The blockchain market in the United States of America (“United States” or “US”) is one of the largest in the world by adoption,¹ even when adjusted for GDP per capita on a purchasing power parity basis². Adoption in the US continues to grow in terms of the public’s interaction with cryptoassets and the use of blockchain or other distributed ledger technology more broadly. This adoption has continued despite high profile failures of several blockchain-related companies in 2022 and an increase in regulatory enforcement actions thereafter. The number of adults in the US who are aware of cryptoassets and distributed ledger technologies has grown from less than 50% in 2021 to more than 80% in 2024.³ Similarly, despite the volatility of cryptoasset prices, statistics from the cryptoasset industry indicate that over 50 million Americans own cryptoassets.⁴ With respect to participation in blockchain technology more broadly, it is notable that one third of all nodes on the Ethereum Network,⁵ and one quarter of all nodes on the Bitcoin Network⁶ are based in the US. These figures are approximately double that of the next largest country.⁷

Private sector adoption continues to grow.

The adoption of blockchain technologies is being led primarily by the private sector and most use cases to date are financial in nature. The US is home to several of the world’s largest centralized cryptoasset trading platforms, such as Coinbase, Kraken, Gemini, itBit, and Binance US, as well as the development teams for several of the world’s largest decentralized finance (“DeFi”) protocols, such as those helping develop Uniswap, on which cryptoassets are exchanged and traded. It is also home to blockchain infrastructure providers, including many of the world’s largest crypto wallet providers, such as Consensys, and blockchain forensics companies, such as Chainalysis.

DeFi applications like Uniswap and Compound have seen rapid adoption both in the US and around the world. These platforms provide financial services such as lending, borrowing, and trading, all powered by smart contracts on public permissionless blockchains. At any given time, billions of dollars worth of cryptoassets are “locked” in various DeFi platforms,⁸ highlighting the growing user demand for alternative financial solutions. However, DeFi also faces scrutiny from regulators over concerns regarding anti-money laundering (“AML”)⁹ and investor protection.¹⁰ Many DeFi applications, including Uniswap and Compound, use governance tokens (in the form of UNI and COMP, respectively) through which token holders can issue and vote on proposals related to the governance of the application.

Traditional financial and other institutions have also developed and integrated blockchains into their businesses. For regulatory reasons, these financial institutions to date have typically utilized private, permissioned blockchains, rather than public, permissionless blockchains such as the Ethereum Network. For example, global banks such as JP Morgan have performed blockchain-based collateral settlement transactions on its private blockchain,¹¹ and both Goldman Sachs¹² and Citi¹³ have launched their own private blockchains. Alternatively, when public, permissionless blockchains are used by these financial institutions, it is typically as a secondary ledger, with the “official records” for transactions maintained in traditional formats.¹⁴ Broadridge Financial uses the VMWare Blockchain to facilitate $70 billion worth of repurchase agreements each day,¹⁵ Citi has conducted proof-of-concepts relating to tokenizing private funds,¹⁶ and Franklin Templeton records a money mutual market fund on the Stellar Network that has over $400 million in net assets.¹⁷ BlackRock issued a tokenized fund on the Ethereum Network that has over $500 million in net assets.¹⁸ In total, reports suggest that 80% of all the Fortune 100’s blockchain related projects were conducted by technology and financial services firms,¹⁹ and the cryptoasset industry reports that 56% of Fortune 500 companies have blockchain-related projects underway.²⁰

Institutional adoption of bitcoin as an investment asset increased in the US following the launch of spot bitcoin ETFs—an example notable due to it being possible only upon receipt by the industry of regulatory clarity, even if narrowly tailored.²¹ As of October 2024, spot bitcoin ETFs held over $60 billion in assets under management.²²

Two blockchain uses in particular have begun to gain traction:

First, multiple US-based companies have created so-called “stablecoins”—cryptoassets the value of which is designed to remain pegged to a reference asset—most commonly the US dollar.²³ Stablecoins have emerged as a critical tool for payment solutions. USD Coin (“USDC”), issued by Circle, and Tether (“USDT”), issued by Tether, are widely used in both domestic and cross-border transactions, offering low-cost, near-instantaneous settlements. Circle’s partnership with Visa to integrate USDC into payments networks marks one of the most significant success stories to date, showing real-world utility for blockchain-based payments.²⁴

In DeFi protocols, stablecoins enable lending, borrowing, and other financial activities without the need for traditional financial intermediaries. Stablecoin transactions constitute between approximately 50 and 75% of all on-chain transaction volume.²⁵

Businesses as well as retail customers make payments in the US with stablecoins; for example, PayPal, which launched PYUSD with PYUSD’s issuer Paxos in 2023, has paid Ernst & Young invoices using the PYUSD stablecoin.²⁶ Payments company Stripe recently announced that it has reintroduced cryptoasset payment capabilities, meaning hundreds of thousands of US businesses will soon have cryptoasset payment capabilities through Stripe.²⁷ Other cryptoassets are also used in payments, albeit to a lesser degree than stablecoins. For example, bitcoin can be used to pay taxes in Ohio²⁸ and dogecoin can be used to buy certain products from Tesla.²⁹ Despite the widening popularity of cryptoasset ownership in the US and the growth of stablecoins, the use of cryptoassets for payments in the real economy remains relatively limited. For example, the Federal Reserve found that in 2023, 7% of US adults brought cryptoassets or held them as an investment, but only 2% used cryptoassets to buy something, make a payment, or send money to friends or family, a decrease from both 2021 and 2022.³⁰

Second, tokenization of traditional financial and other assets—commonly regarded in the blockchain industry as “real world assets,” or “RWAs,” is increasingly being regarded as an important use case for blockchain technologies. RWA tokenization refers to the act of representing a non-cryptoasset as a cryptoasset on a blockchain ledger. To date, several billion dollars’ worth of RWAs have been tokenized, including over $1 billion of US Treasuries.³¹ In terms of aggregate dollar values of transactions, the vast majority of the US’s cryptoasset market is driven by institutional adoption rather than widespread consumer or retail use; over 50% of all North American cryptoasset transaction volume consists of transfers of $10 million or more and over 75% consists of transfers of $1 million or more.³²

Not all use cases in the US are financial, however. Non-fungible tokens (“NFTs”) have become popular in the US, especially in the entertainment and art sectors. The success of platforms such as OpenSea (an NFT trading platform), and NFT projects like Bored Ape Yacht Club (“BAYC”) and CryptoPunks, has demonstrated the commercial potential of cryptoassets beyond financial applications. NFTs are also being integrated into gaming. North America was reportedly responsible for over 30% of the NFT gaming market in 2023,³³ with projects such as Yuga Labs’ Otherside exploring virtual worlds. Other examples of nonfinancial use cases include restaurant NFTs³⁴ and databases for doctors to manage sensitive health information.³⁵ In other cases, NFTs overlap with financial uses, for example through tokenization of interests in US real estate.³⁶

A number of retailers of various sizes have also incorporated NFTs into their business, such as large companies like 7-Eleven³⁷ and small companies like Atlas Cafe coffeehouse in San Francisco,³⁸ although many companies shut down their NFT-based programs in 2024 due to declining NFT usage or regulatory uncertainties.³⁹ Regulatory scrutiny of NFTs increased in 2024. For example, in July 2024 DraftKings announced it was discontinuing its “Reignmakers” NFT offering and its NFT marketplace, effective immediately, “due to recent legal developments,”⁴⁰ and in August 2024, OpenSea announced that it had received a Wells notice from the SEC, indicating that the SEC was planning to sue OpenSea on the grounds that NFTs traded on its platform constituted unregistered offerings of securities in violation of the securities laws.⁴¹

Public sector use cases are being explored, but have not been deployed at scale.

To date, the federal government has launched a number of investigations and initiatives into the potential use cases of blockchain technology. These investigations and initiatives are at various stages of maturity, though most remain at the exploratory stages.

The Board of Governors of the Federal Reserve System and several Federal Reserve Banks (the “FRB” and, with the Federal Reserve Banks, the “Federal Reserve”) have collaborated on a number of projects evaluating hypothetical central bank digital currencies (“CBDCs”), described more fully in question ‎3.

