Introduction
Upon taking office in January, the second Trump Administration set out to make the United States the world’s “crypto capital” with sweeping regulatory changes, marking a clean break from the Biden era’s enforcement-focused approach to digital assets.
Since then, various regulatory agencies, executive branch departments, and members of Congress have led policy efforts that seek to encourage digital asset innovation and welcome the industry back into the fold. This report covers their notable accomplishments, outstanding tasks, and potential obstacles through the first half of 2025.
Overview of Policy Changes
The White House
The president set the tone early with two key executive orders. The first executive order, signed three days after inauguration, rescinded Biden administration policies related to crypto; established the President’s Working Group on Digital Asset Markets (“PWG” or “Working Group”); directed it to prepare a report with recommendations for a federal regulatory framework; instructed agencies to compile all crypto-related regulations; and banned the creation of a U.S. central bank digital currency. This executive order mandated that executive branch agencies take stock of crypto-related issues that exist within their ambit and set clear deadlines for agencies to review, propose, and enact changes to their handling of those issues. While many or even most executive agencies and regulatory bodies may have performed such reforms on their own, the executive order and creation of the Working Group structure serve as a forcing function to ensure such reviews occur.
The second executive order, signed in March, created a U.S. Strategic Bitcoin Reserve, composed solely of bitcoin, and a U.S. Digital Asset Stockpile, composed of other digital assets. The executive orders direct the federal government to halt all sales of BTC and examine ways to acquire more BTC, but prohibit it from acquiring more stockpile assets, except those from criminal or civil asset forfeitures and civil money penalties.
Date | Policy Development | Description |
Jan. 23, 2025 | Executive Order: Strengthening American Leadership in Digital Financial Technology | Revokes Executive Order 14067 and the Treasury Department’s Framework from July 7, 2022, that explored the development of a U.S. CBDC. Establishes the President’s Working Group on Digital Assets Markets, chaired by the president’s special adviser for AI and crypto, within the National Economic Council. Directs the Working Group to write a report on a proposed federal regulatory framework and the creation of a national digital asset stockpile. Directs agencies to compile all crypto-related regulations for future alteration. Prohibits the creation of a U.S. CBDC. |
Mar. 6, 2025 | Creates a Strategic Bitcoin Reserve composed of Bitcoin (BTC) held by the Treasury Department from criminal or civil asset forfeitures and civil money penalties. This BTC is defined as Government BTC, cannot be sold, and is maintained as U.S. reserve assets. The Treasury and Commerce Departments are also ordered to identify “budget-neutral” strategies to acquire more BTC for the Reserve. Establishes the U.S. Digital Asset Stockpile composed of all digital assets held by the Treasury Department, other than BTC, from criminal or civil asset forfeitures. Notably, the EO does not explicitly prohibit stockpile assets from being sold, but does prohibit the Treasury from making new stockpile purchases, though the stockpile can grow through additional criminal or civil asset forfeitures or assessed penalties. |
Congress
Since January, Congress has already logged a few crypto-related achievements. First, both chambers voted to pass a resolution in a bipartisan fashion that rescinded the IRS “broker rule” relating to digital asset sales. President Trump signed this bill into law on April 10, restoring the definition of a covered broker to exclude DeFi exchanges that would have otherwise needed to report digital asset transactions for tax purposes. Under the rescinded rule, other crypto entities that would have needed to report this information included operators of custodial crypto trading platforms, certain crypto wallet providers, crypto kiosks, and certain processors of crypto payments. The Treasury and IRS formally removed the rule in July, but by utilizing the Congressional Review Act (CRA) to formally disapprove of the rule, Congress erases the rule entirely as if it had never existed and prevents the IRS from promulgating a “substantially similar” rule in the future unless Congress later passes a new statute expressly permitting it.
Since January, Congress has focused its work on major pieces of legislation on developing regulatory frameworks for payment stablecoins and clarifying and delineating regulatory jurisdictions for the crypto market as a whole. Congress tackled stablecoin legislation first, likely because such a framework was politically more feasible and somewhat narrower in regulatory complexity. The Senate passed its version of a stablecoin bill, the GENIUS Act, on June 17.
The GENIUS Act became the House’s version of the legislation, overtaking the House’s initial proposal, named the STABLE Act of 2025. Before its passage, the primary holdup for Democrats across chambers relating to the GENIUS Act was what they deemed as a lack of strong conflict-of-interest and consumer protection provisions. Despite these objections, the House passed the bill on July 17 in a bipartisan vote of 308-122, with 12 Republicans voting against its passage and 102 Democrats voting in favor of it. The president signed the GENIUS Act into law on July 18.
