Regulatory update: Alabama and West Virginia pass DUNA, CFTC sues states over prediction markets

Editor’s note: Our Regulatory Updates series highlights the latest regulatory, legal, and policy happenings relevant to the crypto industry, curated by the a16z crypto regulatory team.

Regulatory Update: March 20 – April 6, 2026

tl;dr

• Alabama and West Virginia enacted “Decentralized Unincorporated Nonprofit Association” (DUNA) legislation, which provides legal status for decentralized organizations and limited liability protections for their members and administrators. With Wyoming having adopted the DUNA two years ago, three states have now officially enacted the law.
• The CFTC filed lawsuits challenging the actions of Arizona, Connecticut, and Illinois against CFTC-registered designated contract markets and seeking to reaffirm its exclusive jurisdiction over prediction markets.
• A federal judge dismissed a crypto software developer’s lawsuit against the DOJ, which sought a declaratory judgment that the non-custodial software that he sought to publish did not require registration as a money transmitter and an injunction preventing the DOJ from bringing an action against him.
• The Department of the Treasury issued a notice of proposed rulemaking seeking public comment related to Treasury’s implementation of the GENIUS Act. The NPRM is the first regulation Treasury has proposed to implement the GENIUS Act. Comments must be received on or before June 2, 2026.

Commodity Futures Trading Commission

• The CFTC filed lawsuits challenging the actions of Arizona, Connecticut, and Illinois against CFTC-registered designated contract markets and seeking to reaffirm its exclusive jurisdiction over prediction markets.
• CFTC Chair Michael Selig launched the Innovation Task Force, which will, in partnership with the Innovation Advisory Committee, work with the Commission to develop a regulatory framework focused on: (i) crypto assets and blockchain technologies; (ii) artificial intelligence and autonomous systems; and (iii) prediction markets and event contracts.
• A federal court entered a consent order against Peken Global, a company that operates the KuCoin exchange, for allowing U.S. participants to trade directly on its electronic trading and order-matching system without registering with the CFTC as a foreign board of trade.
• A federal court entered a supplemental consent order against Nishad Singh, the former head of engineering at FTX, which imposes disgorgement of $3.7 million, requires Singh to continue cooperating with the CFTC, and imposes a five-year trading ban and an eight-year registration ban, both from the date of entry of the initial consent order.
• CFTC Director of Enforcement David Miller discussed CFTC enforcement priorities, which will include (i) insider trading (including in the prediction markets); (ii) market manipulation (particularly in the energy markets); (iii) market abuse/disruptive trading; (iv) retail fraud (including Ponzi schemes); and (v) willful violations of AML and KYC laws and rules.
• CFTC Chair Michael Selig discussed the SEC and CFTC’s new framework for clarifying which digital assets qualify as securities on Mornings with Maria.

