Americans fear crypto risks; CFPB takes crypto’s side

Americans remain deeply apprehensive of the risks surrounding digital assets, while federal agencies continue to loosen their control over the technology.

Last week, Gallup issued a survey conducted in June, indicating that 14% of respondents owned some form of cryptocurrency. While this is a higher figure than previous surveys, further near-term growth could be limited. Only 4% of respondents said they would “probably buy” crypto in the near future, while 17% said they were “intrigued, but won’t be buying soon,” and 60% said they were “not interested in ever buying.”

The bulk of crypto owners are men aged 18-49, who reported 25% ownership. That figure falls to 12% among men over 50. Women were far less likely to be owners, with only 8% of those aged 18-49 owning crypto. Slightly more women (9%) in the 50+ age demo reported owning crypto, possibly because women live longer than men and their crypto-owning husbands snuffed it, so now it’s theirs.

Despite the sector’s refrain of offering ‘financial inclusion’ to Americans lower down the socio-economic ladder, owners with household income above $90,000 were far more likely (19%) to own crypto than those with income under $48,000 (9%).

Crypto’s reputation for risk is well recognized even among its biggest fans. A majority (55%) of 18-49 men consider cryptocurrency “very risky,” a view that rises to 63% among those with a household income over $90,000. Even among confirmed investors, the view of crypto as very risky is a solid 64%, four points higher than Gallup’s 2021 survey.

There’s a distinct partisan divide in how crypto’s risks are viewed, with 45% of Republicans finding it very risky, compared with 54% of independents and 66% of Democrats.

Only 4% of respondents cited crypto as the best long-term investment in a separate survey from May. Real estate (37%) was the most popular option, followed by gold (23%) and stocks (16%). The crypto figure was essentially unchanged from 2024, although it was half the 8% recorded just prior to the onset of frauds and bankruptcies that brought on ‘crypto winter’ in mid-2022.

SEC being in-kind to ETFs

On July 28, the Securities and Exchange Commission (SEC) announced that it was delaying a decision on whether to approve a BTC spot-based exchange-traded fund (ETF) application by Trump Media & Technology Group (TMTG). The parent company of the Truth Social platform filed its application in June, one of three crypto-focused ETF applications that TMTG has filed to date.

Lest anyone read anything more into this, the SEC’s delaying decisions is par for the course. The same day saw the SEC put off its decision on a Grayscale application for a SOL-based ETF until October 10. TMTG is only being asked to cool its jets until September 18.

However, on July 29, the SEC made many more crypto ETF fans happy as it announced that it had approved “in-kind creations and redemptions by authorized participants” of BTC and ETH-based crypto ETF shares. These ETFs were previously limited to creation/redemption on an in-cash basis but can now skip the conversion-to-cash step.

SEC Chair Paul Atkins claimed it was “a new day at the SEC” and “investors will benefit from these approvals, as they will make these products less costly and more efficient.” The SEC continues “to build a rational regulatory framework for crypto, leading to a deeper and more dynamic market, which will benefit all American investors.”

As Bloomberg’s Senior ETF Analyst Eric Balchunas noted, the change only impacts authorized participants (aka market-makers and other large institutions), so it “doesn’t mean retail can exchange [a BTC ETF] for actual bitcoin … more of a plumbing fix. It just makes the pipes a little better.” Since every other type of ETF already enjoys in-kind options, Balchunas says the decision “shows that this SEC is ready to treat crypto like legit asset class. That’s the biggest takeaway imo”

Balchunas’ colleague James Seyffart added his view that “the coming approvals for alt coin ETFs likely going to allow in-kind from the get go. More movement in right direction IMO”

In other actions, the SEC voted to approve “other orders that advance a merit-neutral approach to crypto-based products, including exchange applications seeking to list and trade an [ETF] that would hold mixed spot bitcoin and spot ether.” TMTG has filed an application to offer a BTC/ETH ETF, plus another that comprises BTC, ETH, SOL, CRO, and XRP.