The House passed its version of the market structure bill, the CLARITY Act, on July 17, with 78 Democrats joining most Republicans in a broad bipartisan vote. While such complex market structure legislation will be more difficult to pass into law, given that the Senate needs 60 votes to overcome a filibuster, the surprisingly high level of Democratic support in the House increases the odds that CLARITY, or something similar, eventually becomes law. A discussion draft from the Senate Banking Committee was released on July 22.
Other congressional items that have made progress include the Anti-CBDC Surveillance Act, which would ban the creation of a central bank digital currency and passed the House (218-210), and the Blockchain Regulatory Clarity Act (BRCA), which would exempt software developers from AML/KYC rules. The BRCA has not yet seen a vote in either chamber but is likely to be included in other legislation.
Date | Law | Description |
Apr. 10, 2025 | Congress passed a joint resolution formally disapproving under the CRA the final IRS rule named “Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales.” President Trump signed this joint resolution into law, directing the Treasury Department and the IRS to remove this rule from the Federal Register. The rule had required DeFi exchanges, operators of custodial crypto trading platforms, certain crypto wallet providers, crypto kiosks, and certain processors of crypto payments to fill out Forms 1099-DA, named Digital Asset Proceeds from Broker Transactions, with customer trade information for tax purposes. | |
Jul. 18, 2025 | Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act (S.1582) | The GENIUS Act creates a federal regulatory framework with a state pathway for payment stablecoin issuers. Payment stablecoin issuers are required to maintain U.S. currency and short-term, liquid assets that back the stablecoin 1:1, disclose redemption policies, publish their reserve compositions monthly, and establish risk management practices. Foreign issuers can offer their payment stablecoins in the U.S. with approval of their country’s regulatory and supervisory regime by the Treasury Secretary. Payment stablecoins are defined as non-securities, but issuers of them are subject to the Bank Secrecy Act (BSA) and anti-money-laundering regulations. On June 17, the bill passed the Senate 68-30, with 18 Senate Democrats supporting it. During the House’s “Crypto Week,” the bill passed 308-122. The president signed the GENIUS Act into law on July 18. |
Securities and Exchange Commission
The SEC, now led by Trump appointee Chairman Paul Atkins, has taken a radically different approach to the crypto industry since the departure on Jan. 20 of its prior chair, Gary Gensler. Instead of targeting issuers and intermediaries like token projects and crypto exchanges and using an approach criticized as “regulating by enforcement,” the SEC is now engaging directly with industry stakeholders through the establishment of its Crypto Task Force (“CTF” or “Task Force”) to develop an innovation-friendly regulatory framework. The CTF has so far led five roundtables with stakeholders in academia and industry on classification of digital assets, regulation for crypto trading, custody, tokenization, and DeFi. The Task Force has already conducted 169 meetings with industry stakeholders and scholars at the time of writing in July 2025.
In addition to engaging directly and constructively with the crypto industry, the SEC dropped or resolved several enforcement cases against major crypto firms and exchanges, signaling a move away from regulating the market through enforcement. One such case against Coinbase was dismissed by the SEC. Under Gensler’s leadership, the agency had accused Coinbase of participating in the securities market as an unlicensed exchange, allowing secondary market trading of unregistered securities.
In February, the SEC agreed to file a joint motion with Justin Sun for a 60-day pause to the agency’s lawsuit against the TRON founder in order to explore a resolution. The SEC under Biden had alleged that Sun illegally offered and sold TRX and BTT tokens, which the agency considered unregistered securities.
The SEC tried to lighten its civil penalty in a different enforcement case. In May, the agency attempted to decrease a $125 million penalty against Ripple for allegedly selling an unregistered security through its XRP token. The court denied this request, and Ripple paid out its full penalty in cash in July.
Also in February, a federal court dismissed the SEC’s case against Richard Heart, accused of accumulating $1 billion through PulseChain, HEX, and PulseX and defrauding investors. The SEC decided not to refile its complaint or amend it in April.
Broadly speaking, the SEC has so far been the most active player among the regulatory agencies on crypto policy in this administration, deploying a swath of guidance, rulemaking rescissions, and formal and informal statements. The first de-scoping guidance that the SEC issued under Trump was a staff statement on memecoins, determining that such assets are not securities because they fail the Supreme Court’s Howey test in several ways. This guidance was the first of several such interpretations that put digital asset activities and products outside the remit of the SEC, including protocol mining, staking activities, and payment stablecoins. By de-scoping certain digital asset products and services, the updated guidance lessens the regulatory uncertainty and burden faced by issuers, exchanges, and other market participants that might otherwise have been subject to enhanced oversight and disclosure requirements.
In addition to de-scoping, the SEC engaged in several rescissions and withdrawals of previous regulatory policies. Some of the reversed policies included the recognition of crypto assets as liabilities on custodians’ balance sheets; the requirement of crypto custodians to meet traditional qualified custodian standards; and the regulation of DeFi platforms as traditional exchanges.
