This Week in Crypto Law

The opinion editorial below was written by Alex Forehand and Michael Handelsman for Kelman.Law.

The final week of March delivered a series of pivotal legal and regulatory developments bridging traditional finance and digital assets. From tokenized securities trading in the United States to global enforcement actions and jurisdictional battles, regulators are increasingly asserting control while also enabling new market structures

SEC Approves Nasdaq Plan for Tokenized Securities Trading

The U.S. Securities and Exchange Commission approved a proposal by Nasdaq to facilitate trading of certain equities and ETFs in tokenized form. This move represents a significant step toward integrating blockchain infrastructure into traditional securities markets, allowing tokenized representations of assets to trade alongside conventional instruments. The approval signals growing regulatory acceptance of blockchain-based settlement systems and could accelerate adoption of tokenization across mainstream financial markets.

Hong Kong Tightens Crypto Licensing Regime

Hong Kong has intensified its crypto licensing requirements, warning exchanges that failure to obtain proper authorization could result in enforcement action as the transition period ends. The shift reflects a broader regulatory evolution—from early-stage openness to strict compliance enforcement. While some firms may exit the market, others may view this as a necessary step toward institutional credibility and long-term adoption.

Nigeria Charges Binance Executives with Tax Evasion

Nigeria has filed tax evasion charges against executives of Binance, escalating its efforts to regulate crypto activity within its borders. The case presents a major test of how far national governments can extend jurisdiction over global crypto platforms and their personnel, particularly in emerging markets.

Scrutiny Mounts After SEC Enforcement Chief Resigns

U.S. lawmakers are seeking answers following the abrupt resignation of the U.S. Securities and Exchange Commission’s enforcement director. The departure has raised concerns about potential political influence over enforcement priorities, including those related to crypto markets. Leadership changes at key regulatory agencies can significantly impact enforcement strategy, creating uncertainty for market participants navigating compliance obligations.

Department of Labor Opens Door to Crypto in 401(k) Plans

The U.S. Department of Labor proposed new guidance that could allow crypto assets to be included in 401(k) retirement plans. The proposal would permit plan fiduciaries to allocate to crypto alongside other alternative investments, such as private equity. This marks a potential turning point for mainstream adoption—but also raises complex legal questions regarding fiduciary duties, risk disclosures, and investor protection in retirement accounts.

U.S. Government Challenges State Regulation of Prediction Markets

The U.S. government has filed lawsuits against multiple states, asserting that only the Commodity Futures Trading Commission has authority to regulate prediction markets. The dispute centers on whether event-based trading platforms should be regulated as gambling under state law or as derivatives under federal law. This is a critical jurisdictional battle that could determine how emerging digital trading platforms—such as prediction markets—are regulated in the United States.

Staying informed and compliant in this evolving landscape is more critical than ever. Whether you are an investor, entrepreneur, or business involved in cryptocurrency, our team is here to help. We provide the legal counsel needed to navigate these exciting developments. If you believe we can assist, schedule a consultation here.

This Week in Crypto Archive:

This Week in Crypto Law (Mar. 22, 2026)

This Week in Crypto Law (Mar. 15, 2026)

This Week In Crypto Law (Mar. 8, 2026)

If you’re wondering how to manage risk when trading crypto, remember that this market shifts rapidly; pairing enthusiasm with prudence is the wiser approach to digital assets. In practice, risk management is the process of identifying what could go wrong in a trade, deciding in advance how much you can lose, and using tools (like position limits and exits) to keep any single mistake or market move from doing outsized damage.

Summary

Crypto and traditional securities expose investors to different kinds of risk, and treating them as identical leads to poor assumptions. Because these markets operate on distinct mechanics, each must be assessed within its own context. Risk management matters because the same volatility and structural quirks that create opportunity can also turn a small misstep into a large loss, and protecting capital is what keeps you in the game long enough to learn and improve.

