Quantum Updates 45 | May 2025

Swiss Financial Regulator FINMA Launches New Risk-Based Supervisory Structure from 01 April 2025 to Address Emerging Financial Threats

On 1 April 2025, the Swiss Financial Market Supervisory Authority (FINMA) implemented a structural reorganisation to strenthen its risk-based supervision across banking, insurance, and asset management sectors. The changes include a new cross-divisional risk unit, restructured supervisory divisions, and strengthened policy and digital oversight—all aimed at bolstering FINMA’s capacity to respond to systemic financial threats, cyber risks, and market volatility through more intensive and proactive regulation.

• FINMA established a new division, Integrated Risk Expertise (GB-I), to oversee financial and non-financial risks including liquidity, capital adequacy, AML, credit exposures, and sustainable finance. The unit also assumes leadership of on-site supervisory reviews and is led by Marianne Bourgoz Gorgé.
• The FINMA Markets and Asset Management divisions have been merged to create a streamlined supervisory entity responsible for market infrastructures and investment managers, now under the leadership of Executive Board member Léonard Bôle.
• A new Chief Risk Officer (CRO) role has been introduced to ensure unified risk coordination across FINMA’s supervisory and operational arms, standardising practices across sectors.
• Policy and legal functions have been consolidated under a single Supervisory Policy and Legal Expertise Division (GB-S), reinforcing FINMA’s strategic and legislative oversight capacity.
• Responsibility for digitalisation, fintech, and regtech supervision has been integrated into the Operations Division (GB-O), enabling faster regulatory response to technological innovation.

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UK FCA and China Advance Bilateral Financial Regulation: New MoU, Wealth Connect, and Green Finance Alignment Announced at London Dialogue

On 8 May 2025, at the Caixin Media’s London Atlantic Dialogue, the United Kingdom Financial Conduct Authority (UK FCA) and the People’s Republic of China announced the expansion in bilateral financial regulatory cooperation. In a speech delivered by UK FCA Chair Ashley Alder, both countries agreed to a new legal architecture under a Memorandum of Understanding (MoU) with China’s National Financial Regulatory Administration, a proposed China-UK Wealth Connect platform, and deepened alignment on green finance disclosures with the International Sustainability Standards Board (ISSB).

• The UK FCA is finalising a formal MoU with China’s financial regulator to establish legal mechanisms for supervisory coordination, secure cross-border information sharing, and enforceable oversight over firms operating in both jurisdictions.
• The MoU addresses regulatory concerns around data localisation, market conduct, and cross-border compliance, providing a legal foundation for cooperative supervision between the UK and China.
• A China-UK Wealth Connect scheme was announced to provide Chinese retail investors with regulated access to UK-managed funds and open China’s pension and wealth market to UK-based asset managers under FCA oversight.
• This China-UK Wealth Connect scheme supports financial integration strategies in both markets, responding to demographic pressures and reforming pension systems through regulated cross-border financial advice and investment flows.
• On sustainable finance, Alder reaffirmed the UK FCA’s alignment with ISSB standards and welcomed China’s parallel efforts, including the Bank of China’s involvement in the Taskforce on Nature-related Financial Disclosures.
• China’s issuance of a sovereign green bond on the London Stock Exchange was acknowledged as a step in legal and institutional ESG convergence between the two jurisdictions.
• Ongoing progress under the Stock Connect Programme was discussed, with increased Chinese secondary listings and ETF issuance in London reflecting confidence in the UK’s reformed capital markets regime.
• The UK FCA pledged continued cooperation with HM Treasury and Chinese authorities to remove technical barriers to full capital flow interoperability and expand dual-market access.
• UK FCA Chair Ashley Alder stated that long-term regulation and trust must be grounded in multilateral legal diplomacy, calling on China to remain an active participant in the Financial Stability Board (FSB) and IOSCO to help shape the rules of global finance.

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US SEC’s Settlement with Ripple Sparks Internal Dissent: Commissioner Crenshaw Warns of “Regulatory Collapse” in Crypto Enforcement

On 8 May 2025, the United States Securities and Exchange Commission (US SEC) published a statement of dissent by Commissioner Caroline A. Crenshaw condemning the US SEC’s controversial settlement with Ripple Labs, Inc. The agreement, which vacates a previously secured injunction and returns USD 75 million to Ripple from escrow, drew sharp internal criticism for reversing the momentum of the US SEC’s crypto enforcement programme despite an unaltered legal framework.