Lastly, a primary focus of the SEC’s regulatory changes has been clarifying disclosure guidance and requirements for crypto asset securities. Disclosure requirements were affirmed for issuers that offer crypto asset securities under Regulation S-K.
Date | Regulatory Action | Description |
Jan. 1, 2025 | Then-acting Chairman Mark Uyeda created the Crypto Task Force as part of an agency-wide effort to engage with industry stakeholders and the public to craft a regulatory framework for digital assets. The Crypto Task Force, led by Commissioner Hester Peirce, hosts roundtables, receives written input from the public, and meets directly with market participants and academia. | |
Jan. 23, 2025 | Staff Accounting Bulletin No. 122 (SAB 122) | Rescinds Staff Accounting Bulletin No. 121 (SAB 121). SAB 121 requires institutions obligated to safeguard crypto assets to recognize them as a liability and a corresponding asset on their balance sheets at fair value. Institutions also needed to disclose information on the crypto assets that they are responsible for, including the type and quantity of crypto assets, fair value measurements, internal recordkeeping, and more. Now, institutions should determine for themselves whether accounting standards require them to recognize a crypto asset held in custody for clients as a liability. |
Feb. 27, 2025 | The Division of Corporation Finance staff expresses the view that memecoins are not securities. The Division believes that transactions involving memecoins do not constitute the offer and sale of securities, and participants in such transactions do not need to register with the SEC. | |
Mar. 20, 2025 | The Division of Corporation Finance staff expresses the view that protocol mining activities do not constitute the offer and sale of securities, and participants in mining activities do not need to register with the SEC. This statement’s view on exempting protocol mining includes solo miners, mining pools, and pool operators. | |
Apr. 4, 2025 | The Division of Corporation Finance staff expresses the view that USD-pegged payment stablecoins are not securities. Market participants who mint and redeem USD payment stablecoins do not need to register with the SEC. Takes no position on non-USD-pegged stablecoins or algorithmic stablecoins. | |
Apr. 10, 2025 | Statement on Offerings and Registrations of Securities in the Crypto Asset Markets | The Division of Corporation Finance expresses its view on crypto-related disclosure requirements pending the deliberations of the overarching SEC Crypto Task Force. The Division outlines disclosure expectations for offerings and registrations of securities in the crypto asset markets. The applicable offerings and registrations include equity or debt securities of issuers whose operations relate to networks, applications, and/or crypto assets, as well as crypto assets offered as part of or subject to an investment contract. The statement addresses disclosure requirements from Regulation S-K, applying such disclosures to Form S-1 and Form 10. Expectations are also outlined for disclosures from foreign private issuers through Form 20-F and from issuers with offerings exempt from registration through Form 1-A. These issuers must clearly disclose their description of business, risk factors, description of securities, information on management staff, financial statements, and exhibits. |
Apr. 15, 2025 | Withdrawal of Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities and Related FAQs | The SEC withdrew its joint staff statement from the Division of Trading and Markets and FINRA that determined that broker-dealers with custody of digital assets must comply with the Customer Protection Rule (Rule 15c3-3). This rule mandates that broker-dealers hold customer assets physically or at a good control location. The withdrawn statement warned that a broker-dealer having a private key may not be enough evidence of exclusive control of the digital asset. Additionally, the statement was skeptical of whether digital assets are equipped to meet the requirements of annual broker-dealer audits. However, the statement acknowledged that some firms are attempting to use permissioned distributed ledger technologies to meet recordkeeping obligations. It stated that some digital asset securities may not qualify as a security under the Securities Investor Protection Act of 1970 (SIPA), so SIPA protections would not apply in the event of the failure of a broker-dealer carrying digital assets. The FAQs released in conjunction with the withdrawal of this joint staff statement clarify the application of Rule 15c3-3 to crypto assets. In particular, the FAQs determine that Paragraph (b) of Rule 15c3-3 does not apply to crypto assets that are not securities. The FAQs also clarify other regulations relating to the SEC’s 2020 SPBD Statement; broker-dealer custody and capital requirements; SIPA; and the Securities Investor Protection Corporation (SIPC). The FAQs outline circumstances when transfer agents for issuers of crypto assets that are securities need to register with the SEC and allow registered transfer agents to use DLT as official Master Securityholder Files. |
May 29, 2025 | The Division of Corporation Finance staff expresses the view that certain protocol staking activities do not constitute the offer and sale of securities. Participants in such protocol staking activities do not need to register with the SEC. The covered protocol staking activities in this statement involve self-staking, self-custodial staking directly with a third party, and custodian arrangements related to staking. This statement is a departure from the SEC under the last administration, which sued Coinbase and Kraken for allegedly providing unregistered security offerings through their custodial staking services. | |