The SEC also approved a 10x increase on the position limit of BlackRock’s (NASDAQ: BLK) iShares Bitcoin Trust ETF, boosting the number of contracts from 25,000 to 250,000. Blackrock sought the boost in January, arguing for parity with other commodity-based ETFs, including the ProShares Bitcoin Strategy ETF.

Back to the top ↑

CFPB re-rethinks open banking rule

On July 29, the Consumer Financial Protection Bureau (CFPB) filed a motion in federal court requesting a stay in the lawsuit filed last year by the banking sector challenging the CFPB’s implementation of its open banking rule. Judge Danny Reeves of the U.S. District Court Judge for the Eastern District of Kentucky’s Lexington Division granted the stay.

The open banking rule, which allowed consumers greater freedom to transfer their personal data between financial providers, was approved during President Biden’s administration. However, the Trump administration announced plans to repeal the “arbitrary and capricious” rule this spring because they believed its scope exceeded the CFPB’s authority.

Earlier this month, Wall Street bankers JPMorgan (NASDAQ: JPM) announced they would impose fees on third-party data aggregators that serve as bank-to-fintech bridges. The aggregators warned that the fees could amount to hundreds of millions of dollars per year, costs that would almost certainly be passed on to their fintech clients, including crypto operators.

Aggregator, fintech, and crypto industry associations sent a joint letter to President Trump asking him to intervene. Trump was urged to lean on the CFPB to file a motion telling the court it had changed its mind on scrapping the rule. That motion had to be filed by July 29, and it looks like Trump heard their plea.

The Financial Technology Association (FTA) issued a celebratory tweet-thread rather obviously stating that “we do not oppose the CFPB’s motion to stay this litigation,” adding that the FTA “intend to participate in the rulemaking process” to ensure it gets the result it seeks.

The Blockchain Association tweeted its victory lap, applauding the CFPB’s “decision to request a stay in this open-banking litigation and reconsider the rule.”

Back to the top ↑

Conflicts of interest behind Quintenz’s CFTC confirmation delays?

July 28 marked the second Monday in a row that the Senate Agriculture Committee scheduled and then cancelled a hearing to approve Brian Quintenz as Trump’s nominee for Commodity Futures Trading Commission (CFTC) chairman. With the Senate starting its summer break on August 4, and the CFTC currently down to a skeleton crew of two (out of its usual five) commissioners, the delays were more than a little puzzling.

Committee Chair John Boozman (R-AR) told reporters that the White House asked the committee to “not go forward” with the nomination hearing, but didn’t explain. However, a July 26 post on The Closing Line blog suggests there might be concerns over conflicts of interest involving the CFTC-registered Kalshi prediction market site, on whose board of directors Quintenz currently sits.

The Closing Line’s Dustin Gouker filed a Freedom of Information Act (FOIA) request that produced a June 18 email sent by Kevin Webb—who is expected to serve as Quintenz’s chief of staff post-confirmation—to the CFTC’s acting general counsel.

Webb asks the counsel to “contact Brian via his gmail address to schedule a briefing on the confidential matters you were unable to discuss with me yesterday?” The matters include “seriatims in circulation,” a reference to issues the CFTC considers and votes on without holding a formal/public meeting.

Webb also asks the counsel about a “list of open applications,” which Gouker believes could include licenses/registrations for designated contract markets (DCM), the formal category for prediction markets like Kalshi, as well as rivals PolyMarket and PredictIt.

Polymarket recently announced plans to return to U.S. shores despite a $1.4 million settlement with the CFTC in 2022 for offering unregistered products to U.S. customers. Polymarket achieved this turnaround via a $112 million deal for QCEX, a CFTC-registered derivatives exchange and clearinghouse. At the time of Webb’s email, QCEX’s application with the CFTC for a DCM permit was still pending, but was approved earlier this month.

