USA Trends and Developments Contributed by: Andrea S Kramer, ASKramer Law
A snapshot of the regulatory developments through mid-2025 follows. DOJ In April, following Executive Order 14178, the DOJ issued a memorandum stating that it will “no longer target virtual currency exchanges, mixing and tum - bling services, and offline wallets for the acts of their end users or unwitting violations of regulations”. Instead, it will focus on: • rug pulls; • hacking of exchanges; • thefts involving decentralised autonomous organi - zations (DAOs); and • “unlawful conduct by cartels, Transnational Crimi - nal Organizations, Foreign Terrorist Organizations, and Specially Designated Global Terrorists”. In addition, the DOJ rescinded inconsistent prior poli - cies and directives, instructing closure of all inconsist - ent ongoing investigations and enforcement actions. Refocusing on fraud, the DOJ: • disbanded its National Cryptocurrency Enforce - ment Team; and • filed civil forfeiture complaints, including a USD214 million “pump and dump” scheme and a USD225 million crypto “pig butchering” scam. The DOJ also worked with the FBI and blockchain analytics companies to successfully link seized crypto to fraud victims. The DOJ updated its corporate self-disclosure policy to set out more certainty about the consequences of misconduct, including deferred prosecution agree - ments. It also provided larger incentives to entities that self-disclose corporate misconduct. SEC The SEC formed its Crypto Task Force to work towards regulatory certainty, increase compliance and combat fraud. It established the Cyber and Emerging Tech - nologies Unit (CETU) to apply AI and machine learn - ing in countering cyber, blockchain and crypto fraud. As mentioned previously, the SEC walked away from
several crypto enforcement actions and litigation over regulatory violations. The SEC has not backed down from combating fraud. It has: • filed fraud charges against a crypto firm that misappropriated USD57 million in a Ponzi-type scheme; • charged a company and its executives over false claims that crypto tokens were backed by real estate; • brought actions against an investment adviser that misappropriated funds from crypto and foreign exchange trading; and • brought actions against an international bond Ponzi scheme. CFTC The CFTC reorganised its Division of Enforcement Task Forces into two units: the Complex Fraud Task Force, and the Retail Fraud and General Enforcement Task Force. The Complex Fraud Task Force investi - gates and litigates fraud and manipulation across all asset classes. The Retail Fraud and General Enforce - ment Task Force investigates and litigates all other CEA violations. The CFTC has issued several public education alerts on fraud and cyber scams, focusing on “relation - ship investment fraud”, “pig butchering” and binary options trading. It also issued other advisories as to how to avoid fraud, including use of generative AI. The CFTC has modified its policy on self-reporting, co-operation and remediation. As revised, the policy provides companies with guidance on penalties and possible abatement, how penalties are calculated, how the CFTC will determine the company’s level of co-operation it receives, and possible remediations. Recent CFTC enforcement actions have included fines for crypto and foreign currency fraud. In May, the CFTC updated its Registration Deficient List (“RED List”) by adding 43 entities, which identifies unregis - tered foreign entities. The RED List is a publicly avail - able list of foreign entities operating in the derivatives markets without CFTC-required registration. It identi -
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