Elsewhere, the Department of the Treasury, the Government Accountability Office, the Office of Management and Budget and the Office of Personnel Management collaborated on a two-year study into the potential uses for blockchain technology in the federal government (i.e., an interagency blockchain).⁴² The review stated that: (1) more work is likely needed to prepare the federal government for interagency blockchains and (2) those agencies beginning to consider the process of implementing blockchain solutions should carefully compare the potential costs and challenges to the benefits of the technology and proceed accordingly.⁴³

Despite the federal government’s cautious approach to implementing blockchain technology, several non-financial use cases have been adopted. The most widespread use cases to date relate to the defense and security sectors. For example, SIMBA Chain has developed a number of blockchain-based applications for the Department of Defense and the government’s strategic defense funding mechanism has provided SIMBA Chain $30 million to continue developing blockchain-based solutions for the US Air Force.⁴⁴ The Department of Homeland Security also has a number of blockchain-based programs in various stages of development and testing.⁴⁵

Some state governments have also implemented blockchain-powered projects, such as the California Department of Motor Vehicles digitizing over 40 million car titles using blockchain technology in 2024.⁴⁶ Other states have announced other ambitious plans but have yet to implement them, such as the Rhode Island Department of Commerce’s attempt to integrate records from a number of agencies across its state government into a single blockchain-based system.⁴⁷

The key theme influencing the use of blockchains in the US.

Generally, and as described more fully in the questions that follow, the blockchain industry in the US has been constrained to a large degree by unfavorable regulatory treatment and regulatory uncertainty.⁴⁸ This regulatory quagmire relates to both cryptoassets and blockchain technology more generally. With respect to cryptoassets, regulatory uncertainty exists as to their proper treatment under a wide variety of laws, including securities laws, commodities laws and tax laws. There is also uncertainty as to the regulatory classification for various users of blockchain technology. For example, it is unclear what requirements, if any, apply to nodes and miners (e.g., whether money transmission, tax reporting, or sanctions laws apply).

In sum, the US has become a global hub for blockchain innovation, though it also faces significant regulatory challenges. Cryptoassets are used across multiple sectors, from DeFi to gaming, and in the form of stablecoins and NFTs. The success stories highlight the country’s capacity for technological growth, but the limitations on their use—in particular for non-financial uses cases—emphasize the need to clarify legal hurdles and develop clearer regulatory frameworks.

Federal blockchain-specific legislation

There is currently no federal blockchain-specific legislation in the US. Nonetheless, there have been several bills introduced in Congress that propose to establish additional regulation and oversight of the cryptoasset markets and stablecoins.⁴⁹

Market Structure Bills

One of the biggest hurdles to cryptoasset and blockchain adoption in the US today is the uncertain regulatory status of cryptoassets under federal securities laws and the unsuitable and in many ways incompatible laws and regulations that would be applicable if cryptoassets are securities. Several bills have been introduced that attempt to mitigate or remove this uncertainty and unworkability. Among others, Senators Stabenow and Boozman sponsored the Digital Commodities Consumer Protection Act of 2022;⁵⁰  Senators Lummis and Gillibrand sponsored the Responsible Financial Innovation Act;⁵¹  and Representative McHenry and others sponsored the Financial Innovation and Technology for the 21^st Century Act (FIT 21).⁵² Each of these bills are attempts to regulate spot markets for the trading of cryptoassets, primarily by attempting to clarify that the cryptoassets are generally not securities and are therefore not subject to Securities and Exchange Commission (“SEC”) jurisdiction. Instead, these bills generally seek to grant jurisdiction to over spot market cryptoasset security activities to the Commodity Futures Trading Commission (“CFTC”). While the House of Representatives passed FIT 21 in May 2024 on a relatively bipartisan basis,⁵³ it has so far not received traction in the Senate.

Stablecoin Bills

Stablecoins today represent one of crypto’s most direct connections with the traditional financial sector. Their relatively well-defined nature and implications for the banking system, and financial stability more broadly, make stablecoin-focused legislation one of Congress’ focus areas. Here too, a number of discussion drafts and proposed bills have been introduced. These bills include the Representative Gottheimer proposed Stablecoin Innovation and Protection Act of 2022;⁵⁴ the Senators Hagerty and Hollingsworth sponsored Stablecoin Transparency Act;⁵⁵ the Senator Toomey sponsored Stablecoin TRUST Act of 2022;⁵⁶ the Senators Lummis and Gillibrand sponsored Payment Stablecoin Act;⁵⁷ a draft bill by Representative Waters; and a Representative McHenry sponsored bill called the Clarity for Payment Stablecoins Act of 2023.⁵⁸

Representative McHenry’s Clarity for Payment Stablecoins Act of 2023 advanced out of the House Financial Services Committee in the summer of 2023 but has not yet been brought to a floor vote. At the forefront of the current debate among policymakers are competing views on how to allocate authority between federal and state regulators over stablecoin issuers.⁵⁹ Senator Hagerty’s discussion draft of a stablecoin bill, called the Clarity for Payment Stablecoins Act of 2024, seeks to bridge the gap between these competing views and may reflect a path forward for broader compromise.⁶⁰

Blockchain-specific federal regulatory efforts

Even without blockchain-specific federal legislation, a number of US federal agencies and self-regulatory organizations (including the Financial Crimes Enforcement Network, Office of Foreign Assets Control, SEC, CFTC, Financial Industry Regulatory Authority (“FINRA”), the Consumer Financial Protection Bureau (“CFPB”), the Department of Justice, the Department of Homeland Security, the Federal Bureau of Investigation, the Internal Revenue Service (“IRS”), the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Federal Reserve) have been examining the operations of blockchains, cryptoassets, cryptoasset users and the cryptoasset markets. These federal regulators have particularly focused on the extent to which cryptoassets can be misused to launder the proceeds of illegal activities, evade sanctions, or fund criminal or terrorist enterprises, as well as the general safety and financial stability of cryptoasset trading platforms and other service providers that hold cryptoassets for users. Despite the focused attention on blockchains and cryptoassets, these regulators have issued only limited regulations and guidance pertaining to blockchains and cryptoassets, and in most cases these regulations and guidance explain the regulators’ views as to how blockchains and cryptoassets should be treated under existing law and regulations, rather than create a new regulatory regime that is more tailored for cryptoassets and blockchains.

SEC

The SEC has taken steps to interpret its existing authorities as covering various cryptoasset activities. In April 2019, the SEC’s Strategic Hub for Innovation and Financial Technology released a “Framework for ‘Investment Contract’ Analysis of Digital Assets” in which it explained the SEC staff’s views as to what factors may make a cryptoasset meet the Howey⁶¹ test and therefore be an investment contract which is a security under US federal securities laws.⁶² Under the Howey test, a contract, transaction or scheme is an investment contract which is a security when there is (i) an investment of money, (ii) in a common enterprise, (iii) with an expectation of profits solely from the efforts of the promoter or a third party.⁶³ Analyzing whether a cryptoasset or a cryptoasset transaction, and secondary market transactions in particular, meets the Howey test is difficult to resolve definitively, and substantial legal arguments can often be made both in favor of and against a particular cryptoasset or cryptoasset transaction qualifying as a security under the Howey test. Adding to the complexity, the SEC staff has indicated that the security status of a particular cryptoasset can change over time as the relevant facts evolve.