In fast-moving crypto markets, a structured risk plan turns uncertainty into defined decisions you can execute consistently.

Speculative Securities: A Quick Primer

When an instrument is considered speculative, there is a real chance of losing interest, principal, or both. Understandably, many shy away from such exposure, yet outcomes are unpredictable and can result in either significant gains or losses.

Consider high-yield bonds — commonly known as junk bonds. Issuers often have low credit ratings, so defaults are more likely than with investment-grade borrowers. In the late 1980s, these bonds were labeled speculative-grade or below-investment-grade. Many issuers were in or near bankruptcy, and it was uncertain which companies would survive. Backing a firm that emerged successfully could yield outsized returns, but many investors saw capital evaporate. Even after fundamental analysis — examining company history, financials, performance data, and market trends — the uncertainty kept these assets firmly speculative.

Crypto’s Shifting Risk Profile

Cryptocurrency markets are also speculative, and the payoff potential can be dramatic; for instance, Bitcoin climbed from $10,000 to $20,000 within two weeks in December 2017. As with junk bonds in their heyday, no one can say which networks or tokens will lead over the long term. The risk drivers, however, are not the same as those in high-yield debt, and having a framework to manage exposure still matters. Key categories often include market risk (rapid price swings), liquidity risk (thin order books and slippage), operational and technology risk (platform outages and smart-contract bugs), regulatory risk (policy shifts), and custody or cybersecurity threats.

Much of crypto is new and evolves at breakneck speed. Classification remains unsettled: the Internal Revenue Service treats crypto as property subject to capital-gains tax, while the Securities and Exchange Commission views certain assets as securities that fall under its oversight. When fundamental definitions remain fluid, it’s easy to brand the space as risky — which is why approaching it with care and curiosity is sensible.

Speculative Risk-Taking Requires Deliberate Choices

Investing blends art and science, and even experienced professionals encounter surprises in the crypto market. What it should not become is a gamble. Do rigorous research, learn how the cryptocurrencies and platforms you use actually work, and understand the known hazards before you trade.

Strong risk habits tend to look similar across strategies: using stop-loss orders (or pre-defined exits) to cap downside, sizing positions so a single trade can’t meaningfully harm the account, diversifying so one token or theme doesn’t dominate outcomes, setting a risk/reward ratio before entering, and trading only with risk capital you can afford to lose without disrupting your financial life.

A simple five-step process can help bring structure to your approach: identify risks, analyze how likely and severe they are, choose controls to address them, implement those controls consistently, and then monitor results and adjust as conditions change.

Your personal risk tolerance is not just a number. It reflects your financial situation (cash needs and debt), your goals and time horizon, your experience with drawdowns, and your psychological comfort with uncertainty. Practical ways to assess it include choosing a maximum acceptable percentage loss per trade and per day/week, paper trading to observe how you react under pressure, keeping a short trading journal, and stress-testing positions by imagining a sharp drop and deciding whether you could follow your plan without freezing or panic-selling.

You can also calculate risk parameters directly. A common approach is to set a maximum account risk per trade (for example, 1%) and then size the position from the distance between entry and stop. Position size (units) can be calculated as: (Account Size × Risk %) ÷ (Entry Price − Stop Price) for a long trade.

Example: If your account is $10,000 and you risk 1% ($100) on a trade, and you plan to buy at $50 with a stop at $48, your risk per coin is $2. Your position size would be $100 ÷ $2 = 50 coins. If your target is $56, the potential reward per coin is $6, so the risk/reward ratio is $6 ÷ $2 = 3:1.

Different risk decisions also fall into four broad types: avoiding risk (skipping a trade or asset you don’t understand), reducing risk (tightening sizing rules or using exits), transferring risk (using hedges or shifting exposure off a single venue), and accepting risk (taking a measured position because the potential upside justifies the predefined downside).