Congress

• Senators Bill Cassidy (R-La.) and Cynthia Lummis (R-Wyo.) introduced the “Mined in America Act,” which would create a voluntary “Mined in America” certification, phase out foreign adversary-linked mining hardware, use existing federal energy and rural programs to support the transition, support domestic manufacturing of mining hardware, and codify President Trump’s Strategic Bitcoin Reserve. 
• House Representatives Max Miller (R-Ohio) and Steven Horsford (D-Nev.) released an updated version of the “Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields Act” or the “Digital Asset PARITY Act,” which would amend the Internal Revenue Code to provide for the tax treatment of digital assets.
• House Representatives Adrian Smith (R-Neb.) and Nikki Budzinski (D-Ill.) introduced the Preventing Real-time Exploitation and Deceptive Insider Congressional Trading Act, would prohibit senior government officials from trading on the outcomes of political events, policy decisions, and other government actions on prediction markets. 
• Senators John Curtis (R-Utah) and Adam Schiff (D-Cal.) introduced the Prediction Markets Are Gambling Act, which would prohibit CFTC registered entities from listing any prediction contract that resembles a sports bet or casino-style game.
• The House Financial Services Committee held a hearing titled, “Tokenization and the Future of Securities: Modernizing Our Capital Markets.”
• The House Financial Services Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence held a hearing titled “Innovation at the Speed of Markets: How Regulators Keep Pace with Technology,” featuring officials from the Federal Reserve Board, OCC, FDIC, and NCUA who discussed various topics, including digital assets. 
• Senators Elizabeth Warren (D-Mass.), Amy Klobuchar (D-Minn.), Jeff Merkley (D-Ore.), House Representatives Maxine Waters (D-Cal.) and Angie Craig (D-Minn.), and 37 other lawmakers wrote to the CFTC and the Office of Government Ethics urging the agencies to address illegal insider trading in prediction markets by federal employees.
• Senator Elizabeth Warren (D-Mass.) sent a letter to the founder and CEO of Beast Industries raising concerns about the company’s recent acquisition of Step, a financial technology app, and asking questions about its plans for Step, including in regard to crypto. Warren also sent a letter to Commerce Secretary Howard Lutnick questioning the Department’s efforts to address national security risks posed by the Chinese chip company Bitmain, a manufacturer of cryptocurrency mining hardware.
• Senator Richard Blumenthal (D-Conn.) wrote to SEC Chair Paul Atkins requesting information and records regarding recent reports that the SEC “may have exercised preferential treatment for financial partners of President Trump against the advice and warnings of senior staff.”
• House Representative Maxine Waters (D-Cal.) sent a letter to Federal Reserve Bank of Kansas City President and CEO Jeff Schmid, requesting information regarding the Kansas City Fed’s recent decision to approve a “limited purpose account” for Payward Financial, doing business as Kraken Financial.

Department of Justice

• A federal judge dismissed a crypto software developer’s lawsuit against the DOJ, which sought a declaratory judgment that the non-custodial software that he sought to publish did not require registration as a money transmitter and an injunction preventing the DOJ from bringing an action against him.
• Ten executives and employees of four different cryptocurrency financial services firms—Gotbit, Vortex, Antier, and Contrarian—were indicted for orchestrating fraud schemes to artificially inflate the trading volume and price of cryptocurrencies. 
• The DOJ charged six Chinese nationals and two Chinese pharmaceutical companies in narcotics and money laundering conspiracies involving chemical agents used to manufacture and cut fentanyl. The indictment alleges that the foreign nationals generally directed U.S. customers to pay for the cutting agents using cryptocurrency transferred to crypto wallets under their control.
• A rideshare driver from the Koreatown neighborhood of Los Angeles was charged with fraudulently obtaining more than $2 million in COVID-19 pandemic business-relief loans on behalf of his nonexistent companies, which he instead used to buy cryptocurrency. 
• A Maryland man was charged with computer fraud and money laundering in connection with his hacks of crypto exchange Uranium Finance and subsequent laundering of funds that he had fraudulently obtained through a complex series of transactions, including through Tornado Cash.
• A Pennsylvania attorney was charged with wire fraud and money laundering for a scheme in which he transferred funds from the Society for the Preservation of the Duquesne Heights Incline, where he served as President of the Board of Trustees, to his own account and then to an online crypto exchange and digital asset management platform, where he purchased and sold crypto for personal profit.

Department of Labor

• The DOL proposed a regulation that clarifies, and provides a safe harbor for, a fiduciary’s duty of prudence under the Employee Retirement Income Security Act (ERISA) in connection with selecting designated investment alternatives for a participant-directed individual account plan, including asset allocation funds that include alternative assets.

Department of the Treasury

• The Department of the Treasury issued a notice of proposed rulemaking seeking public comment related to Treasury’s implementation of the GENIUS Act. The NPRM is the first regulation Treasury has proposed to implement the GENIUS Act. Comments must be received on or before June 2, 2026.

Federal Reserve

• Federal Reserve Board Governor Michael S. Barr provided brief remarks regarding stablecoins in an address to the Federalist Society. 

Office of the Comptroller of the Currency

• Coinbase announced that it has received conditional approval from the OCC to charter Coinbase National Trust Company.