Jun. 12, 2025 | The SEC issued a final rule to formally withdraw multiple rulemakings issued between March 2022 and November 2023. The amendments to Rule 3b-16 would have expanded the scope of the definition of an exchange, incorporating DeFi platforms within the definition. The SEC had specifically extended exchange registration to Communication Protocol Systems, ensnaring DeFi platforms. DeFi platforms would have needed to register with the SEC as national securities exchanges or, at a minimum, as broker-dealers to comply with Regulation ATS. | |
Jun. 12, 2025 | The SEC issued a final rule to formally withdraw multiple rulemakings issued from March 2022 to November 2023. The rescinded regulation would have added a safeguarding requirement to the current custody rule. In effect, the regulation would have expanded custody obligations to all client assets, including crypto assets, even if the crypto assets are not securities. Therefore, investment advisors handling crypto would have needed to hold crypto assets for clients at a qualified custodian. Qualified crypto custodians would need to meet banking regulations, audit and recordkeeping requirements, and other regulatory oversight conducted by the SEC. Advisers would also need to exhibit proof of possession or control over the client’s crypto assets. | |
Jul. 1, 2025 | The Division of Corporation Finance expresses its view on disclosure requirements for the offerings and registrations of securities by issuers of crypto asset exchange-traded products (ETPs). The Division outlines common issues that it observed during reviews of crypto asset ETP filings. The statement applies to disclosure requirements from Regulation S-K and Regulation S-X. Disclosures required include a prospectus summary; risk factors; description of business; information on the trust’s service providers, custodians, and fees and expenses; description of securities; plan of distribution; management information; conflicts of interest; financial statements; and filing fee tables. |
Commodity Futures Trading Commission
The CFTC has also taken some steps to alter its stance and engage more directly with the crypto industry, though the magnitude of the pivot is significantly less than the one seen from the SEC. The CFTC withdrew guidance that emphasized the risks and corresponding risk management to be used by crypto derivative exchanges and clearinghouses when listing a crypto derivative product. This upshot is less pre-listing scrutiny for new crypto derivatives.
Additionally, the CFTC relieved regulatory requirements on derivatives clearing organizations (DCOs) that clear crypto-related products. The withdrawn guidance would have required DCOs to undergo supervisory reviews of their systems and physical settlement arrangements to determine whether they properly managed the risks of digital assets.
The CFTC opened a Request for Comment (RFC) to engage with the industry on perpetual derivatives, also known as perps. This RFC is part of the CFTC’s effort to establish guidance and regulatory clarity on allowing perpetual derivatives (contracts with no expiry date) on registered exchanges. Days after the RFC posting, Bitnomial, a CFTC-regulated exchange, self-certified the first perpetual futures contract to be listed on a U.S. exchange.
The agency also issued a Request for Comment on the use cases, benefits, and risks of implementing 24/7 trading for derivatives markets. This action represents the CFTC’s openness to potentially moving the traditional market toward continuous, around-the-clock trading that already exists in the crypto market.
Date | Regulatory Action | Description |
Mar. 28, 2025 | The Division of Market Oversight and the Division of Clearing and Risk withdrew 2018 guidance to exchanges and clearinghouses on listing new crypto derivative contracts. The withdrawn guidance had clarified the CFTC’s priorities and expectations when reviewing new crypto derivatives on a designated contract market (DCM) or swap execution facility (SEF). In this withdrawn guidance, the CFTC had emphasized key focus areas for its review of new listings, including the ability of DCMs and SEFs to self-regulate and assess their own risk. Key focus areas discussed were enhanced market surveillance, coordination with CFTC Surveillance Group staff, large trader reporting, outreach to market participants and other stakeholders, and DCO risk management. In its withdrawal, the CFTC said the two divisions had "determined that the advisory is no longer needed given additional staff experience with virtual currency derivative product listings and increasing market growth and maturity.” | |
Mar. 28, 2025 | The Division of Clearing and Risk withdrew 2023 guidance that stated that there is increased risk posed by clearing crypto-related products at Derivatives Clearing Organizations (DCOs). The withdrawn guidance put DCOs on alert that CFTC would use its supervisory authority to review and examine compliance with systems safeguards requirements due to what it viewed as cyber and operational risks amplified by crypto. The CFTC would also monitor whether DCO applicants and registrants depended on entities, services, or models with conflicts of interest. Lastly, the agency would review physical settlement arrangements to see if they accounted for and managed the risks and obligations of digital assets. | |
