Paxos Trust Company, the issuer behind PayPal's stablecoin PYUSD, has applied for a national trust bank charter from the U.S. Office of the Comptroller of the Currency . This move aims to enhance Paxos' ability to hold and manage assets and settle payments more efficiently, though it will not permit the company to take deposits or issue loans like traditional banks. Transitioning from a New York state-limited trust charter to a federal charter would provide Paxos with stronger regulatory oversight. This application marks Paxos' second attempt after its initial application stalled in 2023. Competitors such as Circle and Ripple have also recently applied for national trust charters, while Anchorage Digital remains the only crypto platform with such a charter. The trend follows the enactment of a new law regulating stablecoins, signed by President Trump, reflecting the increasing mainstream integration of digital assets. Paxos had previously ceased issuing Binance USD after regulatory orders and recently settled with New York authorities for $48.5 million over compliance failures related to its former partner Binance. The shift toward national charters aligns with growing regulatory clarity and the crypto industry’s significant lobbying efforts.
In a significant development within the crypto industry, World Liberty Financial, a venture backed by former President Donald Trump and his sons, has announced a $1.5 billion crypto treasury initiative. This initiative is in collaboration with Nasdaq-listed ALT5 Sigma Corporation, a Las Vegas-based blockchain company. The deal involves ALT5 selling $1.5 billion in shares, with half of the proceeds paid in World Liberty’s cryptocurrency, $WLFI. The remaining funds will be utilized to purchase more $WLFI, settle litigation, pay debts, and fund other activities. The company aims to bridge traditional finance with digital assets and has previously launched both $WLFI and a stablecoin, USD1. This move underscores the Trump administration’s strong support of the crypto industry, including actions such as appointing favorable regulators, dismissing lawsuits, and encouraging financial institutions to embrace digital assets. President Trump, listed as the “co-founder emeritus” of World Liberty Financial, reportedly earned $57 million in fees from the company. His sons, along with Alex and Zach Witkoff, are also co-founders. As part of the deal, Zach Witkoff will chair ALT5, and Eric Trump will join its board. Following the announcement, ALT5 shares rose 2.5%, having climbed over 30% in the past week.
In legal news, Do Kwon, co-founder of Terraform Labs, is expected to plead guilty to U.S. fraud charges related to the collapse of the TerraUSD and Luna cryptocurrencies, which resulted in an estimated $40 billion in losses in 2022. Initially pleading not guilty, Kwon may now change his plea, according to a scheduling order issued by U.S. District Judge Paul Engelmayer. A hearing has been scheduled for Tuesday at 10:30 a.m. EDT in Manhattan federal court. Kwon faces a nine-count indictment, including securities fraud, wire fraud, commodities fraud, and conspiracy to commit money laundering. Neither his legal team nor the Manhattan U.S. Attorney's office provided an immediate comment.
In regulatory developments, Bo Hines, head of President Donald Trump’s Council of Advisers on Digital Assets, announced his resignation and return to the private sector. Hines played a central role in shaping the administration’s approach to cryptocurrency regulations, leading a working group that recently advised on market-defining crypto legislation and urged the U.S. Securities and Exchange Commission to draft dedicated rules for digital assets. His appointment was a key part of Trump’s initiative, launched shortly after assuming office in January, to reform U.S. crypto policy in line with campaign promises. During his tenure, Hines supported the GENIUS Act, which Trump signed into law, establishing a regulatory framework for stablecoins, potentially enabling them to be used for everyday transactions. In his departure message on X, Hines praised the collaboration with AI & Crypto Czar David Sacks, who also commended Hines’ contributions. Hines previously ran twice unsuccessfully for Congress in North Carolina.
These developments highlight the dynamic and evolving landscape of the cryptocurrency industry, encompassing regulatory shifts, legal proceedings, and significant financial initiatives. As the sector continues to mature, stakeholders are closely monitoring these events to gauge their potential impact on the broader financial ecosystem.