• In 2024, the US SEC won a federal ruling that held Ripple’s institutional XRP sales violated Section 5 of the Securities Act of 1933, resulting in a civil penalty exceeding USD 125 million and a permanent injunction.
• Under the May 2025 settlement, Ripple will recover USD 75 million and the injunction has been vacated without any new statutory compliance or governance commitments.
• Commissioner Crenshaw warned that this reversal signals a programmatic retreat from crypto enforcement and undermines the binding nature of judicial decisions already in the Commission’s favour.
• Crenshaw described the settlement as a “tremendous disservice to the investing public,” stating it leaves the US SEC unable or unwilling to prevent Ripple from resuming unregistered XRP sales.
• She pointed to recent enforcement withdrawals in other high-profile crypto cases involving Coinbase, Dragonchain, and Ian Balina as part of an emerging “enforcement vacuum.”
• The dissent criticised the notion that these retreats are justified by the anticipated policy direction of the US SEC’s new Crypto Task Force, calling it speculative and legally insufficient.
• Crenshaw further elaborated that the governing US securities law under which Ripple was adjudicated remains unchanged, and that future regulatory frameworks cannot retroactively rewrite past violations.
• She warned that the reversal of position by the US SEC damages the credibility of US SEC counsel in ongoing litigation and violates the administrative law doctrine of regularity, which presumes consistent and justified governmental action.
• The dissent questioned whether the Ripple ruling now retains any enforceable effect and accused the Commission of creating market uncertainty around XRP’s legal status and investors’ disclosure rights.
• Crenshaw concluded with a call for judicial oversight, urging courts to scrutinise the US SEC’s conduct and resist what she termed an internal dismantling of the US SEC’s statutory enforcement responsibilities.

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US SEC’s Mark Uyeda Calls for Regulatory Clarity on Real-World Asset Tokenisation: “We Cannot Regulate Innovation in the Dark”

On 12 May 2025, United States Securities and Exchange Commission (US SEC) Commissioner Mark T. Uyeda delivered a keynote address at the Crypto Task Force Roundtable in Washington, D.C., calling for transparent and adaptive regulatory frameworks to govern the tokenisation of real-world assets. In his remarks titled “Tokenisation of Real-World Assets,” Commissioner Uyeda urged the US SEC to shed outdated regulatory constraints and engage proactively with market participants to ensure innovation in blockchain-based finance is not stifled by legal uncertainty.

• Defined tokenisation as the digital representation of traditionally illiquid real-world assets—such as real estate or intellectual property, on decentralised ledgers, enabling programmable ownership, transparency, and efficient transfer.
• He emphasised the transformative potential of blockchain infrastructure in modernising capital markets by enhancing liquidity, reducing transaction costs, and streamlining compliance.
• Acknowledging that current US SEC rules were built for paper-era securities, Uyeda warned that applying legacy regulation to blockchain assets without adaptation leaves market participants vulnerable to regulatory ambiguity.
• Drawing parallels to prior technological transitions, such as the shift from paper certificates to digital recordkeeping, he framed tokenisation as the next logical step in the evolution of market infrastructure.
• Criticising the regulatory opacity that continues to surround issuance, settlement, and trading of tokenised assets, particularly under frameworks like Regulation NMS that may not suit decentralised models.
• He identified the primary challenge as the absence of clear, tailored guidance from the US SEC on how core securities law obligations apply to onchain assets.
• Uyeda advocated for the US SEC to adopt a principle-based regulatory model that outlines critical safeguards without imposing overly prescriptive rules, enabling flexibility and legal certainty.
• He supported the ongoing work of the US SEC’s Crypto Task Force, led by Commissioner Hester Peirce, in building a “crypto rulebook” to address compliance standards for tokenised financial products.
• Uyeda called for expanded dialogue with issuers, platforms, investors, and developers through structured forums like roundtables to inform a rulemaking process grounded in practical experience.
• He stated that blockchain’s inherent transparency and programmability could reduce compliance burdens, mitigate operational risk, and broaden access to capital markets.
• Highlighting emerging use cases, such as tokenised real estate and intellectual property, he discussed the importance of verifiable ownership and efficient settlement as drivers of future financial architecture.
• Concluding that regulatory clarity is essential for safeguarding investors while unleashing the full economic benefits of tokenisation, asserting that “we cannot regulate innovation in the dark.”