Apr. 21, 2025 | The CFTC opened a request for comment (RFC) from the public for feedback on perpetual derivatives. This was the first step that the CFTC took to consider allowing perpetual derivatives contracts to be listed on CFTC-registered exchanges. The RFC sought public feedback to inform CFTC staff on the benefits, use cases, challenges, issues, and opportunities relating to perpetual contracts. The purpose of the RFC is to supplement the CFTC’s understanding of the perpetual derivatives market, examine how current regulation can apply to perpetual derivatives, and determine whether additional regulation is needed to address this emerging market. | |
Apr. 21, 2025 | The CFTC opened a request for comment (RFC) to explore issues related to 24/7 trading. In particular, the RFC seeks comment on issues related to DCMs or SEFs providing 24/7 trading, DCOs providing 24/7 clearing services, and futures commission merchants (FCMs) offering customers 24/7 trading and clearing services. The RFC is requesting feedback on how DCMs and SEFs would implement 24/7 trading services while maintaining strong market surveillance and operational resilience mechanisms. The RFC is also looking for ways to ensure that DCOs can meet their statutory and regulatory obligations relating to risk management if 24/7 trading was actualized. Since most crypto assets can trade on a 24/7 basis, this RFC brings the traditional market one step closer to implementing these practices for regulated derivatives. |
Banking Regulators
Banking regulators came under fire from the crypto industry during the Biden administration due to restrictive guidance on bank interactions with blockchains as well as allegations of a coordinated campaign to pressure banks to de-bank crypto-related clients, which the industry dubbed “Operation Chokepoint 2.0”. Key regulators include the Federal Reserve Board of Governors (Fed), the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC).
Most notably, banking agencies have rescinded regulatory policies that were previously issued jointly. A major reversal was the removal of “reputational risk” assessments from supervisory and examination procedures. This was important for crypto because it removed one reason that banks had been hesitant to serve crypto firms, or a way that bank examiners had pressured banks not to serve crypto firms, part of the alleged Operation Chokepoint 2.0. Another joint policy that the banking agencies rescinded was the prior notification requirement for engagement with crypto-related activities. Under that policy, banks needed to obtain written permission from the agencies, in the form of “non-objection letters,” before engaging in crypto-asset-related activities, a rare requirement.
Additionally, banking regulators, including the OCC restored prior regulatory policies that conflicted with the Biden administration’s issued guidance. One such example was the OCC once again allowing its supervised national banks and federal savings associations to buy and sell crypto held in custody at a customer’s direction. This guidance also assured OCC-regulated institutions that they could outsource crypto-related services, such as custody and execution, to third parties as long as they appropriately managed the risk.
Agency | Date | Regulatory Action | Description |
OCC | Mar. 7, 2025 | Rescinds Interpretive Letter 1179, eliminating the requirement for national banks and federal savings associations to obtain a non-objection letter from their supervisory office before engaging in crypto activities. Reaffirms Interpretive Letters 1170, 1172, and 1174, enabling OCC-regulated institutions to engage in crypto-asset custody, certain stablecoin activities, and independent node verification networks. | |
OCC | Mar. 20, 2025 | Removes all references to reputation risk of national banks, federal savings associations, community banks, and other OCC-regulated institutions from the Comptroller’s Handbook booklets and guidance issuances. This regulatory change eliminates reputation risk from the training of bank supervisors and the bank supervision process as a whole. References to reputation risk in joint handbooks and guidance will be removed in collaboration with the involved regulators. | |
FDIC | Mar. 28, 2025 | Rescinds a Financial Institution Letter named Notification of Engaging in Crypto-Related Activities that required FDIC-supervised institutions to notify the agency before engaging in crypto-related activities. The FDIC affirmed that its supervised institutions are allowed to engage in permissible crypto-related activities without prior approval. The FDIC will collaborate with the banking agencies to replace crypto-related interagency documents with ones enabling crypto-asset activities. | |
FDIC | Apr. 8, 2025 | Acting Chairman Travis Hill revealed that the FDIC is working toward issuing a rulemaking removing reputational risk from bank supervision. The rule would prohibit FDIC supervisors from taking an adverse action against banks over reputational risk. The rule would also prohibit FDIC supervisors from requiring, instructing, or encouraging banks to refrain from offering accounts on the basis of political, social, cultural, or religious views. | |
Federal Reserve Board of Governors | Apr. 24, 2025 | Rescinded a supervisory letter that required state member banks to notify their lead supervisory point of contact before engaging in crypto-asset activity. Instead, the Federal Reserve will monitor the crypto-asset activities of member banks through a regular supervisory process. | |
Federal Reserve Board of Governors | Apr. 24, 2025 | Rescinded a supervisory letter that required state member banks to receive a written nonobjection letter from their lead supervisory point of contact before engaging in dollar token activities. After receiving a nonobjection notification, the bank would be subject to ongoing supervisory review and enhanced monitoring under the now-rescinded supervisory letter. | |