In March 2022, the SEC released Staff Accounting Bulletin No. 121 (“SAB 121”). SAB 121 generally directs public companies that custody cryptoassets on behalf of customers to recognize a liability on their balance sheet equivalent to the value of those assets, and also recognize a corresponding and offsetting asset.⁶⁴ In December 2022, the SEC proposed Regulation Best Execution, which would establish an SEC-level best execution regulatory framework for brokers, dealers, government securities brokers, government securities dealers, and municipal securities dealers.⁶⁵ The proposed rule release stated that the proposed Regulation Best Execution would apply to all securities, including what the SEC views as cryptoasset securities.⁶⁶ In February 2023, the SEC proposed amendments to the custody rules under Rule 406(4)-2 of the Investment Advisers Act.⁶⁷ The proposed rule changes would amend the definition of a “qualified custodian” under Rule 206(4)-2(d)(6) and expand the current custody rule in 406(4)-2 to cover cryptoassets (whether or not securities) and related advisory activities.⁶⁸ In April 2023, the SEC reopened for comment a proposed amendment to the definition of an “exchange” under Exchange Act Rule 3b-16.⁶⁹ In the reopening release, the SEC provided supplemental information regarding trading systems for cryptoasset securities that explained that the proposed rule could apply to DeFi protocols to the extent they meet the definition of “exchange.”⁷⁰ In February 2024, the SEC adopted a rule that expands the definition of “dealer” and “government securities dealer” under Rules 3a5-4 and 3a44-2 of the Exchange Act.⁷¹ In the final rule release, the SEC confirmed that the new rule applies to activities involving cryptoasset securities.⁷² If enacted as proposed, these rules would likely impose additional regulatory requirements with respect to the trading in, custody and storage of cryptoassets and could lead to additional regulatory oversight of the cryptoasset ecosystem more broadly.

Blockchain-specific state legislation

Over 50 different blockchain- or cryptoasset-specific bills have been enacted across approximately half of all US states. Most notable are significant pieces of legislation that provide for wholescale regulation of blockchain and cryptoasset activities in those states. In Louisiana, the Virtual Currency Businesses Act (“VCBA”) was the first comprehensive state law establishing a comprehensive standalone regulatory regime for cryptoasset activities.⁷³ The primary purpose of the Virtual Currency Business Act is to require licensure for any person to engage in “virtual currency business activity” with or on behalf of a resident of Louisiana. California has enacted a similar law, the Digital Financial Assets Law (“DFAL”), which will prohibit after July 1, 2026 any person from engaging in “digital financial asset business activity” or holding itself out as being able to engage in digital financial asset business activity, with, or on behalf of, a resident of California, unless it is duly licensed with the California Department of Financial Protection and Innovation.⁷⁴ Both the Louisiana VCBA and California DFAL are based on the New York Department of Financial Services’ (NYDFS) “BitLicense” regulation, described below. Like the BitLicense, these two statutes define the relevant cryptoasset category as “a digital representation of value that is used as a medium of exchange, unit of account, or store of value, and that is not legal tender, whether or not denominated in legal tender”⁷⁵ subject to certain exceptions.⁷⁶ Under DFAL, covered activities, “digital financial asset business activity” includes: “(1) Exchanging, transferring, or storing a digital financial asset or engaging in digital financial asset administration, whether directly or through an agreement with a digital financial asset control services vendor. (2) Holding electronic precious metals or electronic certificates representing interests in precious metals on behalf of another person or issuing shares or electronic certificates representing interests in precious metals. (3) Exchanging one or more digital representations of value used within one or more online games, game platforms, or family of games for either of the following: (A) A digital financial asset offered by or on behalf of the same publisher from which the original digital representation of value was received. (B) Legal tender or bank or credit union credit outside the online game, game platform, or family of games offered by or on behalf of the same publisher from which the original digital representation of value was received.”⁷⁷

Some states have introduced more specific legislation to address discrete issues with blockchains and cryptoassets. For example, Wyoming enacted the Decentralized Unincorporated Nonprofit Association Act⁷⁸ and New Hampshire enacted the New Hampshire Decentralized Autonomous Organization Act⁷⁹ in 2024 to give certain qualifying decentralized autonomous organizations (“DAOs”) a separate legal entity status under applicable state law (where previously a DAO would likely have qualified as a general partnership or similar) and provide for the application of numerous traditional corporate legal concepts to such DAOs. Others yet have enacted legislation that purports to ban CBDCs⁸⁰ And a number of states have enacted changes to their implementation of the Uniform Commercial Code (“UCC”) (see question ‎9).

Blockchain-specific state regulatory frameworks

First proposed in 2014 and issued in June 2015, NYDFS’s so-called BitLicense regulation was the first comprehensive cryptoasset regulatory framework in the US. Like the statutory regimes in Louisiana and California, a person that engages in “Virtual Currency Business Activity” in New York is required to be licensed by the NYDFS. For these purposes, Virtual Currency Business Activity includes: receiving Virtual Currency for transmission or transmitting Virtual Currency; storing, holding, or maintaining custody or control of Virtual Currency on behalf of others; buying and selling Virtual Currency as a customer business; performing exchange services as a customer business; or controlling, administering, or issuing a Virtual Currency.⁸¹ As of October 15, 2024, over 30 entities were regulated by NYDFS either as BitLicensees or New York Limited Purpose Trust Companies with permission to engage in cryptoasset activities.⁸²

To supplement the BitLicense regulation, the NYDFS has issued approximately a dozen pieces of guidance further shaping the activities of cryptoasset businesses in New York. These pieces of guidance cover topics as varied as market manipulation,⁸³ the use of blockchain analytics,⁸⁴ the issuance of stablecoins,⁸⁵ custodial structures,⁸⁶ token listing⁸⁷ and corporate governance.⁸⁸ The NYDFS has also issued guidance regarding cryptoasset related activity for all New York banking organizations, whether or not currently authorized to engage in cryptoasset activity.⁸⁹

Guidance

A number of federal agencies have issued guidance concerning the use of blockchain technology. The CFTC, for example, issued interpretive guidance in 2020 regarding “Retail Commodity Transactions Involving Certain Digital Assets.”⁹⁰ The SEC has issued guidance in many forms. For example, in 2017, the SEC issued the “DAO Report” in which it first explained why it believed cryptoasset offerings may be securities transactions under the federal securities laws.⁹¹ Then, in 2019, the SEC issued more formal guidance in the form of its Framework for “Investment Contract” Analysis of Digital Assets.⁹² The Framework was explicitly “not a rule, regulation, or statement of the Commission, and the Commission has neither approved nor disapproved its content.”⁹³ Elsewhere, senior staff of the SEC made public statements that the industry understood as guidance, such as when William Hinman, Director of the Division of Corporation Finance announced that “current offers and sales of Ether are not securities transactions.”⁹⁴

Unlike the SEC, the federal prudential financial regulators have instead issued more formal guidance, reflecting their cautious approach to the industry as described in question ‎4.

The NYDFS, which regulates BitLicensees and New York chartered Limited Purpose Trust Banks with authority to engage in virtual asset activity, has issued various pieces of guidance to the entities it regulates and supervises as described in question ‎4.

Formal guidance (as distinct from, for example, regulation by enforcement and formal rulemaking) from other regulators has been sparse. Notable exceptions include FinCEN, discussed further in question ‎5, which issued one of the earliest pieces of blockchain-related guidance in 2013,⁹⁵ which it supplemented in 2019.⁹⁶ FinCEN subsequently proposed formal blockchain-related rules.⁹⁷

The Biden administration has generally been viewed as hostile to blockchain technology and cryptoassets. Even so, the degree of hostility differs materially among the various federal agencies. As described below, the SEC has been one of the most aggressive federal regulators with respect to cryptoassets in the US. The SEC, and its Chair in particular, have been unwavering in their view that the industry is guilty of “wide-ranging noncompliance” and is “a field rife with fraud, scams, bankruptcies, and money laundering.”⁹⁸ Despite the SEC’s view, other market regulators such as the CFTC are perceived as taking a more accommodating approach, which has led many in the industry to believe that the CFTC would be a more accommodating, or at least less hostile, markets regulator than the SEC, a view that is reflected in several of the proposed bills listed in question ‎1. Despite the perception that the CFTC is a less hostile regulator, it too has filed a number of complaints against a wide range of cryptoasset market participants for alleged violations of the Commodity Exchange Act and the CFTC’s regulations promulgated thereunder, including against protocol developers⁹⁹ and cryptoasset trading platforms and their control persons.¹⁰⁰ The CFTC has at times taken novel interpretations to enforce or attempt to enforce rules it deems applicable to the blockchain industry, and DeFi applications in particular.¹⁰¹