Securities and Exchange Commission

• SEC Chair Paul Atkins, CFTC Chair Michael Selig, Senator Bill Hagerty (R-Tenn.), Representative French Hill (R-Ark.), and Representative William Timmons (R-S.C.) spoke at Vanderbilt’s Inaugural Digital Assets and Emerging Tech Policy Summit.
• The SEC filed settled charges against an Oklahoma resident for allegedly making materially false and misleading representations to investors regarding two separate offerings, including a fund that was purportedly focused on trading in crypto assets, as well as a variety of securities.

State

Alabama / West Virginia

• Alabama and West Virginia enacted “Decentralized Unincorporated Nonprofit Association” (DUNA) legislation, which provides legal status for decentralized organizations and limited liability protections for their members and administrators. With Wyoming having adopted the DUNA two years ago, three states have now officially enacted the law.

New Jersey 

• The Third Circuit Court of Appeals affirmed the decision of a lower court granting Kalshi’s request to preliminarily enjoin New Jersey from enforcing its gambling laws and the state constitution’s prohibition on collegiate sports betting against Kalshi. The Court found that Kalshi’s sports-related event contracts are “swaps” under the Commodity Exchange Act and that the Act preempts New Jersey state law. 

California 

• California Governor Gavin Newsom issued an executive order that prohibits all gubernatorial appointees from using any non-public information obtained due to their public service to personally profit or assist another person in profiting from participating in predictive markets. 

International

Australia

• The Corporations Amendment (Digital Assets Framework) Bill 2025, which amends the Corporations Act 2001 (Cth) to extend the Australian financial services licence framework to digital assets, passed both houses of Parliament. The Bill has not yet received Royal Assent.
• The Federal Court ordered Oztures Trading Pty Ltd (trading as Binance Australia Derivatives) to pay a AUD 10 million pecuniary penalty after misclassifying retail investors as wholesale clients, resulting in more than $12 million in losses and fees.
• Reserve Bank of Australia Assistant Governor Brad Jones presented the key findings from Project Acacia, the bank’s “experimental project into opportunities to uplift the functioning of Australia’s wholesale markets through the tokenisation of assets and money.”

Bank for International Settlements

• The BIS released a working paper titled, “Stablecoin flows and spillovers to FX markets.”

European Union

• The ECB published a working paper titled, “Who to regulate? Identifying actors within DeFi’s governance,” which “investigates whether DAOs, as a governance mechanism, achieve meaningful decentralisation or whether power remains concentrated among a limited number of participants.”
• ECB Executive Board Member Piero Cipollone gave a speech on building the rails for Europe’s tokenized financial markets. Cipollone and ECB Executive Board Member  Frank Elderson also published a blog post on the opportunities that the digital euro provides for banks. 
• The Eurosystem published its “comprehensive payments strategy,” which includes a section on “tokenisation, distributed ledger technology and the changing settlement assets landscape.”

International Monetary Fund

• The IMF published a report on tokenized finance, which argues that “tokenization constitutes a structural shift in financial architecture rather than a marginal efficiency improvement” and discusses the risks of tokenization to global finance, among other things.

United Kingdom

• The UK issued sanctions targeting the owners and operators of a recently identified facility believed to be Cambodia’s largest scam compound, with capacity to accommodate 20,000 trafficked workers. The UK also sanctioned Xinbi, an illicit marketplace in Southeast Asia, which provides cryptocurrency-based services to scam centres.

***

The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. While taken from sources believed to be reliable, a16z has not independently verified such information and makes no representations about the current or enduring accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; a16z has not reviewed such advertisements and does not endorse any advertising content contained therein.

This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters. References to any securities or digital assets are for illustrative purposes only, and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any fund managed by a16z. (An offering to invest in an a16z fund will be made only by the private placement memorandum, subscription agreement, and other relevant documentation of any such fund and should be read in their entirety.) Any investments or portfolio companies mentioned, referred to, or described are not representative of all investments in vehicles managed by a16z, and there can be no assurance that the investments will be profitable or that other investments made in the future will have similar characteristics or results. A list of investments made by funds managed by Andreessen Horowitz (excluding investments for which the issuer has not provided permission for a16z to disclose publicly as well as unannounced investments in publicly traded digital assets) is available at https://a16z.com/investments/.

The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others. Please see https://a16z.com/disclosures for additional important information.