Federal Reserve Board of Governors, FDIC, and OCC | Apr. 24, 2025 | Rescission of Joint Statement on Crypto-Asset Risks to Banking Organizations | The agencies rescinded a joint statement highlighting potential risks and vulnerabilities posed by exposures to crypto assets. The statement said that it was highly likely that issuing or holding crypto assets that are issued, stored, or transferred on an open, public, or decentralized network was inconsistent with safe and sound banking practices. |
Federal Reserve Board of Governors, FDIC, and OCC | Apr. 24, 2025 | The agencies rescinded a joint statement warning banking organizations of elevated liquidity risks from certain sources of funding from crypto-asset entities. The rescinded statement asserted that increased liquidity risk due to crypto-asset-related funding sources is exacerbated by the scale and timing of deposit inflows and outflows. The statement had defined deposits subject to increased volatility as those made by a crypto-asset entity on behalf of its end customers and stablecoin reserve deposits. | |
OCC | May 7, 2025 | Reaffirms an authority addressed in Interpretive Letters 1170 and 1183. Enables national banks and federal savings associations to buy and sell assets held in custody as directed by the customer. As long as the OCC-regulated institutions follow third-party risk management practices, they may also outsource bank-permissible crypto-asset activities to third parties. Bank-permissible crypto-asset activities include custody and execution services. | |
Federal Reserve Board of Governors | Jun. 23, 2025 | Revises the Federal Reserve’s Guidelines for Rating Risk Management at State Member Banks and Bank Holding Companies to remove references to reputational risk. References to reputation and reputational risk will be removed from supervisory materials and examination manuals and replaced with expanded detail on evaluating financial risk. | |
Federal Reserve Board of Governors, FDIC, and OCC | Jul. 14, 2025 | Joint Statement on Crypto-Asset Safekeeping by Banking Organizations | The agencies affirm that banking organizations are allowed to provide safekeeping for crypto assets in a fiduciary or non-fiduciary capacity. The joint statement outlines key risk-management principles for banks engaging in crypto-asset safekeeping, including cryptographic key management, standard custodian risk management, legal and compliance risk, third-party risk management, and audit programming. |
Department of Justice
The Department of Justice (DOJ) issued a memo written by Deputy Attorney General Todd Blanche that shifted its enforcement priorities within the digital asset space. Instead of prosecuting certain regulatory infractions, the Department will prioritize cases involving financial harm imposed on investors and consumers and violations related to drug trafficking, organized crime, human trafficking, and terrorism. In line with these priorities, the DOJ issued a complaint to seize $225 million in stablecoins, the largest amount of crypto ever seized. The funds had been stolen and then hidden through a complex money laundering network, according to prosecutors.
Additionally, the DOJ will discontinue prosecution of violations related to money transmitting, the Bank Secrecy Act, securities and commodities registration, and broker-dealer registration, except if defendants knowingly violated such requirements.
The DOJ and the CFTC closed their criminal and civil probes of Polymarket in July. The agencies had been investigating whether the crypto-based prediction market violated a 2022 agreement by permitting U.S. users to place bets on its platform. In 2022, the CFTC fined Polymarket $1.4 million for operating as an unregistered binary options market.
Date | Enforcement Change | Description |
Apr. 7, 2025 | The memo from Deputy Attorney General Blanche seeks to shift DOJ enforcement priorities from technical infractions to cases that cause financial harm to investors and consumers and facilitate drug trafficking, terrorism, cartels, organized crime, and human trafficking. The DOJ will refrain from charging firms with regulatory violations involving unlicensed money transmitting, BSA provisions, unregistered securities, unregistered broker-dealers, and provisions of the Commodity Exchange Act, unless there is willful intent. The memo disbands the National Cryptocurrency Enforcement Team and ends crypto enforcement in the Market Integrity and Major Frauds Unit. It also emphasizes that the DOJ will collaborate with other agencies in the President’s Working Group on Digital Asset Markets. | |
Jun. 18, 2025 | The DOJ filed a civil forfeiture complaint in the U.S. District Court for the District of Columbia for the seizure of over $225 million in USDT. The complaint alleges that 93 known scam deposit addresses held a large swath of USDT as part of a blockchain-based money laundering network. The laundered funds went through layers of intermediary wallets and crossed various networks and exchanges. |
Other Agencies
Regulatory agencies, such as the Department of Labor, the Federal Housing Finance Agency (FHFA), and the Internal Revenue Service (IRS), partook in policy changes that supported the crypto industry as well, albeit to a less frequent extent.
The FHFA furthered the legitimization of crypto assets in the mortgage market by directing Fannie Mae and Freddie Mac to recognize crypto as an asset of the borrower in their reviews of mortgages.
