Minnesota lawmakers say local financial institutions can't stay on the sidelines as Wall Street builds out digital-asset infrastructure, warning that customer deposits are migrating from community banks and credit unions to crypto exchanges outside the state. Rep. Bernadette "Bernie" Perryman (R‑St. Augusta), who authored the measure signed into law by Gov. Tim Walz, said she has heard growing concerns for years about deposit flight to digital-asset platforms. She argued that when money leaves Minnesota institutions, fewer dollars are available for local small-business lending, mortgages and community development. From the industry's perspective, the new authority is also about staying competitive, said Meggan Schwirtz, chief experience officer at St. Cloud Financial Credit Union. She said large financial institutions and Wall Street firms are positioning for long-term changes in payments, settlement and custody tied to digital assets, and that community lenders risk losing relevance with younger customers if they ignore the shift. Wall Street's push is increasingly centered on stablecoins and tokenization. A Jefferies report said stablecoins are unlikely to trigger a sudden run on U.S. bank deposits, but could gradually pressure earnings as adoption grows. Jefferies estimated privately issued digital-dollar adoption could reduce core deposits by 3% to 5% over five years and cut average bank earnings by about 3%. At this year's Consensus Miami conference, tokenization and stablecoins dominated the agenda. Joseph Lubin, CEO and founder, said the economy is moving toward broad tokenization. Circle marketing SVP Tim Queenan said institutions are exploring how to move core financial infrastructure on-chain, adding that stablecoins are becoming so integrated into payments that many users no longer think of themselves as crypto users. Minnesota is now the first Midwestern state to adopt a single, explicit framework allowing both state-chartered commercial banks and credit unions to provide cryptocurrency custody services. Walz signed the bill last week after it passed with overwhelming bipartisan support earlier this month. The law is set to take full effect on Aug. 1. Ryan Smith, chief advocacy officer at Minnesota Credit Union Network, said the state law is a key step but not the final word. Institutions offering custody will still need to comply with federal requirements, including anti-money laundering (AML) programs, Suspicious Activity Reports (SARs) and enhanced know-your-customer (KYC) diligence. Digital assets remain outside FDIC and NCUA insurance protections, prompting local institutions to pursue private alternatives. Schwirtz said St. Cloud Financial Credit Union has secured an underwriting partnership for a Lloyd's of London-backed insurance solution tailored to its custody operations. State Rep. Steve Elkins (DFL), one of three authors of bill HF 3709, called the measure a milestone that expands what community banks and credit unions can offer customers as part of a broader suite of services. The custody law arrives alongside a statewide crackdown on crypto ATMs and kiosks. Walz also signed a bipartisan bill (SF 3868) imposing a statewide ban effective Aug. 1. Separately, Bitcoin Depot, one of the largest U.S. bitcoin ATM providers, filed for bankruptcy on Monday.

The White House said President Trump signed an executive order on May 19, 2026 directing federal financial regulators to reassess and update crypto rules seen as unnecessary barriers for banks, fintech firms, and digital asset companies, building on earlier actions such as creating a digital asset working group and repealing SEC Staff Accounting Bulletin 121.

BlockBeats reported that on May 22, after the China Securities Regulatory Commission (CSRC) proposed a penalty of about RMB 1.85 billion (roughly $271 million) over Futu's cross-border business activities, investors began to focus on the company's earnings power and potential financial strain. According to Futu Holdings' 2025 results, annual revenue totaled HKD 22.847 billion, up 68.1% year on year. Non-GAAP net profit rose 101.9% to HKD 11.645 billion, or about $1.49 billion. By that measure, the proposed penalty would be equivalent to roughly 18% of Futu's 2025 Non-GAAP net profit. Analysts said Futu's current profitability suggests it can absorb the hit, though tighter oversight of cross-border operations could continue to reshape business models across the sector. The CSRC has previously said that certain Futu entities in mainland China and Hong Kong carried out securities, fund distribution and futures activities in mainland China without the required approvals, in breach of regulations including the Securities Law.

Futu's Q4 2025 earnings report shows that as of Dec. 31, 2025, total client assets on its platform stood at HK$1.23 trillion (about $158.4 billion). China Merchants International said in a March 16 report that more than 80% of Futu's client assets come from Greater China. Assuming asset levels stay the same, the user funds affected by regulatory actions and later removed from Futu would be about $126.7 billion. The comparable figure for Tiger Brokers is about $48.6 billion, bringing the combined total to roughly $175.3 billion.

UpRongke, previously known as Tiger Securities, said certain subsidiaries received a notice on May 22, 2026 from the Beijing branch of the China Securities Regulatory Commission (CSRC) that it had opened a probe into suspected illegal activities involving securities, fund and futures business. According to the findings, the subsidiaries conducted cross-border securities services without a license and carried out unauthorized fund- and futures-related activities within mainland China. The Beijing CSRC branch imposed administrative penalties totaling about RMB 308.1 million and ordered the confiscation of approximately RMB 103.1 million in illegal gains. Wu Tianhua, a director, CEO and the company's actual controller, was issued a warning and fined RMB 1.25 million. UpRongke added that as of end-2025, retail client assets in mainland China represented roughly 10% of total client assets on a consolidated basis.

