South Korea's financial regulator has instructed all domestic crypto exchanges to reconcile customer asset balances every five minutes after a major mistaken payout earlier this year undermined market confidence. The new requirements follow an incident in February in which Bithumb, during a promotional campaign, mistakenly credited users with 2,000 BTC each instead of 2,000 Korean won (about $1.40). The error amounted to an estimated $42 billion in misallocated crypto. The Financial Services Commission (FSC) launched emergency inspections across the country's five major exchanges. The regulator said the findings pointed to broader operational weaknesses: most venues reconciled accounts only once every 24 hours; three lacked an automated "kill switch" to stop trading when large discrepancies emerged; four did not have multi-step approval controls for high-risk manual transactions; and two had not segregated general accounts from high-risk transaction accounts. On April 6, the FSC unveiled a three-pillar reform package. Exchanges must implement automated balance checks every five minutes, with alerts and automatic trading halts triggered by significant mismatches. The audit cadence will shift to monthly external audits from a quarterly schedule. Public disclosures will also be expanded to include asset-by-asset on-chain holdings rather than a simple coverage ratio. For manual, high-risk operations such as event payouts, exchanges will be required to use segregated accounts, deploy validation systems that automatically reject mismatched inputs, and obtain third-party cross-verification before execution. The FSC will also require exchanges to appoint dedicated risk management officers and set up risk management committees, aligning expectations more closely with traditional financial institutions. Regulatory compliance checks will move from annual reviews to twice-yearly inspections, with results reported to authorities. DAXA, the industry body, is expected to finalize self-regulatory amendments this month, with system upgrades to be completed by May. The key provisions are set to inform South Korea's forthcoming second-phase Digital Asset Act.

Indonesian courts convicted three people in cases heard between 2024 and 2025 for channeling funds to terrorist groups through cryptocurrency, according to ChainThink. One defendant was found to have sent more than 49,000 USDT in 15 separate transfers to networks tied to ISIS. The country's financial intelligence unit, PPATK, worked with police to track the flows on-chain, using blockchain analysis to build evidence presented in court. Since 2024, Indonesia has tightened oversight of crypto trading platforms, requiring operators to comply with antimoney laundering and counterterrorism financing (AML/CFT) rules.

A new International Monetary Fund (IMF) report warns that wider adoption of blockchain-based tokenisation could amplify the severity of financial crises. The IMF argues that atomic, near-instant settlement on blockchain networks may compress the window regulators typically have to intervene during market stress. Instant settlement is often cited as a key benefit of tokenising real-world assets (RWAs). Source: The Block

The Blockchain Association has filed a comment letter with the U.S. Securities and Exchange Commission (SEC) responding to Citadel's earlier call for tougher regulation of decentralized finance (DeFi), according to Odaily Planet Daily. In its submission, the group argued that DeFi protocol developers are neither brokers nor exchange operators and should not be regulated under frameworks built for traditional financial intermediaries. The association also urged the SEC to move forward with an "innovation exemption" mechanism that would establish a regulatory sandbox for onchain assets and tokenized securities. It warned that a full rulemaking process can take a long time, potentially slowing adoption and pushing innovation overseas. Citadel had previously recommended that the SEC tighten DeFi oversight through formal legislative procedures. (The Block)

SEC Chair Paul Atkins said the agency's proposed "safe harbor" framework for crypto projects has been submitted to the White House Office of Information and Regulatory Affairs (OIRA), a final step before the rule is formally issued, according to ChainCatcher. The proposal would create a "startup exemption" that lets crypto industry participants raise a specified amount of capital over a four-year period, contingent on meeting certain disclosure requirements. Atkins also outlined an "investment contract safe harbor" intended to align with the SEC's interpretive guidance on token classification released in March. He argued that legislation is needed because it can provide a stronger, more durable regulatory framework than agency rulemaking. Separately, the SEC is evaluating an "innovation exemption" that would function as a regulatory sandbox for onchain assets. The initiative has drawn extensive debate over the past year among crypto advocates and traditional financial institutions. Atkins said the SEC has the authority to move forward with the innovation exemption and will announce its parameters soon, adding that significant work remains.

BlockBeats reports that on April 7, SEC Chair Paul Atkins said the agency's proposed crypto "safe harbor" framework has moved into the White House review process and is now being evaluated by OIRA, with publication expected soon. The plan would introduce a "startup exemption" that lets crypto projects raise capital for roughly four years while meeting specified disclosure requirements. It also outlines related safe harbors for investment contracts and provides interpretive guidance on how tokens may be classified. Separately, the SEC is pushing an "innovation exemption" designed to function like a regulatory sandbox for onchain assets, though the industry remains divided over how broad it should be. (The Block)

U.S. President Donald Trump is considering imposing tolls on vessels navigating the Strait of Hormuz.

TODAY: SEC Chair Paul Atkins said the SEC's proposed crypto safe-harbor framework has moved to White House review and a formal rule is expected in the near term. The proposal would introduce a "startup exemption", allowing crypto projects to raise capital without having to meet registration requirements immediately.

Fairshake, a cryptocurrency-backed political action committee, said it spent more than $130 million on media buys for the 2024 general election and still has $193 million in campaign funds available as the November 2026 midterm elections approach. Separately, Fellowship PAC said it has raised more than $100 million and named Tether executive Jesse Spiro as its chair.