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Tokenisation: A Field of Dreams or Regulatory Misstep? US SEC’s Caroline Crenshaw Cautions Against Hasty Blockchain Integration in Securities Markets at Tokenisation Roundtable

On 12 May 2025, United States Securities and Exchange Commission (US SEC) Commissioner Caroline A. Crenshaw delivered a cautionary speech at the US Crypto Task Force Roundtable in Washington, D.C., entitled “Tokenisation: Our Field of Dreams?” Framing her remarks through the lens of the iconic film, Crenshaw questioned whether the anticipated benefits of blockchain-based tokenisation will materialise, warning against speculative overhauls of core market infrastructure without rigorous technological and regulatory validation.

• Commissioner Caroline A. Crenshaw challenged the foundational premise of tokenisation, citing lack of definitional clarity around whether it entails direct blockchain issuance, digital representations, or lifecycle-wide applications of blockchain in securities markets.
• She warned that the push for instant settlement (T+0) via tokenisation threatens to erode essential market protections supported by the existing T+1 cycle, including trade netting, liquidity optimisation, and time-sensitive compliance procedures.
• Commissioner Caroline A. elaborated on technological constraints of permissionless blockchains, such as scalability limitations and latency that make them impractical for high-volume securities transactions, including those involving large-cap equities.
• She also questioned the marginal difference between private blockchain networks and traditional databases, calling into doubt the necessity of regulatory reforms aimed at accommodating unproven infrastructure.
• Drawing attention to the limited real-world adoption of tokenisation, she pointed out that blockchain’s use in registered securities remains niche, with minimal retail penetration across U.S. households.
• Crenshaw critiqued the notion of building new regulatory frameworks around the assumption that market participants will adapt en masse, urging that policy be rooted in evidence, not optimism.
• She called for a technology-neutral approach, warning against regulatory favouritism toward blockchain over other forms of digital ledger technologies.
• Crenshaw identified serious risks to retail investor protections, including the loss of deferred payment windows and the undermining of compliance checkpoints that currently operate within the existing settlement cycle.
• She cautioned that tokenisation’s potential disruption to netting mechanisms which reduce trade volumes by 98% and could increase systemic risk, raise costs, and reduce liquidity. Rather than prescribing immediate rule changes, Crenshaw advocated for rigorous scrutiny of tokenisation’s scalability, security, and actual value relative to current systems.
• Crenshaw concluded by reiterating the need for stakeholder engagement and careful assessment before restructuring the foundations of securities markets, warning that building a “field of dreams” without proving its viability first risks doing more harm than good.

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Tokenisation Takes Centre Stage: US SEC Commissioner Hester Peirce Champions Regulatory Clarity for Tokenised Smart Assets at US SEC Crypto Roundtable on Tokenisation

On 12 May 2025, United States Securities and Exchange Commission (US SEC) Commissioner Hester M. Peirce delivered a forward-looking speech at the agency’s fourth Crypto Task Force Roundtable in Washington, D.C., titled “Getting Smart – Tokenisation and the Creation of Networks for Smart Assets.” Commissioner Hester M.Peirce outlined a regulatory vision for integrating tokenised versions of traditional securities into blockchain ecosystems and called for a modernised, legally coherent framework that supports innovation while preserving investor protection.