At the prudential banking regulators, described in more detail below, the attitude can be described as cautious. It should be noted, however, that this approach is generally (with exceptions noted below) in keeping with ordinary banking regulator behavior. The DOJ has taken an active role in enforcing criminal statutes against those involved in the blockchain industry, recently and most notably by bringing charges against the developers of the Tornado Cash application.¹⁰² Finally, as described in question ‎6, the IRS has altered various existing tax forms to account for cryptoasset transactions¹⁰³ and has introduced new forms and promulgated rules that would mandate custodial “brokers,” as defined by the IRS, to report investor sales and exchanges of cryptoassets beginning in 2025.¹⁰⁴

The SEC

The SEC has brought enforcement actions against almost all of the large cryptoasset trading platforms with US activities¹⁰⁵ and in 2024 alone has sued a number of other well-known market participants, including DAOs,¹⁰⁶ issuers and foundations,¹⁰⁷ NFT issuers,¹⁰⁸ investment advisors,¹⁰⁹ bank holding companies,¹¹⁰ as well as others alleged to have committed fraudulent or other illegal actions.¹¹¹

The SEC’s hostility toward crypto has also been reflected in the SEC’s rulemaking and related statements. At times, the leadership of the SEC has taken the view that the cryptoasset ecosystem requires more explicit regulatory oversight and that the SEC should have more explicit regulatory authority over the cryptoasset ecosystem. For example, in August 2021, the Chair of the SEC stated that he believed investors using cryptoasset trading platforms are not adequately protected, and that activities on the platforms can implicate the securities laws, commodities laws and banking laws, raising a number of issues related to protecting investors and consumers, guarding against illicit activity, and ensuring financial stability.¹¹² The Chair repeatedly expressed a need for the SEC to have additional authorities to prevent transactions, products, and platforms from “falling between regulatory cracks,” as well as for more resources to protect investors in “this growing and volatile sector.”¹¹³ The Chair called for federal legislation centering on cryptoasset trading, lending, and DeFi platforms, seeking “additional plenary authority” to write rules for cryptoasset trading and lending.¹¹⁴

More recently, however, the SEC���s leadership, and the Chair in particular, have stated that they believe the law as applied to cryptoassets and cryptoasset market participants is clear and that there is no need for additional explicit authorities.¹¹⁵ As part of this shift, the SEC has alleged that many cryptoasset market participants are not in compliance with existing regulations applicable to them. For example, in May 2024, the Chair of the SEC said, “the crypto industry’s record of failures, frauds, and bankruptcies is not because we don’t have rules or because the rules are unclear,” but rather, “it’s because many players in the crypto industry don’t play by the rules.”¹¹⁶ As described in question ‎1, the SEC has also taken steps to interpret its existing authorities as covering various cryptoasset activities.

Despite the SEC’s apparent view that it has existing regulatory authority over cryptoasset market participants, numerous entities have sued the SEC requesting the SEC to issue blockchain- and cryptoasset-specific regulations. Coinbase, a cryptoasset trading platform, petitioned the SEC to commence a rule-making to clarify its standards for determining whether cryptoassets may be securities, and to create an avenue for cryptoasset issuers and exchanges to register when required.¹¹⁷ After the SEC denied the petition, Coinbase brought suit in the Third Circuit Court of Appeals to try to compel the SEC to commence the requested rulemaking, and the case is currently ongoing.¹¹⁸ Other litigants have sued the SEC in more targeted suits: Consensys sued the SEC and asked the District Court for the Northern District of Texas to declare that Ether is not a security,¹¹⁹ which was dismissed.¹²⁰ Crypto.com sued the SEC arguing that the SEC has exceeded its authority with respect to crypto market participants.¹²¹ Others, like two trade associations, have sued the SEC challenging certain of the rulemakings described above.¹²²

There is broad disagreement regarding the proper treatment of cryptoassets among the SEC’s commissioners. Commissioner Hester Peirce, for example, is known to disagree with Chair Gensler’s stance on cryptoassets. In addition to consistently taking opposing views to the Chair in SEC actions,¹²³ Commissioner Peirce, in an effort to combat the uncertainty caused by the SEC’s approach, proposed a “Token Safe Harbor” whereby cryptoasset and blockchain based entrepreneurs could launch their blockchain projects without needing to comply with federal securities laws.¹²⁴ The safe harbor proposal, while not adopted, has served as a template for subsequent bills such as the Senators Lummis and Gillibrand’s Responsible Financial Innovation Act (see question ‎1). Commissioner Peirce continues to advocate for a sandbox approach that would enable cryptoasset entrepreneurs to develop their projects in legally compliant manners without risk of an SEC enforcement action. Most recently, she proposed to the Bank of England and the UK’s Financial Conduct Authority a cross-border “Micro Innovation Sandbox” that would allow firms to perform certain activities in the US under a self-selected set of regulatory conditions.¹²⁵

The White House

The White House has in many respects been in an information gathering phase. President Biden initiated the first whole-of-government review of cryptoassets and blockchain technology via a March 2022 Executive Order on Ensuring Responsible Development of Digital Assets (the “Executive Order”).¹²⁶ This executive order mandated a number of reports related to cryptoassets and blockchains as part of a whole-of-government review of cryptoasset policy and regulation.

¹²⁷

Multiple agencies published requests for information pursuant to the Executive Order. For example, in May 2022, the International Trade Administration published a Request For Comment on Developing a Framework on Competitiveness of Digital Asset Technologies.¹²⁸ And in July 2022, the Treasury Department published a Request for Comment on Ensuring Responsible Development of Digital Assets pursuant to the Executive Order.¹²⁹ The Treasury Department received 272 comments from a wide range of commenters, spanning individuals, trade groups, cryptoasset market participants, traditional financial market infrastructure providers and market participants, academics, globally systemically important banks, social media companies, and more.¹³⁰ This request for comment was followed by a second Treasury request in September 2022 specifically focused on cryptoasset-related illicit finance and national security risks.¹³¹

In 2022, the Financial Stability Oversight Council (“FSOC”) issued a report pursuant to President Biden’s Executive Order that assessed the financial stability risks of the cryptoasset ecosystem using a framework for vulnerabilities and shocks pioneered by the Federal Reserve, and made several recommendations for regulatory reform.¹³² It revealed a continuing lack of consensus and turf wars among the US financial regulators, something that continues into 2024. The report identified three principal gaps in the regulation of those activities: (1) limited direct federal oversight of the spot market for cryptoassets that are not securities, (2) opportunities for regulatory arbitrage and (3) the vertical integration of cryptoasset services – and included ten recommendations for closing those gaps and addressing other identified regulatory considerations.¹³³

Upon receiving the reports required in the executive order, the Biden administration released a “Comprehensive Framework for Responsible Development of Digital Assets.”¹³⁴ The framework noted that the various reports suggested that regulation should (i) protect consumers, investors and businesses; (ii) promote access to safe, affordable financial services; (iii) foster financial stability; (iv) advance responsible innovation; (v) reinforce the US’s global financial leadership and competitiveness; (vi) fight illicit finance; and (vii) explore the implementation of a CBDC (discussed more in question ‎3).

Congress 

As described in question ‎1, several cryptoasset-related bills have been produced in Congress. Although none of the bills described in question ‎1 have yet become law, the effort demonstrates that many in Congress believe that some form of federal legislation is necessary. Cryptoasset regulation and legislation is not immune from the partisan divide seen in American politics in recent years, and so it is no surprise that a wide divide has formed between those, like Chair of the House Financial Services Committee Representative Patrick McHenry, who are in favor of the blockchain industry, and those like Senator Elizabeth Warren, who are not. While some of the disagreements are along partisan lines, bipartisan consensus has been reached on some discreet issues.¹³⁵ To illustrate the divide, in addition to the bills described in question ‎1, Chair Representative McHenry has introduced a bill known as the Financial Services Innovation Act of 2024 which would establish regulatory sandbox programs at various financial regulatory agencies.¹³⁶ The House Financial Services Committee voted to advance the bill in a partisan vote in April 2024 but the bill has not yet gone further or been implemented. Elizabeth Warren, on the other hand, has described herself in campaign ads as “building an anti-crypto army.”¹³⁷ It is possible, however, that cryptoasset will become more of a bipartisan issue after the upcoming election.