CoinDesk notes that the latest U.S. Treasury data on international capital flows is drawing renewed market scrutiny. Foreign reporting cited in the piece says China, India and Brazil collectively reduced their U.S. Treasury holdings by about $51.2 billion, a move that has reignited debate over demand for U.S. government debt, confidence in the dollar and the durability of the global reserve system. Based on the figures referenced, China trimmed its holdings by roughly $18.9 billion, Brazil by about $17.3 billion and India by around $15.0 billion, totaling the $51.2 billion decline. The article frames the pullback as part of a longer-term trend in which some emerging economies continue to adjust reserve portfolios, reducing reliance on single-currency U.S. assets. It emphasizes that these reductions do not represent an outright exit from the Treasury market, but they do signal a shift in allocation preferences. Commentary highlighted in the report argues the significance lies less in the absolute amounts and more in what they imply for the dollar's international standing. Former U.S. Congressman Ron Paul is quoted as saying the dollar's position as the world's primary reserve currency is under pressure. The article adds that broader diversification away from the dollar in reserves, trade and settlement could ultimately affect the United States' ability to attract global savings through its bond market. For investors, changes in reserve allocation can shape expectations for Treasury demand, U.S. funding costs and currency moves. The piece concludes that, at present, the data looks consistent with ongoing portfolio rebalancing rather than a sharp, event-driven shift. U.S. Treasuries remain among the most liquid sovereign bond markets, and the dollar still accounts for a large share of global payments and reserves. Even so, the trend points to growing interest in alternatives, and a wider move in that direction could gradually alter longer-term pricing dynamics for both the dollar and U.S. government debt.

Italian authorities say they have shut down an unusual crypto-based tax evasion operation that allegedly hid profits directly on the Bitcoin blockchain. The Economic and Financial Police Unit in Foggia reported that a suspect used the Bitcoin Ordinals protocol and the BRC20 token standard to generate and conceal roughly €1 million (about $1.1 million) in undeclared capital gains. Blockchain analytics firm Chainalysis disclosed the case in findings published Wednesday. Chainalysis said the activity combined token minting, marketplace sales and repeated inscriptions to keep funds moving onchain while sidestepping tax reporting. Investigators allege the suspect minted tokens via Ordinals and BRC20, listed them on marketplaces, and sold them at prices far above the original mint cost. Profits were then routed back to a primary Bitcoin wallet and recycled into new inscriptions, creating a loop that moved value without producing conventional tax records. Ordinals, introduced in 2023, assigns a serial number to a satoshi—Bitcoin's smallest unit—and allows arbitrary data such as images or text to be embedded in Bitcoin transactions. BRC20 is an experimental token standard built on Ordinals that enables users to deploy, mint and transfer fungible tokens on Bitcoin. While crypto-related tax evasion is not new, Chainalysis said illicit actors are increasingly leaning on NFTs, decentralized finance tools and emerging token standards to obscure wealth. Compliance research points to persistent underreporting: a March report found only 32%–56% of U.S. crypto owners report gains to tax authorities, and an August 2024 study put Norway's self-reporting rate at 12%. The U.S. Internal Revenue Service estimates the gross tax gap—taxes legally owed but not collected—at about $606 billion. Chainalysis emphasized that schemes built on technical novelty still face a core limitation: public blockchains are immutable ledgers. Transactions remain permanently recorded, and modern blockchain intelligence can reconstruct transaction networks and cross-reference them with exchange Know-Your-Customer disclosures to link funds to individuals. Investigators said the Foggia case underscores that new onchain mechanics do not guarantee anonymity. With new asset types and token standards proliferating, analysts expect regulators and tax agencies to intensify scrutiny of gaps between onchain wealth and declared income, driving more investigations globally. (Featured image: Tax Central; chart: TradingView)

Futu Holdings (FUTU.O) said it has received an investigation notice and a preliminary administrative penalty notice from the China Securities Regulatory Commission (CSRC) and the CSRC's Shenzhen office. According to the regulator, certain Futu entities in mainland China and Hong Kong allegedly carried out securities brokerage, public fund distribution and futures-related business in mainland China without the required licenses or approvals. The CSRC said the suspected conduct violates the Securities Law, the Securities Investment Fund Law and the PRC Futures and Derivatives Law. The CSRC plans to order the relevant companies to rectify or halt the activities, confiscate illicit gains and levy fines. The proposed total monetary penalty is about RMB 1.85 billion (roughly USD 271 million). The regulator also intends to fine the company's founder and CEO Li Hua RMB 1.25 million (about USD 183,575). Futu said the penalties remain subject to further procedures and the CSRC's final decision.