• Commissioner Peirce highlighted the transformative potential of tokenisation, which reimagines traditional securities like stocks and bonds as programmable crypto assets on decentralised blockchain networks.
• She compared tokenisation to the internet’s impact on communication, describing crypto protocols and smart contracts as the building blocks of a more efficient and accessible financial system.
• Commissioner Hester M.Peirce underscored that smart contracts can automate key functions such as dividend distributions and collateral management, and integrate seamlessly with decentralised finance (DeFi) applications.
• Despite its promise, tokenisation faces significant legal uncertainty within the US SEC framework, particularly concerning transfer agent obligations, custody rules, and the treatment of crypto networks as official books and records.
• She cited ambiguity under the Securities Exchange Act regarding whether a blockchain network can serve as the master securityholder record under current transfer agent regulations.
• The Special Purpose Broker-Dealer statement has, according to Peirce, created confusion around custody by broadly defining “crypto asset security,” leaving broker-dealers unclear about their custodial responsibilities.
• Proposed amendments to the Advisers Act custody rule risk excluding tokenised securities from exemptions if issued on permissionless blockchains, further complicating the treatment of tokenised mutual fund shares and private assets.
• Commissioner Hester M.Peirce urged the US SEC to apply regulatory parity—treating tokenised securities the same as traditional ones unless a legal or technological distinction necessitates differential treatment.
• She proposed clarifying that crypto networks may legally serve as issuer books under state law and that transfer agents should be able to leverage blockchain protocols as recordkeeping infrastructure.
• Commissioner Hester M.Peirce called for a revision of the Special Purpose Broker-Dealer framework to allow firms to custody tokenised assets without undue restriction and endorsed updates to the custody rule to ensure tokenised securities retain eligibility for standard regulatory exemptions.
• She advocated for a shift from enforcement-driven regulation to proactive rulemaking which can be led by public consultation and Crypto roundtables engagement to address operational barriers and legal uncertainty.
• Commissioner Hester M.Peirce framed tokenisation as a next-generation financial protocol capable of converting traditional instruments into composable, programmable digital assets enhancing transparency, operational efficiency, and investor access across capital markets.

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US SEC Chairman Paul S. Atkins Signals Regulatory Reset for Tokenised Securities at Crypto Task Force Roundtable

On 12 May 2025, United States Securities and Exchange Commission (US SEC) Chairman Paul S. Atkins delivered a keynote address at the US Crypto Roundtable on “Tokenisation – Where TradFi and DeFi Meet” roundtable, hosted at US SEC Headquarters in Washington, D.C. In the statement, Chairman Atkins announced a shift from enforcement-first regulation to structured, rules-based policymaking, along with charting a clear roadmap for integrating tokenised securities into the United States financial system.

• Chairman Atkins described tokenisation as a technological inevitability akin to the digitisation of music, asserting that securities markets must adopt blockchain infrastructure through a purpose-built legal regime.
• He affirmed that under his leadership, the US SEC will prioritise clarity, competitiveness, and innovation, in line with President Trump’s vision of positioning the United States as the global centre for crypto finance.
• The newly established US Crypto Task Force, led by Commissioners Mark Uyeda and Hester Peirce, was commended for fostering internal US SEC collaboration and dismantling regulatory silos.
• On issuance, Atkins criticised the inefficiency of the current framework, highlighting that only four crypto issuers have completed registered offerings. He committed to pursuing safe harbours, customised disclosure frameworks, and statutory clarity under the US Securities Act of 1933 to facilitate compliant token launches.
• On custody, he called for recognition of self-custody models, rollback of restrictive interpretations such as those under US SAB 121, and a complete overhaul of the Special Purpose Broker-Dealer (SPBD) regime to allow flexible, technology-driven custody solutions.
• On trading, Atkins expressed strong support for “super apps” and integrated crypto platforms. He urged reform of the Alternative Trading System framework to permit seamless trading of both securities and non-securities, and pledged to explore exemptive relief to modernise exchange access.
• Atkins stated that nothing in existing US law prevents Alternative Trading Systems from facilitating non-security trades, and stated his intention to open up national securities exchanges to a broader spectrum of crypto asset listings.
• He concluded by affirming the US SEC’s intention to work with Congress and the Executive Branch to define a crypto-positive regulatory regime that would make the United States the most attractive and secure jurisdiction for tokenisation and digital asset finance.
• Through his remarks Chairman Atkins’ wishes to establish a strategic pivot toward institutionalising tokenised markets within the federal regulatory perimeter, signalling a deep recalibration of SEC priorities in favour of regulatory precision, optionality, and innovation enablement.

