USA Law and Practice Contributed by: Steven Molo, Robert Kry, Megan Cunniff Church and Walter Hawes, MoloLamken LLP
Trade Commission and the Financial Industry Regula - tory Authority also regulate the disclosure of financial information in certain situations, require financial insti - tutions to implement privacy policies, and fine banks for violating privacy laws. 7.3 Crypto-Assets Crypto-assets, commonly known as digital assets, cryptocurrency, virtual currency or digital currency, are digital representations of value that serve, at least theoretically, as a substitute for traditional, fiat cur - rency. Crypto-assets can generally be traded for fiat currencies or other digital assets. Like other assets, they are subject to taxation, freezing and regulation. A comprehensive regulatory regime for crypto-assets is still emerging in the United States. At the federal level, Congress passed legislation in 2025 establish - ing requirements for US stablecoins, including reserve and audit requirements aimed at protecting consum - ers and ensuring financial stability in the stablecoin market. While Congress has also taken up other, more comprehensive, legislation, those efforts remain stalled. Until recently, federal regulators exercised extensive authority over digital assets and aggressively pursued enforcement. Typically relying on existing statutory frameworks, the SEC, Commodity Futures Trading Commission (CFTC), Internal Revenue Service (IRS), Financial Crimes Enforcement Network (FinCEN) and DOJ issued overlapping regulations and guidance, often taking the position that issuers, owners, and traders of digital assets were subject to numerous regulatory requirements. For example, the SEC took a broad view of whether cryptocurrencies consti - tute “securities” subject to the disclosure and anti- fraud requirements of the federal securities laws. The CFTC similarly adopted the position that many digital assets constitute “commodities” subject to its regula - tory authority. Relying on those broad interpretations, federal prosecutors and regulators instituted many enforcement actions against digital asset companies for registration and recordkeeping violations as well as fraud and market manipulation. In 2025, the new presidential administration took a dif - ferent approach. President Donald J. Trump promised
to make the United States the “crypto capital of the world”. Within days of taking office, President Trump signed an Executive Order calling for the promotion of digital assets and blockchain technology, signalling a more lenient regulatory environment. Consistent with that policy announcement, the DOJ, SEC and CFTC have adopted more permissive poli - cy positions and issued revised crypto enforcement guidelines. The DOJ, for example, directed prosecu - tors to focus on cases involving terrorism financing, sanctions evasion, consumer fraud, or cartels and transnational criminal organisations in an attempt to focus on the worst illicit uses of cryptocurrency. The DOJ instructs prosecutors to avoid “regulatory” cases focused on registration requirements, whether a par - ticular entity qualifies as a money transmitter business under federal statutes, or whether a particular digital asset qualifies as a “security” or “commodity”. The SEC and CFTC have likewise stated that they intend to avoid “regulation by enforcement”, and the SEC recently dismissed several landmark registration and classification cases it brought against major crypto - currency companies under the prior administration. However, like the DOJ, both the SEC and CFTC have expressed commitment to pursuing fraud and mar - ket manipulation cases, and each has announced significant fraud-related cryptocurrency enforcement actions since President Trump’s inauguration. Individual states also have their own laws and regula - tions applicable to crypto-assets, but these provisions differ greatly from state to state. Many states regulate cryptocurrency under the existing rules applicable to money transmitter businesses, requiring companies dealing with digital assets to apply for a money trans - mitter licence. Some states also apply state-specific securities laws, often called Blue Sky laws, to digital asset companies. Still other states have developed crypto-specific regimes that overlay additional require - ments, such as anti-money laundering requirements, on top of existing laws. In New York, for example, digital asset companies must obtain a crypto-specific “BitLicense” before conducting certain digital asset activities within the state.
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