U.S. crypto regulation entered the new year under renewed political scrutiny, with lawmakers, regulators and courts shaping a volatile landscape for digital asset companies and investors.
From Capitol Hill oversight demands to state-level tax fears and high-profile judicial firings, this week shows how political risk remains a defining feature of the crypto market.
Rep. Maxine Waters has stepped up pressure on the Securities and Exchange Commission, formally urging House Financial Services Committee Chairman French Hill to schedule an oversight hearing with SEC Chairman Paul Atkins.
Waters cited the agency’s decision to drop several major crypto enforcement cases, calling the policy change unprecedented and politically charged under the Trump administration.
In a pointed letter sent Sunday, the top Democrat argued that the commission failed to adequately examine Atkins’ leadership, particularly in comparison to former Chairman Gary Gensler’s two appearances during his first year.
The move shows that crypto enforcement — or the perceived rollback of it — is poised to become a new flashpoint in Washington, with congressional oversight now firmly on the agenda.
A proposed California ballot initiative has sent shockwaves through the crypto and tech sectors, with industry executives warning it could accelerate the exodus of wealthy individuals from the state.
The Billionaires Tax Act of 2026 would impose a one-time 5% levy on net wealth above $1 billion, including unrealized gains — a provision that critics say is particularly destabilizing for founders and investors holding illiquid stocks.
Opponents argue the measure could force the sale of assets simply to meet tax obligations, disrupting startups, investment flows and philanthropic funding.
Kraken co-founder Jesse Powell warned that the proposal could be “the straw that broke the camel’s back”, while Bitwise CEO Hunter Horsley warned that taxing unrealized gains undermines the financial architecture of private companies. If approved, the measure could reshape the geographic footprint of crypto capital in the United States.
Regulatory scrutiny has also intensified around Nasdaq-listed crypto firm ALT5 Sigma after reports revealed that its newly appointed auditor is currently not authorized to conduct audits due to an expired license.
According to the Financial Times, the company replaced its previous auditor after failing to file its third-quarter results on time, appointing a small Texas-based company whose license expired in August and had not been renewed by the end of December.