Common mistakes often show up when plans aren’t written down or enforced: overleveraging, trading without a stop, letting emotions override rules, building a portfolio that is effectively one crowded bet, and ignoring market-moving news or changes in exchange conditions that can affect execution.

Keep the following factors in mind as you invest and design a crypto risk management process:

• Market Volatility
• Market Regulation

Perhaps the most important point when shaping an effective approach is to avoid forcing legacy finance labels onto a new asset class. While many still regard the space as speculative, there is growing agreement that the underlying technology, networks, and crypto assets have real value. Methods to define and measure that value are still developing, and they will ultimately inform how traders perceive risk in this market.

Key Takeaways:

• Bitcoin difficulty rose 3.87% at block 943488 as hashrate fell 60.45 EH/s; a 15.73% cut is projected.
• Miners face $30.67 PH/s hashprice and 0.56% fees, pushing firms toward AI over BTC mining.
• Bitcoin network nears April 19, 2026, adjustment as slower 11:51 blocks signal easing difficulty ahead.

Bitcoin Mining Tightens

The Bitcoin network has logged a total of seven adjustments this year, comprising three increases and four decreases. The most recent reduction, two weeks ago, was sizable, arriving after consecutive gains of 14.73% and 0.45% across the prior two epochs.

Following the latest adjustment, the difficulty rating is now 3.87% higher, making blocks that much harder to discover, and it further stands at 138.97 trillion times more difficult than Bitcoin’s launch.

As of 4 p.m. Eastern time, 181 of the 2,016 blocks in the current epoch have been mined, placing the network roughly 9% of the way toward the next adjustment expected on April 19, 2026. While it remains early and conditions can shift considerably between now and then, current estimates point to a projected 14.27% reduction.

This outlook stems from a noticeable slowdown in block intervals over the past day, with data from hashrateindex.com indicating an average block time of 11 minutes 39 seconds, well above the expected 10-minute cadence.

What’s behind the shift? A decline in hashrate. Bitcoin.com News reported on March 28 that the Bitcoin network’s total computational power had exceeded 1,000 exahash per second (EH/s), or 1 zettahash per second (ZH/s). On that day, hashpower reached 1,022 EH/s, whereas it now sits 60.45 EH/s lower at 961.55 EH/s.

Revenue Compression Tightens the Squeeze

Compressed revenues are likely a key factor behind the downturn, alongside mining operations opting to allocate resources toward artificial intelligence (AI) infrastructure rather than mining BTC in pursuit of stronger returns. An infrastructure provider deploying its megawatts toward AI rather than mining bitcoin can realize significantly higher returns, a dynamic that has persuaded many of today’s operators to redirect their focus.

A daily hashprice of $30.67 per petahash per second (PH/s) ranks among the lowest revenue levels bitcoin miners have faced since the network’s early years, when bitcoin carried a far smaller valuation. With 106,335 blocks remaining until the next halving, conditions are poised to tighten further.

Ethereum Foundation Reaches 70,000 ETH Staking Target With $93 Million April Deposit

The Ethereum Foundation (EF) staked approximately 45,034 ETH on April 3, 2026, bringing its cumulative total to nearly 69,500 ETH…

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Ethereum Foundation Reaches 70,000 ETH Staking Target With $93 Million April Deposit

The Ethereum Foundation (EF) staked approximately 45,034 ETH on April 3, 2026, bringing its cumulative total to nearly 69,500 ETH…

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Ethereum Foundation Reaches 70,000 ETH Staking Target With $93 Million April Deposit

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The Ethereum Foundation (EF) staked approximately 45,034 ETH on April 3, 2026, bringing its cumulative total to nearly 69,500 ETH…

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Adding pressure, miners cannot rely on fees, which account for just 0.56% of the block reward. In effect, the system appears to be approaching a breaking point. Yet Bitcoin’s difficulty adjustment is engineered for precisely this scenario. If miners exit and hashrate declines, difficulty adjusts downward, drawing participants back with more accessible conditions.