USA Trends and Developments Contributed by: Dario de Martino and Susan Gault-Brown, A&O Shearman
circumstances in which certain crypto-asset transac- tions are treated as securities transactions. Readers should note that the interpretation is recent, and its precise boundaries will be worked out in subsequent rulemaking and practice. Rulemaking is expected to follow. Chairman Atkins has said that the Commission is preparing a “Regu- lation Crypto” package – including a tailored token- fundraising exemption and an “innovation exemption” intended to operate as a regulatory sandbox – and, as of this writing, has indicated that the proposal is in inter-agency review pending publication for public comment. The Crypto Task Force has signalled that further guidance, and ultimately durable rules, will continue to be issued. The SEC has also unwound much of the litigation inherited from the prior leadership. Across 2025 it dismissed or settled a number of high-profile actions against exchanges, issuers and intermediaries, and closed several open investigations, including its long-running probe of a major US retail brokerage. The pause in “theory” enforcement gave the Com- mission, and Congress, room to address more com- prehensive questions on a considered timeline rather than through case-by-case adjudication. Incorporation of Digital Assets Into the Traditional Financial Sector For years, traditional financial institutions were effec- tively kept out of most digital asset activities. In the space of a few months in 2025, all three federal bank- ing agencies removed the procedural barriers that had made bank participation difficult. On 7 March 2025, the Office of the Comptroller of the Currency (OCC) published Interpretive Letter 1183, rescinding Interpretive Letter 1179 and reaffirming that national banks may engage in certain crypto- asset activities – including custody, holding stable- coin reserves and certain blockchain-based payment activities – without first obtaining a supervisory non- objection, provided they do so in a safe, sound and fair manner. On 28 March 2025, the Federal Deposit Insurance Corporation (FDIC) issued FIL-7-2025, per- mitting supervised institutions to engage in permis- sible crypto-asset activities without prior approval,
subject to appropriate risk management. On 24 April 2025, the Federal Reserve withdrew its 2022 and 2023 supervisory letters that had required advance notifi- cation and non-objection for crypto-asset and dollar- token activities. On 14 July 2025, the three agencies issued a joint statement on risk-management con- siderations for crypto-asset safekeeping, restating existing expectations – control of cryptographic keys, asset-by-asset risk assessment, Bank Secrecy Act and sanctions compliance, and third-party oversight – without imposing new supervisory obligations. Accounting policy moved in parallel. On 23 January 2025, the SEC issued Staff Accounting Bulletin (SAB) 122, rescinding the controversial SAB 121, which had required reporting companies that custody digital assets to carry those holdings as on-balance-sheet liabilities – an approach that diverged from the treat- ment of custodied securities and sharply raised the cost of offering custody. SAB 121 had been chal- lenged by industry, the Government Accountabil- ity Office and Congress, which passed a bipartisan disapproval resolution that President Biden vetoed. Instead, SAB 122 directs custodians to apply estab- lished accounting standards. Together with the bank- ing guidance, the repeal makes it considerably easier for traditional institutions to offer digital asset custody. The exchange-traded fund (ETF) market has matured quickly. Following the approval of spot bitcoin ETFs in January 2024 and spot Ethereum ETFs in July 2024, the SEC approved generic listing standards for com- modity-based trust shares on 17 September 2025. That change allowed qualifying spot crypto products to come to market without a bespoke rule-change application for each one, shortening the path to list- ing considerably and clearing the way for additional single-asset funds. The issuers and service provid- ers include some of the world’s largest asset manag- ers and custodians. With this regulatory scaffolding in place, banks and other institutions are building out offerings spanning custody, ETFs, digital asset- backed lending and blockchain-enabled payments, rather than ceding that ground to less-regulated com- petitors.
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