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US CFTC’s Energy and Environmental Markets Advisory Committee to Review Reports on Energy Transition and Infrastructure on 28 May 2025

On 13 May 2025, the United States Commodity Futures Trading Commission (US CFTC) announced that the division of Energy and Environmental Markets Advisory Committee (EEMAC) will hold a virtual public meeting on 28 May 2025 from 12:00 p.m. to 1:00 p.m. EDT. The session will feature formal review and discussion of two subcommittee reports examining critical market and infrastructure issues amid the global energy transition.

• The EEMAC will vote on the report prepared by the Role of Metals Markets in Transitional Energy Subcommittee, which analyses how metal commodity markets are adapting to the demands of energy transition and emerging industrial uses.
• The EEMAC will also receive a presentation on the findings of the Physical Energy Infrastructure Subcommittee, focusing on challenges and developments in U.S. energy delivery systems.
• Both reports are expected to shape regulatory dialogue on commodity market evolution, energy pricing dynamics, infrastructure bottlenecks, and sustainability-linked risk.
• The meeting will be open to the public via livestream on CFTC.gov and the Commission’s YouTube channel, with access also available through dedicated domestic and international dial-in lines (Webinar ID: 160 295 4046; Passcode: 762417).
• Public comments may be submitted by 04 June 2025 through the US CFTC’s Online Comments Portal or directly to EEMAC Secretary Lauren Fulks via email at Lfulks@cftc.gov.
• EEMAC is one of five advisory committees under the US CFTC, aimed at delivering cross-sector insights from industry, academia, and regulatory bodies to inform rulemaking and policy direction in energy and commodity derivatives markets.

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United States CFTC Commissioner Summer K. Mersinger Announces Departure After Distinguished Tenure

On 14 May 2025, United States Commodity Futures Trading Commission (US CFTC) Commissioner Summer K. Mersinger announced her decision to step down from the Commission at the end of the month of May’2025, concluding a five-year tenure marked by regulatory leadership, public service, and policy innovation. Known for her leading the Energy and Environmental Markets Advisory Committee (EEMAC), Mersinger leaves behind a legacy rooted in market resilience and principled oversight.

• Commissioner Summer K. Mersinger expressed gratitude to her team, colleagues, and institutional partners, highlighting the dedication of US CFTC staff and the importance of public-focused regulation.
• Reflecting on her beginnings in Onida, South Dakota, she credited her working-class upbringing and early role answering phones for Senator John Thune as foundational to her public service ethos.
• She extended special thanks to her chief of staff, Chris Lucas, for his leadership and commitment, and acknowledged the mentorship and camaraderie that shaped her career.
• During her tenure, Commissioner Summer K. Mersinger advanced energy market oversight, climate-related financial risk analysis, and derivatives policy through EEMAC-led reports and inter-agency coordination.
• Concluding her announcement with a quote from A.A. Milne — “How lucky am I to have something that makes saying goodbye so hard.”

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US SEC Extends Review Period for Cboe Exchange Proposal to List Options on VanEck Bitcoin Trust

On 14 May 2025, the United States Securities and Exchange Commission (US SEC) issued a formal notice extending the review period for a proposed rule change submitted by Cboe Exchange, Inc. to permit the listing and trading of options on the VanEck Bitcoin Trust. The revised deadline for the Commission’s decision is now set for 2 July 2025, providing additional time to evaluate the implications of this landmark derivatives proposal.

• The proposed rule change, filed under SR-CBOE-2025-017, was initially submitted on 14 March 2025 and seeks to amend Cboe Rules 4.3, 4.20, and 8.30 to accommodate options trading on a spot Bitcoin exchange-traded product (ETP).
• The operative filing, Amendment No. 4 (filed on 01 May 2025), replaces all previous versions and reflects substantive regulatory updates to Cboe’s framework to support crypto-linked derivatives.
• Pursuant to Section 19(b)(2) of the United States Securities Exchange Act of 1934, the US SEC had an initial 45-day period, expiring 18 May 2025, to issue a decision on the proposal.
• The Commission has now extended the deadline to 2 July 2025, citing the complexity and market significance of the proposed listing, and the need to ensure full alignment with statutory standards, including investor protection and market integrity.
• The full text of Amendment No. 4 is available on the US SEC’s official website

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