States

As described in questions ‎1 and ‎12, a number of state regulators have entered into enforcement actions against cryptoasset and blockchain companies. In addition, while networks utilizing proof-of-stake (“PoS”) consensus mechanisms have made strides toward energy efficiency, Bitcoin’s proof-of-work (“PoW”) mining continues to attract criticism. Some US states, such as New York, have imposed temporary moratoriums on crypto mining operations pending environmental reviews.¹³⁸ Others, such as Texas, which has been significantly more supportive of the blockchain industry, is considering new legislation based on fears about the energy consumption of crypto mining operations in the state.¹³⁹

Even so, states have generally been more accommodating than the federal government. For example, states including Arizona, Florida, West Virginia, Wyoming and Utah enacted legislation to create cryptoasset sandboxes.¹⁴⁰ In Hawaii, the state’s cryptoasset sandbox concluded in 2024 and resulted in Hawaiian regulators determining that rather than introducing a special cryptoasset licensing scheme in the Hawaii, cryptoasset companies would no longer require a Hawaii-issued money transmitter license to conduct cryptoasset-related business within the state.¹⁴¹

CBDCs

Despite increasing international attention of CBDCs, and the launch of some high-profile CBDCS such as in China, the US is unlikely to create one in the near future. The Federal Reserve, which is responsible for monetary policy, “has made no decisions on whether to pursue or implement” a CBDC¹⁴² and has stated the launch of a CBDC in the US is “[not] remotely close to happening any time soon.”¹⁴³ Nonetheless, the Federal Reserve has taken steps to help it assess whether it should issue a US CBDC in the future. For example, in 2022, the Federal Reserve released a paper on a potential US CBDC that summarized the risks and benefits of a US CBDC, which it defined as a “digital liability of a central bank that is widely available to the general public.”¹⁴⁴ The Federal Reserve also released a summary of the public comments it received.¹⁴⁵

In addition, the Federal Reserve has participated in a number of pilot programs evaluating the technical feasibility and desirability of CBDCs. For example, the Federal Reserve Bank of Boston has collaborated with the Massachusetts Institute of Technology in “Project Hamilton” to research and explore the use of existing and new technologies, such as blockchains, to build and test a hypothetical CBDC platform.¹⁴⁶ Although a report on Project Hamilton stated that “select ideas from cryptography, distributed systems, and blockchain technology can provide unique functionality and robust performance…”, a blockchain-based approach was determined to be limited by the researcher’s assumption that a CBDC would need to be administered by a central actor.¹⁴⁷ The Federal Reserve Bank of New York has similarly participated in Project Cedar with the Monetary Authority of Singapore in which the research experiment examined, among other things, the ability of distributed ledger technology to establish connectivity across heterogenous simulated currency ledgers to reduce settlement risk and decrease settlement time,¹⁴⁸ as well as an international technical research project with the Bank of International Settlements’ Innovation Hub and the Institute of International Finance exploring whether the tokenization of central bank money and commercial bank deposits operating on a shared programmable ledger can improve wholesale cross-border payments.¹⁴⁹

A US CBDC is not likely to be issued in the near future for a number of reasons. First, many Republican legislators are uniformly against it. At the federal level, the House of Representatives passed a bill sponsored by Representative Tom Emmer that would prohibit the Federal Reserve from issuing a CBDC and from using a CBDC to implement monetary policy.¹⁵⁰ As described in question ‎1, a number of Republican-controlled state legislatures have also taken action to purportedly ban a US CBDC from being used in their states.¹⁵¹ Second, it is not yet clear what steps must be taken before the Federal Reserve is able to issue a US CBDC. Although the Chair of the Federal Reserve has stated that a US CBDC could only be implemented after obtaining Congressional approval,¹⁵² the Attorney General’s analysis of whether legislation is necessary for a US CBDC has not yet been made publicly available.¹⁵³ Despite the hesitation in government, studies suggest that a slight majority of consumers are receptive to the concept of a US CBDC.¹⁵⁴

In the US, financial regulation at the federal level is separated primarily between the prudential banking regulators—the Federal Reserve, the OCC and the FDIC—on the one hand, and the trading and markets regulators—the SEC and CFTC—on the other. The SEC and CFTC have actively litigated against alleged wrongdoers in the cryptoasset industry as described in question ‎2 and both believe they have jurisdiction over relevant activities because of the status of cryptoassets (or transactions in cryptoassets) as either securities (in the case of the SEC) or commodities (in the case of the CFTC).

Prudential Banking Regulators

The prudential banking regulators generally regulate banking and similar organizations regardless as to whether the specific cryptoasset is a security or a commodity. They have issued a series of interpretive letters and other forms of guidance explaining to supervised entities what the expectations are with respect to blockchain- and cryptoasset-related activities. For example, they issued a “Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities”¹⁵⁵ and a “Joint Statement on Crypto-Asset Risks to Banking Organizations”¹⁵⁶ in 2023.

The Federal Reserve

The Federal Reserve has issued a number of policy statements and public guidance concerning banking organization involvement in blockchain and cryptoasset activities.

In 2023, the Federal Reserve released a letter informing the public that it had created a “Novel Activities Supervision Program” focusing on supervision regarding (i) “[c]omplex, technology-driven partnerships with non-banks to provide banking services”; (ii) cryptoasset related activities including “custody, crypto-collateralized lending, facilitating crypto-asset trading, and engaging in stablecoin/dollar token issuance or distribution”; (iii) projects using distributed ledger technology “with the potential for significant impact on the financial system”; and (iv) banking organizations whose business models are “concentrated in providing traditional banking activities such as deposits, payments, and lending to crypto-asset-related entities and fintechs.”¹⁵⁷ The Federal Reserve later provided additional information on the Novel Activities Supervision Program’s focus on “dollar tokens” whereby it described the supervisory nonobjection process for state chartered member banks seeking to engage in certain activities involving blockchain-based “dollar tokens.”¹⁵⁸ Separately, the Federal Reserve issued a “Policy Statement on Section 9(13) of the Federal Reserve Act” in which it interpreted the authority of state member banks to engage in cryptoasset activities.¹⁵⁹ Notably, the Policy Statement stated that “legal permissibility is a necessary, but not sufficient, condition to establish that a state member bank may engage in a particular activity.”¹⁶⁰

In addition to regulatory guidance, the Federal Reserve has analyzed various applications related to entities engaged in cryptoasset- and blockchain-related activities. For example, the Federal Reserve denied Custodia Bank, Inc.’s applications to (1) become a member of the Federal Reserve System and (2) obtain a “master account” through which it would be able to utilize a number of Federal Reserve services such as the discount window and settle transactions in central bank money.¹⁶¹ Custodia has a Special Purpose Depository Institution (“SPDI”) charter from the State of Wyoming that allows it to take deposits but does not, for example, require it to apply for deposit insurance from the FDIC. In denying Custodia’s Federal Reserve membership application, the Federal Reserve characterized Custodia’s business model as focusing “almost exclusively on offering products and services related to novel crypto-asset asset activities … an unprecedented business model that presents heightened risks involving activities that do not currently have clarity at the federal level.”¹⁶² Custodia has separately sued the Federal Reserve’s denial of its application for a master account. The U.S. District Court for the District of Wyoming upheld the Federal Reserve’s denial of Custodia’s application, reasoning that the Federal Reserve had the discretion to deny Custodia a master account even though Custodia was legally eligible to have one.¹⁶³ Elsewhere, the Federal Reserve has found that certain applicants are “engaged in crypto-asset related activities that the [Federal Reserve] has not found to be permissible for a bank holding company or a financial holding company” and therefore required the applicant to divest from its impermissible investments or activities or conform them to the requirements of the Bank Holding Company Act.¹⁶⁴

The OCC

Just like the Federal Reserve, the OCC has issued a number of policy statements and public guidance concerning national bank involvement in blockchain and cryptoasset activities and also acted through a series of other actions.

