USA Law and Practice Contributed by: Gregory Strong, Sarah W. Chen, Brian Farber and Amil Sumaiya Malik, Cahill Gordon & Reindel LLP
ficking, reflecting the Trump administration’s broader policy of reducing regulatory barriers to crypto-asset innovation. This shift aligns directly with Executive Order 14178’s stated goal of “protecting and promot- ing” access to blockchain networks and banking ser- vices for lawful users without persecution. State Attorneys General State enforcement actions – led by Attorneys General (AGs), securities regulators, and money transmission authorities – are expected to intensify as federal over- sight of digital assets evolves. State AGs have broad authority under consumer protection laws, and some State AGs also enforce state securities laws. For example, less than two months after the SEC dropped its lawsuit against Coinbase, on 18 April 2025 the Oregon State AG sued Coinbase for alleged violations of the Oregon Securities Law, asserting the- ories similar to those previously advanced by the SEC, namely that Coinbase unlawfully encouraged the sale of unregistered cryptocurrencies. As federal agencies reassess their regulatory posture, state-level enforce- ment is likely to become a more prominent mecha- nism for oversight. State Money Transmission Regulators Historically in the USA, states rather than the fed- eral government have been the primary regulators of “money transmitters”. Each state, other than the state of Montana, has independently passed a stat- ute that defines the activities that constitute money transmission in that state. State laws generally define a money transmitter very broadly and typically include any entity that engages in “receiving money for trans- mission” or “transmitting money” or issuing or selling stored value. The scope of each state’s law, and its application to virtual currency, is dependent on how broadly the definitions of “money” and “money transmission” are interpreted by the applicable state regulator. As a result, exchanging virtual currency or facilitating pay- ments in virtual currency may be subject to state-by- state regulation as money transmission. While federal law requires only registration of money transmitters, state law requires licensing. It is signifi-
cant to note that money transmission regulations are extraterritorial; to engage in money transmission a person must have a licence in the state in which it is operating and every state in which it has customers. States have taken different positions with respect to whether crypto-asset activities fall within the definition of money transmission. However, many states have adopted the model Money Transmission Moderniza- tion Act, which has promoted some uniformity across those states. State Securities Regulators State securities regulators enforce and administer state-specific securities laws. These laws are often referred to as “blue sky” laws and are generally similar from one state to the next, but certain aspects can vary significantly. Many state securities statutes are derived from either the 1956 or 2002 version of the Uniform Securities Act. State securities regulators have been very active in regulating cryptocurrency-related investment prod- ucts and the sale of digital asset securities. In the cryptocurrency space, state securities regulators were first to file enforcement actions with respect to cen- tralised lending businesses offering consumers inter- est payments in respect of cryptocurrency deposits. State securities regulators filed cases against BlockFi, Celsius and Voyager prior to their collapses, alleging that their products constituted investment contracts under the Howey test that were required to be regis- tered under the Securities Act or offered pursuant to an exemption from registration. International Standards The USA has implemented international standards in several areas impacting blockchain. Most notably, the USA has been a proponent of applying a corol- lary to the “Travel Rule” – a rule under the BSA that mandates that financial institutions transmit certain identifying information (such as the sender’s and recipient’s name, account number and location) with transfers of funds exceeding USD3,000 – to entities known as virtual asset service providers (VASPs) that process transactions involving crypto-assets. In 2018, the Financial Action Task Force (FATF), a multi-govern- mental organisation that sets global standards relat- ed to anti-money laundering, clarified how the FATF
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