A July 15 email from Quintenz to the CFTC’s general counsel includes a link to a Bloomberg article detailing PredictIt’s plans to expand the number of people allowed to wager on any one betting market, as well as the dollar amount each of those customers is allowed to wager. Quintenz asks, “If the thrust of this report is accurate and if so, by what method […] this result was achieved?”

Gouker notes the “potential ethics concerns” raised by these emails, including “whether Quintenz should be asking for or receiving some of this information, given the fact that he’s still a member of Kalshi’s board.” Quintenz has promised to step down from the board once confirmed. (Kalshi’s board also contains one Donald Trump Jr.)

Crypto in America journo Eleanor Terrett tweeted Tuesday that the blog post was “said to be making the rounds on [Capitol Hill] and in crypto lobbying circles today.” Terrett couldn’t say whether the blog “influenced the White House’s Monday decision, but there’s speculation on the Hill that it may have been a contributing factor.”

The White House stated Monday that Quintenz was still its nominee to lead the CFTC. It’s possible that President Trump is considering waiting until the Senate has gone home to make a recess appointment, thereby sparing Quintenz the need to answer any potentially embarrassing questions.

Back to the top ↑

Crypto mortgage legislation

While Senate Democrats want to know more about the Trump administration’s plans to allow homebuyers to use digital assets as collateral for mortgages, Sen. Cynthia Lummis (R-WY) is pushing to enshrine this plan into law, thereby ensuring it can’t be overturned by future administrations.

On July 29, Lummis announced the new 21st Century Mortgage Act, which would require government-sponsored enterprises like Fannie Mae and Freddie Mac “to consider digital assets when assessing single-family mortgage eligibility.”

While the bill’s text has yet to be released, Lummis claims it would direct Fannie/Freddie to “include digital assets recorded on a cryptographically-secured distributed ledger as part of their mortgage risk assessments for single-family home loans. This bill would prohibit forcing the conversion of these assets into dollars, respecting the nature of digital wealth.”

Lummis claims her bill “embraces an innovative path to wealth-building keeping in mind the growing number of young Americans who possess digital assets.” Lummis further claims that 21% of U.S. adults own some digital assets, a significant inflation compared to Gallup’s numbers.

Back to the top ↑

Emmer to Senate: approve House market structure bill already

Lummis was among the co-authors of the Senate Banking Committee’s discussion draft of its digital market structure legislation, which made its debut last week and on which senators have been asked to submit “feedback and legislative solutions” by August 5. The Senate Agriculture Committee is expected to release its draft at some point in the not-too-distant future, after which the bills will need to be combined, debated, and voted out of committee(s).

The House of Representatives approved its market structure bill (CLARITY Act) earlier this month. The Senate Banking Committee said its discussion draft “builds on” CLARITY but also wanted to ‘strengthen’ and ‘expand on’ CLARITY’s positions.

House Majority Whip Tom Emmer (R-MN) recently told Decrypt that his chamber “has years of work on this topic,” while the Senate “hasn’t had the same time, even those very talented senators interested in this.” Given the White House’s deadline of September 30 for getting market structure legislation onto Trump’s desk for signing, Emmer suggested senators should choose expediency over pride.

Emmer said that as senators get deeper into the market structure weeds, “they’re going to realize the amount of time and attention that’s been spent on the CLARITY Act. And I do believe they will bring it up, vote on it, and send it back” to the House for final approval.

Emmer said he had no issues with the Senate making “adjustments or improvements” to CLARITY, but starting from legislative scratch would unnecessarily delay the process. The threat of public scolding from Trump could also accelerate the process, as the House chose to adopt the Senate-approved stablecoin bill (GENIUS Act) despite many representatives preferring the House’s own STABLE Act.

Back to the top ↑

Watch: Breaking down solutions to blockchain regulation hurdles

title=”YouTube video player” frameborder=”0″ allow=”accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share” referrerpolicy=”strict-origin-when-cross-origin” allowfullscreen>