Under former Acting Comptroller Brian Brooks (who held the role during the Trump administration), the OCC issued guidance via several Interpretive Letters: (i) Interpretive Letter 1170 allows national banks and federal savings associations to provide custody services for cryptoassets, including the safekeeping of cryptographic keys;¹⁶⁵ (ii) Interpretive Letter 1172 allows national banks and federal savings associations to hold dollar deposits serving as reserves backing stablecoins in certain circumstances;¹⁶⁶ and (iii) Interpretive Letter 1174 clarifies the authority of national banks and federal savings associations to (1) act as nodes on an independent node verification network (i.e., distributed ledger) to verify customer payments and (2) engage in certain stablecoin activities to facilitate payment transactions on a distributed ledger.¹⁶⁷ The OCC under Acting Comptroller Michael Hsu (under the Biden administration) has taken a relatively more circumspect approach. For example, the OCC issued guidance in Interpretive Letter 1179 that clarified that national banks and federal savings associations must receive OCC nonobjection and demonstrate that their cryptoasset activities can be performed in a safe and sound manner prior to engaging in the activities described under the previous interpretive letters.¹⁶⁸ Acting Comptroller Hsu has also given many speeches that emphasize a cautious approach to the oversight of cryptoasset activities.

Since 2021, the OCC has provisionally or conditionally granted three national trust bank charters.¹⁶⁹ As of October 2024, however, all three “remain in regulatory limbo” and none have since been approved.¹⁷⁰ The OCC has separately required that applicants divest from¹⁷¹ or refrain from engaging in¹⁷² cryptoasset related activities, or do not assume cryptoasset-related liabilities,¹⁷³ as a condition to approval.

FDIC

The FDIC, in addition to co-authoring the joint notices mentioned above, has published guidance to address risks related to the industry. For example, the FDIC published an “Advisory to FDIC-Insured Institutions Regarding FDIC Deposit Insurance and Dealings with Crypto Companies” in which it listed a number of risks, concerns, and risk management and governance considerations for FDIC-insured entities.¹⁷⁴ The FDIC has also issued letter to FDIC-supervised institutions requiring, like the Federal Reserve and OCC, prior notification and interaction with supervisors prior to engaging in covered “crypto-related activities.”¹⁷⁵ In addition, the FDIC not only supervises certain institutions but also operates the federal deposit insurance program,¹⁷⁶ and as a result it has authorities that extend beyond just banking organizations. To that end, the FDIC has amended certain of its regulations to modernize the rules governing advertising of deposit insurance in response to a number of cryptoasset projects that allegedly falsely advertised that FDIC insurance applied to their projects.¹⁷⁷ The FDIC has issued over a dozen cease-and-desist letters to cryptoasset and fintech projects for, predominantly, falsely advertising their projects as benefiting from FDIC insurance.¹⁷⁸

Federal Financial Regulators Generally

The federal financial regulators have also, like the White House, engaged in a number of information gathering efforts. In 2021, two federal financial regulators published requests for information and comments on cryptoassets. First, in May 2021, the FDIC published a Request for Information and Comment on Digital Assets.¹⁷⁹ The request for information asked for input on the current and potential cryptoasset use cases involving banks and their affiliates. The FDIC received 48 comments from a wide range of commenters, spanning globally systemically important banks, crypto-focused banks, cryptoasset market participants, individuals and trade groups.¹⁸⁰ Then in July 2021, the NCUA also gathered information and comments regarding the current and potential impact of activities connected to cryptoassets and related technologies on federally insured credit unions.¹⁸¹

State Regulation

For a discussion of blockchain-specific state-level financial regulation, see question ‎1.

In addition to dedicated financial regulation for the cryptoasset and blockchain industry, a number of state financial regulators have also explained that cryptoassets can be “currency” or “money” for purposes of their state’s money transmitter statutes,¹⁸² though this analysis differs on a state by state basis.¹⁸³ For example, the adoption of Bitcoin as legal tender in El Salvador creates uncertainty regarding its status under money transmitter statutes in a handful of states where the definition of “money” includes a reference to “currency” or the acceptance of a certain medium of exchange in the US or in another country.¹⁸⁴

Blockchain-related anti-money laundering and sanctions compliance issues have long been relevant in the US. As noted in question ‎1, FinCEN issued one of the earliest pieces of blockchain-related guidance in 2013.¹⁸⁵ The 2013 guidance was FinCEN’s first attempt to clarify the applicability of the Bank Secrecy Act (“BSA”) to cryptoasset activities and created the term “convertible virtual currency” (“CVC”) for these purposes. FinCEN’s 2019 guidance then stated that transfers of CVC effectuated by a nonbank financial institution may constitute transmittal orders and therefore fall within the scope of the BSA and the rules thereunder.¹⁸⁶ Pursuant to this guidance, FinCEN has alleged a number of violations of the BSA against a wide range of industry participants, namely for failure to register as a money services business, implement and maintain an effective anti-money laundering program and report suspicious activity reports as required.¹⁸⁷ Also, in October 2023, FinCEN issued a notice of proposed rulemaking that identified CVC mixing as a class of transactions of primary money laundering concern.¹⁸⁸ The proposed rule also would require covered financial institutions to implement certain recordkeeping and reporting requirements on transactions that covered financial institutions know, suspect, or have reason to suspect involve CVC mixing within or involving jurisdictions outside the United States.¹⁸⁹

Similarly, the Treasury Department’s Office of Foreign Assets Control (“OFAC”) issued sanctions compliance guidance for the cryptoasset industry in 2021¹⁹⁰ and provides FAQs regarding its treatment of cryptoassets on its website.¹⁹¹ OFAC has also taken a number of sanctions-related actions. For example, OFAC has added a number of individuals to its Specially Designated Nationals and Blocked Persons List (“SDN List”), including as early as 2018 when it added two bitcoin addresses directly to the list.¹⁹² More controversially, OFAC sanctioned Blender.io and Tornado Cash, cryptoasset “mixers” for allegedly facilitating money laundering by North Korean hackers.¹⁹³ After obtaining a favorable summary judgement order from a US District Court affirming the sanctions, OFAC later added one of Tornado Cash’s co-founders to the SDN List as well and DOJ charged the co-founders with conspiracy to commit money laundering, operate an unlicensed money transmitting business and sanctions violations.¹⁹⁴ Although many in the crypto industry have expressed disapproval of some of these actions,¹⁹⁵ reports suggest that users of and nodes on the Ethereum Network largely complied with the sanctions,¹⁹⁶ and centralized market participants in the US reportedly blacklisted sanctioned addresses.¹⁹⁷ The DOJ has also targeted the deployers of other mixing technologies—in April 2024, the DOJ arrested and charged the developers of the Samourai Wallet mixing service with conspiracy to commit money laundering and conspiracy to operate an unlicensed money transmitting business.¹⁹⁸

Finally, the Federal Reserve has entered into cease-and-desist orders over banking organizations’ AML deficiencies relating to their cryptoasset and blockchain activities.¹⁹⁹

Cryptoassets are generally treated as property, rather than currency, by the IRS for US federal tax purposes. As a result, general tax principles applicable to property transactions generally apply to transactions involving cryptoassets, whether through DeFi or otherwise.²⁰⁰ For example, sales of cryptoassets are generally subject to capital gains tax rules. This includes buying a good or service with cryptoassets because such a transaction results in selling a portion of one’s cryptoasset holdings to cover the cost of the purchase. It also includes converting one cryptoasset to another. Mining and staking rewards are generally taxable as income, based on the fair market value of the mined or staking rewards at the time they are received. Receiving cryptoassets in an airdrop is also taxable as income.²⁰¹

