currency (CBDC) to individuals or using it to implement monetary policy. Lawmakers behind the bill cite concerns over:
  • Government overreach and personal financial surveillance
  • Disruption to traditional banking channels
  • Increased centralization of financial infrastructure

Though politically divisive, as evidenced by the bill’s narrower passage (219-210), progress reflects rising skepticism around the role of centralized digital currencies in a free-market system.

While Congress advances structural reforms through legislation, the SEC continues to shape the regulatory landscape through guidance, commentary and disclosure expectations.

SEC Guidance: Tokenization and Crypto ETPs Under the Microscope

While Congress focuses on legislation, the SEC is simultaneously refining its regulatory approach through staff guidance and public statements. Two recent developments provide insight into how the Commission is approaching tokenized securities and crypto exchange-traded products (ETPs).

• Commissioner Peirce on Tokenized Securities – On July 9, Commissioner Hester Peirce issued a statement cautioning that blockchain-based innovation does not exempt issuers from securities law. Her key points include:

• • Tokenized securities remain subject to existing federal securities laws
  • Tokens representing off-chain securities introduce legal and counterparty risks
  • Synthetic products or tokenized “receipts” could be classified as separate securities or even security-based swaps
  • Market participants should proactively engage the SEC to explore exemptions and modernizations

Commissioner Peirce described tokenization as “enchanting, but not magical,” reinforcing the notion that while innovation is encouraged, regulatory compliance is non-negotiable.

• SEC Staff on Crypto ETP Disclosures – On July 1, the SEC’s Division of Corporation Finance released a detailed statement outlining disclosure expectations for issuers of crypto ETPs. These are listed products that track crypto or derivative markets. Key disclosure considerations include:

• • Volatility, security risks, and potential for market manipulation of the underlying asset
  • Custody arrangements, including wallet infrastructure and private key storage protocols
  • On-chain or off-chain creation and redemption mechanics
  • The roles and potential conflicts of interest of sponsors, custodians, and authorized participants
  • Methodologies for calculating net asset value (NAV) and price benchmarks, especially in fragmented or illiquid markets
  • Material agreements with service providers must be filed as exhibits in registration statements

While this guidance applies specifically to ETP issuers, it signals the SEC’s heightened expectations around transparency, control infrastructure and counterparty risk across all crypto-related investment products.

Additionally, although crypto ETPs have thus far been limited to Bitcoin and Ethereum, recent filings indicate a push toward broader asset inclusion, with applications now pending for Solana, XRP, DOT, and SUI products. There is also growing speculation that staking will be permitted in future ETPs, following recent indications that staking on proof-of-stake protocols may not, in itself, constitute a securities transaction. As such, this guidance could be viewed as a signal that the SEC is beginning to prepare a path to compliance for a wide array of new crypto ETPs including both new assets and new features.

What Does All of This Mean for Fund Managers? 

The events of last week represent a fundamental shift in how digital assets will be regulated, supervised and adopted across financial markets. For fund managers and other institutional investors, the implications are both immediate and long term.

Stablecoins may now be viewed as more viable components of investment and operational strategy. Tokenization is no longer experimental — it is on the regulatory radar and will demand rigorous legal and compliance oversight. And as more crypto exchange-traded products (ETPs) emerge, fund managers will need to sharpen their understanding of pricing mechanics, disclosure obligations, compliance requirements and custody options.

Meanwhile, jurisdictional boundaries between the SEC and CFTC are beginning to take form, which may reduce regulatory overlap but will also make compliance expectations more specific and enforceable in the future.

In light of these exciting developments, fund managers and compliance professionals should take immediate steps to ensure their programs are aligned with this rapidly evolving regulatory environment.

Silver’s Take: Next Steps for Compliance Officers and Fund Leaders 

As the regulatory framework becomes more defined, now is the time for firms to assess how their current policies align with emerging expectations. Silver recommends that Chief Compliance Officers and fund managers consider the following immediate actions:

• Review digital asset policies to ensure they reflect the relevant implications of the passage of the GENIUS Act and the SEC’s latest guidance on tokenized securities and ETPs
• Evaluate counterparty and custody arrangements for any digital asset exposure to ensure compliance with federal securities laws and internal control standards
• Conduct a risk-based assessment of any use of stablecoins or tokenized products in fund operations, with particular attention to auditability, redemption mechanics, and liquidity
• Ensure clear documentation for how digital assets are valued, held, and disclosed, including material contract review and disclosure mapping
• Engage legal and compliance counsel to determine whether certain activities or investment products may trigger swap registration or cross-jurisdictional requirements

Firms that act now will be better positioned to mitigate regulatory risk, capitalize on market innovation and demonstrate credibility to investors and regulators alike now and into the future. 

Silver Is Here to Help

Silver Regulatory Associates partners with fund managers to build resilient, forward-looking compliance programs that meet the demands of today’s evolving digital asset ecosystem.

For specific recommendations on how to enhance, update or adapt your firm’s compliance framework in light of these developments, contact our Compliance Team at [email protected]. 

Silver remains your trusted compliance partner, helping you navigate these critical regulatory and policy shifts with clarity and confidence.