The Department of Labor reversed a 2022 guidance cautioning plan fiduciaries to exercise extreme care before adding crypto as an option in the investment menu of 401(k) plans. The updated guidance is intended to reflect a neutral approach of the Department toward investment types in these plans.
Agency | Date | Regulatory Action | Description |
Department of Labor | May 28, 2025 | The Employee Benefits Security Administration rescinded Compliance Assistance Release No. 2022-01, which warned plan fiduciaries to “exercise extreme care” before adding crypto as an option in the investment menu of 401(k) plans. The release had focused on “serious concerns” related to crypto investments in these accounts, including speculative risk, misinformed participants, custodial and recordkeeping concerns, and valuation concerns. | |
FHFA | Jun. 25, 2025 | As conservator, the FHFA directs Fannie Mae and Freddie Mac to develop a proposal to incorporate crypto as an eligible asset for borrower reserves in single-family mortgage loan risk assessments. The Enterprises must do this so crypto is recognized in their assessments without needing to be converted to USD. Only crypto assets that can be stored on a U.S.-regulated centralized exchange will be recognized in these assessments. | |
IRS | Jul. 11, 2025 | The Treasury Department and the IRS formally removed the final rule titled “Gross Proceeds Reporting by Brokers that Regularly Provide Services Effectuating Digital Asset Sales” from the Code of Federal Regulations. The implementation of this removal was designated by the joint resolution that Congress passed under the Congressional Review Act, and President Trump signed it into law in April. This removal exempts decentralized finance exchanges, operators of custodial crypto trading platforms, certain crypto wallet providers, crypto kiosks, and certain processors of crypto payments from tax reporting requirements through Form 1099-DA and from KYC requirements. However, centralized exchanges that custody crypto are still subject to reporting obligations. |
Unfinished Business
We expect the administration and Congress to continue to pursue policy proposals that support the digital assets space. Now that the GENIUS Act has become law, the more daunting task will be to pass the expansive legislative package that deals with market structure. The House’s version of market structure legislation, the Digital Asset Market Clarity (CLARITY) Act of 2025, passed the House on July 17. However, the Senate is operating on a slower timeline and released a discussion draft on July 22.
Obstacles remain in the way of future crypto-related legislation. In particular, a revolt from the president’s right flank delayed passage of the GENIUS Act, and the crypto business run by the president’s family could cause issues with the advancement of market structure in the Senate. Democrats allege that the president has conflicts of interest because of his family’s crypto activities, including a Trump memecoin, USD1, a stablecoin, and World Liberty Financial, a DeFi venture. Additionally, CLARITY is silent on decentralized finance (“DeFi”), but we expect that AML/KYC and national security concerns relating to DeFi could become sticking points in the debate over the Senate’s own market structure legislation (currently called the Responsible Financial Innovation Act).
Odds of passage based on Galaxy Research assessment of congressional timelines, policy priorities, and the political landscape.
Expected Timeline | Pending Legislation | Description | Galaxy Research’s Estimated Probability of Senate Passage |
Fall 2025 | The bill prohibits Federal Reserve banks from directly issuing a central bank digital currency (CBDC) or a substantially similar digital asset. The bill also prohibits a Federal Reserve bank from indirectly offering a CBDC, or a substantially similar digital asset, through a financial institution or other intermediary. The Federal Reserve is banned from testing, studying, developing, creating, or implementing a CBDC and from using a CBDC to implement monetary policy. The Federal Reserve cannot issue a CBDC or a digital asset that is substantially similar to one unless granted authority to do so by Congress. The bill passed the House 219-210 on July 17. | 50% | |
Fall 2025 | Digital Asset Market Clarity (CLARITY) Act of 2025 (H.R.3633) | The CLARITY Act would create a federal regulatory framework for the structure of the crypto market. The bill grants significant authority to the CFTC to oversee the crypto market by defining many digital assets as digital commodities. Digital commodities and payment stablecoins are excluded from the Securities Act of 1933’s definition of a security. DeFi activities are excluded from most of the bill’s requirements, except for the anti-fraud and anti-manipulation ones. The bill also allows financial holding companies to engage in digital commodity-related activities. The bill creates qualified digital asset custodian requirements. The CLARITY Act passed the House 294-134 on July 17. The Senate is operating on a slower timeline; in addition, the bill faces an uphill battle to gain 60 votes in favor of passage. | 40% |
In addition to Congress, the regulatory agencies are considering further exemptions for crypto products, as well as clarifying guidance on how emerging crypto products will be affected by regulation.