The IRS has intensified efforts to ensure compliance with taxation requirements applicable to cryptoassets and DeFi activities. For example, the IRS continues to leverage John Doe summons²⁰² and has partnered with private-sector entities to track taxpayer activities related to cryptoassets.²⁰³ In April 2023 the IRS announced the creation of the Advanced Collaboration and Data Center to enhance investigative practices against cryptoasset-related crimes.²⁰⁴

The IRS’s enforcement efforts have been bolstered by new funding under the Inflation Reduction Act (“IRA”), which allocated $45.6 billion to IRS enforcement activities over the next decade. The bill included specific provisions indicating that the allocation was intended to support “digital asset monitoring and compliance activities.”²⁰⁵

In July of 2024 the IRS released final regulations as part of the stricter tax-reporting requirements applicable to cryptoasset brokers established under the Infrastructure Investment and Jobs Act (“IIJA”).²⁰⁶ The final rules will require custodial brokers to report sales and exchanges of cryptoassets. In a significant change from the proposed regulations, the IRS revised the definition of “broker” to exclude non-custodial market participants (e.g., DeFi exchanges and self-hosted digital asset wallet software providers). The rules will generally be effective for transactions undertaken in 2025 and thereafter, meaning actual reporting must be made beginning in 2026. The IRS stated it intends to “expeditiously issue separate final regulations describing information reporting rules for non-custodial industry participants.”²⁰⁷

Further, 2024 saw growing pressure on cryptoasset users to properly report income related to staking, lending, and decentralized finance protocols—an area flagged for additional IRS focus moving forward.

The US has not instituted any outright ban on the use or trading of cryptoassets.

As described in the preamble and question ‎1, cryptoasset trading is very common in the US.²⁰⁸ The US has long been the home to several of the world’s largest centralized cryptoasset trading platforms, such as Coinbase, Kraken, Gemini, itBit, and Binance US, as well as the development teams for several of the world’s largest DeFi protocols, such as those helping develop Uniswap, on which cryptoassets are exchanged and traded. The US “leads the world in DeFi usage by raw transaction volume” even in periods of recent decline.²⁰⁹

Mainstream financial institutions are also increasingly involved in cryptoasset trading. However, banking organizations are generally precluded from trading cryptoassets directly, and so they are increasingly involved in producing the architecture upon and through which they hope cryptoasset traders will trade cryptoassets (see the preamble for examples). Moreover, the recent introduction of a number of spot cryptoasset ETFs provides opportunities for banking organizations to provide exposure to cryptoasset prices to their customers. Although it is not clear exactly how much large banking organizations hold, it appears that they hold hundreds of millions of dollars’ worth of cryptoasset spot ETFs for wealth management clients, and other financial institutions such as hedge funds reportedly own billions of dollars of these funds.²¹⁰

Nevertheless, as described in the preamble, and questions ‎1 and ‎2, the status of a particular cryptoasset under relevant laws and regulations may implicate certain regulatory regimes and associated prohibitions and restrictions that impact the ability to trade or use cryptoassets. Although awareness is growing that different cryptoassets may have different properties, and that these different properties should result in different legal consequences, the main regulatory classification that affects the oversight of cryptoassets is whether a given cryptoasset (or transaction involving a cryptoasset) is a security. As described in question ‎1, the most common test for determining if a cryptoasset or a transaction involving a cryptoasset is a security is the Howey test, which is used for determining whether a contract, scheme or transaction is an investment contract and thus a security.²¹¹ If a particular cryptoasset is a security, transactions in that cryptoasset would be subject to SEC regulations. The business models behind most cryptoassets are incompatible with regulations applying to transactions in securities and so if a cryptoasset is determined to be a security, it is likely to, for example, become difficult or impossible for the cryptoasset to be traded, cleared or custodied in the US through the same channels used by non-security cryptoassets.²¹²

In addition, general prohibitions on the activities of certain types of regulated entities may similarly prohibit or restrict a particular entity’s ability to use or trade cryptoassets. For example, as described in question ‎4, banks are heavily regulated and statutes, regulations and guidance outline which activities a bank may engage in, including with respect to cryptoassets. Indeed, banking organizations in the US are effectively prohibited from trading cryptoassets as principal because the federal banking regulators believe that “holding as principal [cryptoassets] that are issued, stored, or transferred on an open, public, and/or decentralized network, or similar system is highly likely to be inconsistent with safe and sound banking practices.”²¹³ Similarly, and also as described in question ‎5, general prohibitions as to whom someone may trade with still apply even if the subject of the transaction is a cryptoasset and the forum for such transaction is a blockchain (i.e., US persons cannot transact with individuals or addresses on the SDN List).

Other laws, regulations and guidance similar largely do not distinguish between different types of cryptoassets and will likewise play a role in determining what and how cryptoassets can be used or traded. For example, the NYDFS’ BitLicense regulation defines the relevant cryptoassets (“virtual currency”) as “any type of digital unit that is used as a medium of exchange or a form of digitally stored value. Virtual currency shall be broadly construed to include digital units of exchange that: have a centralized repository or administrator; are decentralized and have no centralized repository or administrator; or may be created or obtained by computing or manufacturing effort.”²¹⁴ While there are narrow exclusions from this definition for closed-universe gaming assets, closed-universe rewards points, and prepaid cards, the definition is very broad and certain entities using cryptoassets in New York or offering services for New York persons in cryptoassets are subject to licensing requirements.²¹⁵ Similarly, the federal banking agencies’ Joint Statement on Crypto-Asset Risks to Banking Organizations defined “cryptoasset” broadly as “any digital asset implemented using cryptographic techniques,”²¹⁶ and therefore the various federal banking regulator letters and guidance similarly generally cover banking activity with respect to all cryptoassets.  

There have been effectively no ICOs of note in the US since 2019 because the SEC believes that ICOs constitute an unregistered offering of securities under the Howey test. Indeed, the former Chairman of the SEC Jay Clayton said “every ICO I’ve seen is a security.”²¹⁷ Current Chair of the SEC Gary Gensler has agreed, saying in prepared remarks that:²¹⁸

I think former SEC Chairman Jay Clayton said it well when he testified in 2018: “To the extent that digital assets like [initial coin offerings, or ICOs] are securities — and I believe every ICO I have seen is a security — we have jurisdiction, and our federal securities laws apply.” I find myself agreeing with Chairman Clayton. You see, generally, folks buying these tokens are anticipating profits, and there’s a small group of entrepreneurs and technologists standing up and nurturing the projects. I believe we have a crypto market now where many tokens may be unregistered securities, without required disclosures or market oversight.

The SEC has sued many ICO issuers and has generally won in court. In fact, the SEC has won judgments against ICO issuers as recently as September 2024 for ICOs that took place as long ago as 2017.²¹⁹

Based on the SEC’s stance that most if not all ICOs are unregistered securities offerings, some issuers have sought various paths to issue cryptoassets, which, even if securities, are issued in compliance with federal securities laws. One perceived path to compliance with the federal laws is to offer tokens pursuant to one of the exemptions to the registration requirements of the federal securities laws.

Generally, the most useful exceptions to the federal securities laws for ICO launches are Regulation D and Regulation S. Although other exemptions are available, they each have a monetary cap of less than $100 million raised, which is below the amount targeted by many ICO promoters. Regulation S may enable issuers to sell tokens in an ICO, but sales must be entirely outside of the US and are subject to onerous resale restrictions (including on sales into the US). There are thus significant challenges to offering an ICO in compliance with Regulation S if the cryptoassets distributed pursuant to the ICO are available on public, permissioned blockchains, because the ICO issuer may have little to no control over who may purchase the cryptoassets either directly or in subsequent transactions. Similarly, Regulation  D may enable an issuer to legally sell tokens, but the requirement that sales are only made to accredited and institutional investors preclude an ICO in the generally understood form whereby public retail purchasers may participate.

