USA TRENDS AND DEVELOPMENTS Contributed by: Donald J. Mosher, Melissa G. R. Goldstein, Adam J. Barazani and Leel Sinai, McDermott Will & Schulte LLP
FinCEN has also increasingly aligned its regulatory actions with other administration priorities, including drug trafficking and abuse of US immigration laws. In 2025, FinCEN designated three Mexico-based finan - cial institutions as being of primary money-laundering concerns for allegedly facilitating cartel-linked fenta - nyl trafficking, and, under newly expanded statutory authorities, prohibited certain fund transfers involving US financial institutions. Also that year, FinCEN issued a geographic targeting order to money services busi - nesses located along the southwest border to file cur - rency transaction reports with FinCEN at the USD200 threshold for associated currency transactions. FinCEN also issued an alert urging money services businesses to enhance monitoring and reporting of suspicious cross-border transactions involving funds allegedly derived from unlawful activity connected to undocumented immigrants in the USA. Digital Assets: Regulatory Risks and Opportunities The Trump administration followed through on its cam - paign promises to take a more permissible approach to digital assets, encouraging the institutional adoption of digital asset markets. This shift has been reflected in a retrenchment from enforcement-led oversight, including issuance of regulatory guidance to facilitate bank activity in digital assets and the withdrawal or resolution of high-profile federal enforcement actions against crypto market exchanges. In January 2025, the administration formed a fed - eral Crypto Task Force to develop a comprehensive regulatory framework for digital assets through pub - lic engagement, interagency co-ordination, and poli - cy recommendations, rather than regulation through enforcement. This initiative signaled a broader effort to provide regulatory certainty to market participants and recalibrate supervisory priorities. Meanwhile, the Federal Reserve rescinded SR 23-7, thus ending its Novel Activities Supervision Program, folding over - sight of crypto activities, distributed ledger use, and complex bank–fintech partnerships back into ordinary examinations. The administration dismantled key regulatory barriers that constrained bank participation in the sector. The repeal of SEC Staff Accounting Bulletin 121, togeth - er with the release of OCC Interpretive Letter 1183,
reopened the door for federally supervised banks to provide crypto custody, settlement, and related ser - vices. In March 2025, the FDIC issued FIL-7-2025, which rescinded prior approval requirements for FDIC-supervised institutions engaging in otherwise permissible crypto-related activities, replacing guid - ance that effectively blocked bank participation under the previous administration. In May 2025, the SEC’s Division of Corporation Finance issued a statement indicating that certain protocol staking activities, including solo staking, custodial staking, and related administrative services, do not constitute securities offerings under federal law. OCC Interpretive Letter 1186 clarified that national banks can hold crypto- assets to pay blockchain network fees (“gas fees”) for permitted activities and to test crypto platforms, treating such actions as incidental to the business of banking. OCC Interpretive Letter 1188 confirmed that national banks may conduct riskless principal trans - actions in crypto assets as part of the business of banking, provided they comply with applicable law and meet safety and soundness expectations. Taken together, these actions materially expand the potential role of traditional financial institutions in digital asset markets. In what was perhaps the most consequential develop - ment of 2025, Congress enacted the first federal regu - latory framework for crypto stablecoins, the Guiding and Establishing National Innovation for U.S. Stable - coins Act (GENIUS Act). Designed to bring regulatory clarity, the legislation establishes baseline standards, reserve backing, redemption rights, and issuer disclo - sures. The law assigns primary supervisory authority to federal banking regulators and expressly integrates payment stablecoin issuers into the existing BSA/ AML regime, including customer due diligence and transaction monitoring obligations. The GENIUS Act directs the Federal Reserve, OCC, FDIC, and NCUA, working with Treasury and FinCEN, to implement its requirements through joint rulemaking. As a result, 2026 is expected to be a formative year for the sta - blecoin sector, with multiple requests for information, proposed rules, and interpretive guidance shaping the practical contours of compliance and supervision of stablecoin activity.
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