Agency | Predicted Timeline | Potential Regulatory Action | Description | Galaxy Research’s Estimated Probability of Action |
SEC | Within Next 6 Months | Clarifying regulation for tokenized securities | Commissioner Hester Peirce hinted this was coming in a July statement in which she said that the SEC was open to modernizing its rules or crafting exemptions for issuers of tokenized securities. | 70% |
SEC | Within Next 6 Months | Exempting certain NFT fundraising from securities regulation | Commissioner Peirce stated at a Crypto Task Force Roundtable that certain NFTs are not securities. Similar to the exemption granted for protocol mining, Peirce hinted that using NFTs as a fundraising mechanism for various projects could be next up for a securities exemption. She has said elsewhere that she does not think that an NFT powered by smart contracts that grant royalties to its creator should be regulated like a security. | 70% |
Treasury Department | Within Next 6 Months | Public release formally establishing the U.S. Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile | Following the Executive Order calling for the creation of the U.S. Strategic Bitcoin Reserve and the U.S. Digital Asset Stockpile, the Treasury Department could announce the formal creation of these reserves and their implementation, including their composition of digital assets. | 40% |
Treasury Department | Within Next 12 Months | Write rules and guidance for implementation of GENIUS Act | Under the GENIUS Act, the Treasury Department must create guidelines and rules to enact the law’s provisions, including on the handling of foreign issuers. | 80% |
Lastly, the White House may publicly release policy proposals initially undertaken by Executive Orders. Recommendations from the President’s Working Group on Digital Asset Markets remain to be seen by the public, but have likely been delivered to the White House on July 22, 2025 (180 days from the signing of the executive order). If released, the recommendations could potentially inform future regulation and legislation.
Organization | Predicted Timeline | Potential Policy Action | Description | Galaxy Research’s Estimated Probability of Release |
President’s Working Group on Digital Asset Markets | July 2025 | Public Release of 180-Day Digital Asset Report | Executive Order 14178 called for the President’s Working Group to generate a report recommending a federal regulatory framework for digital assets, including stablecoins, and provisions for market structure, oversight, consumer protection, and risk management. The report also focuses on the creation and maintenance of a national digital asset stockpile and national security issues related to digital assets. | 95% |
Court Cases
In May, Samourai Wallet moved to dismiss its criminal case brought by the Department of Justice. Samourai Wallet, a non-custodial bitcoin wallet and mixing service, was charged with operating an unlicensed money-transmitting business and with conspiring to commit money laundering.
In light of the Blanche memo and recent evidence, Samourai Wallet is arguing that the case should be dismissed because FinCEN’s 2019 guidance does not classify anonymized software providers as money services businesses. Due to the platform’s non-custodial model, Samourai Wallet argues that the wallet never took control of funds or private keys. The defendant used evidence revealed by a Brady request to back their position. In a letter acquired by the defendant, FinCEN told prosecutors that Samourai Wallet not possessing the private keys suggests that the platform did not act as a money services business. In July, the Southern District of New York filed a superseding indictment that expanded the timeline of the charges by two months, added $150 million to the total funds laundered, inserted allegations of using laundered proceeds related to drug trafficking, and removed all but one reference to “unlicensed” money transmission.
This month, the federal government decided not to continue to fight a case brought by Coin Center on behalf of Tornado Cash in the U.S. Court of Appeals. The U.S. Court of Appeals dismissed the case in light of the fact that Tornado Cash recently obtained its relief from a lower court. This follows the decision of the U.S. District Court for the Western District of Texas to order the Office of Foreign Assets Control (OFAC) to repeal sanctions against Tornado Cash. Accordingly, in March, OFAC removed Tornado Cash from its lists of Specially Designated Nationals. Coin Center argued that OFAC overstepped its statutory authority by listing Tornado Cash. However, the founders of Tornado Cash are still facing criminal charges.
Roman Storm, co-founder of Tornado Cash, is standing trial in the U.S. District Court for the South District of New York on charges of money laundering, violation of U.S. sanctions, and operation of an unlicensed money-transmitting business. Storm claims that Tornado Cash is an independent, decentralized protocol that he could not control and that the code is protected by free speech under the First Amendment. He faces up to 45 years in prison if convicted.
Conclusion
Overall, the outlook for developments in the crypto regulatory space looks promising. There is significant momentum across the agencies and the White House, with regulatory heads issuing statements, guidance, and rulemakings that support innovation and progress for digital assets.
Challenges lie ahead in Congress due to intra- and inter-party conflict over passing expansive market structure legislation. While complications relating to the handling of DeFi and the Trump family’s crypto ventures could be impediments, the high number of Democrats supporting both GENIUS and CLARITY in the House is a point of optimism that suggests the Senate pathway may not be as fraught as previously thought.
Regardless, the digital asset industry stands to benefit from policy advancements that tailor new and existing regulations to digital asset products. Through clear rules of the road, the industry will be better positioned to thrive by complying with laws and regulations and generating new products that bolster the U.S. economy in an innovative, safe, and responsible manner.
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