Moreover, even if an ICO were theoretically possible under one or more exemptions from registration, other rules promulgated under the federal securities laws become relevant and are similarly ill-suited to blockchain-based projects. For example, some blockchain-related projects have no centralized issuer at all and therefore nobody who is theoretically “the issuer” capable of filing ongoing disclosure reporting. And, even where personnel are in place who are capable of filing out requisite forms appropriate, the SEC may not permit such registrations or reporting to take place. A number of blockchain-based projects have attempted to register their ICOs under a variety of offering rules, but in each case registration, reporting, or other onerous regulatory requirements have caused or contributed to the project’s demise.²²⁰ For others, the required forms may require information that is either not applicable to the project at issue, because it is geared towards traditional securities offerings and issuers, or at least not material to the potential purchasers of the offered cryptoasset.

Efforts have been made to provide clarity on the classification of cryptoassets and treatment of cryptoasset transactions under the Uniform Commercial Code (“UCC”). The UCC is a set of state-adopted laws governing commercial transactions, including the creation and perfection of security interests. In July 2022, the Uniform Law Commission—responsible for developing and updating model statutes like the UCC, which many states use as a basis for their laws—proposed several amendments to the UCC to provide clearer rules governing transactions in cryptoassets. The amendments do this by (1) making clear how the existing principles of the UCC apply to transactions in cryptoassets and traditional transactions utilizing electronic records and (2) applying the fundamental concepts of negotiability to transfers of certain cryptoassets. These proposed UCC changes include the addition of Article 12.

Proposed UCC Article 12 seeks to clarify existing commercial law governing the transfers of cryptoassets, including by introducing the term “controllable electronic record” (“CER”) to describe cryptoassets and other forms intangible assets.²²¹ By creating the concept of control over CERs, Article 12 allows for negotiability of CERs, similar in concept to the negotiability of negotiable instruments, and for higher priority for a secured party that perfects its security interest in CERs by control rather than by relying on the filing of a UCC financing statement.

As of October 15, 2024, 24 states and the District of Columbia had adopted these UCC amendments.²²²

Almost all of the blockchain examples discussed throughout, other than with respect to Bitcoin, rely on smart contracts. Specifically, each of the various use cases  described in the preamble and throughout (e.g., DeFi, NFTs, stablecoins and DAOs) rely on and are products of smart contracts. As described below, smart contracts are still in their infancy and the industry is still evaluating and developing their uses,²²³ which will likely also impact the legal frameworks that evolve around them. Major cryptoasset institutions also sponsor research into accelerating blockchain innovation, including with respect to smart contracts.

There have been no laws to date in the US that formally characterize smart contracts. They do not necessarily represent legally binding contracts, although they may be used in or as part of a legally binding contract.

US federal agencies have brought a number of enforcement actions against developers for deploying smart contracts that allegedly violate US laws.²²⁴ In addition, juries have concluded that those who use already deployed smart contracts with requisite fraudulent intent may be guilty of criminal acts, even if the defendant did not “hack” (as that term is understood in the industry) the relevant smart contracts and instead used them as deployed, but in manipulative ways.²²⁵ That is, arguments that simply using the smart contract’s code as written and as permitted or enabled by it does not constitute a defense to otherwise criminal behavior. This is contrary to the view among some in the crypto industry that is often expressed by the phrase “code is law.”²²⁶

Many blockchain-based projects, especially decentralized autonomous organizations (“DAOs”), have experimented with new governance models. Generally, DAOs use smart contracts to implement governance rules, enabling token holders to participate in decision-making with the aim of fostering accountability and stakeholder engagement, aligning with governance principles of transparency and inclusiveness.

Despite general agreement on what a DAO should or could be in its purest form, “[t]he term “DAO” is applied to so many different organizations that it has become close to meaningless.”²²⁷ Others have summarized that “[t]he boundaries of what qualifies as a DAO are still evolving, but in their current form, DAOs rely on blockchains, autonomous smart contracts, and digital assets to support organizations that operate natively on the Internet and have the capability of scaling globally from their birth.”²²⁸ The inherent issue in defining what a DAO is, or rather, which organizations currently qualify as DAOs, goes to the heart of the issue legislators and regulators face when determining how the law should best treat DAOs.

To date, a handful of US states have enacted laws that recognize DAOs as protected by traditional corporate law principles of limited liability, including New Hampshire,²²⁹ Tennessee,²³⁰ Utah,²³¹ Vermont²³² and Wyoming.²³³ While the exact mechanics differ slightly, whereby in some states (Utah), the limited liability DAO is the entity created pursuant to the statute, and in others (e.g., Tennessee) the DAO becomes “wrapped” by a protective LLC. In either case, these statutes have successfully attracted DAOs and related parties to protect themselves through a legal mechanism. For example, in Wyoming, there are over 1,000 DAOs registered in the Wyoming Secretary of State’s business registry.²³⁴ In other states, legislators have proposed bills to similarly recognize DAOs as a form of corporate entity, but to date they have either failed or otherwise not yet been enacted.²³⁵

Without statutory legal protections, DAOs are generally perceived to be an “unincorporated association” or a “general partnership.” Being deemed either an unincorporated association or a general partnership exposes the DAO and its members to a number of traditional legal concepts. For example, and often most importantly for members of a DAO, under traditional corporate and business organization principles, members of both entities may be held personally liable for all of a DAO’s obligations.

In addition, regardless of the legal entity classification under business organizations laws, a DAO may still be deemed to be a “person” or another applicable classification for a number of laws, including criminal laws and various trading and markets laws. For example, when the CFTC sued Ooki DAO for alleged violations of the Commodities Exchange Act, a judge entered a default judgment against Ooki DAO.²³⁶ The SEC has also sued and settled charges against Mango DAO for the DAO’s alleged role in selling its governance token as an unregistered security.²³⁷

As described throughout, a significant range of federal agencies have taken enforcement actions or sought criminal sanctions concerning blockchains.

Most notably, the SEC has been the most aggressive enforcer of rules regarding blockchain activities.²³⁸ But the SEC has not been alone, and as described throughout, other federal agencies including the CFTC, federal banking regulators, and DOJ²³⁹ have similarly instituted a number of actions within their purview for alleged violations of federal law.

Alongside the federal agencies and regulators, state regulators and prosecutors have also instituted dozens of enforcement actions for alleged malfeasance in the cryptoasset and blockchain industry. The New York Attorney General has been one of the most active, having successfully sued a number of large cryptoasset trading platforms.²⁴⁰ Just like at the federal level, many state enforcement actions are related to fraudulent conduct and/or violations of the securities and banking laws. For example, the Texas State Securities Board was the first state securities regulator to enter an enforcement order against a cryptoasset firm in 2017 and has to date entered more than 50 administrative orders relating to cryptoassets and blockchains.²⁴¹ The Florida Attorney General recently filed criminal charges against individuals for allegedly operating a cryptoasset money laundering scheme.²⁴² The California Department of Financial Protection and Innovation entered into a consent order with Silvergate relating to deficiencies in its monitoring of internal transactions by its blockchain customers on its Silvergate Exchange Network.²⁴³

There have been a number of cases with judicial decisions, whether on the merits or otherwise, that consider blockchain concepts or smart contracts.

As described in question ‎10, juries have found defendants guilty in criminal trials of actions taken on or with respect to blockchains and smart contracts.²⁴⁴ As described in question ‎8, a number of courts have ruled in favor of the SEC’s allegations in cases against the issuers from a number of ICO cases.²⁴⁵

In addition, one of the most controversial judicial debates currently ongoing regarding blockchain concepts is whether a cryptoasset itself can be a security, or what it means for a cryptoasset to be sold as part of a securities transaction. This uncertainty is playing out in a series of cases across the country, many of which have reached differing conclusions.²⁴⁶ It is unlikely that the industry obtains any clarity unless and until this issue is decided at the federal Circuit level and, because the cases are taking place across various circuits, it is possible that the issue results in a circuit split that ultimately would need to be determined by the Supreme Court.

The use of blockchain technology can implicate a vast range of laws in the US, often in ways that present challenges or legal uncertainties. For example, recent data privacy laws and frameworks show little evidence of having considered the unique characteristics of blockchain technology. While certain blockchain features—such as encryption and data integrity verification—can address privacy concerns, the technology’s decentralized, peer-to-peer architecture challenges traditional models of controller-based data processing. This fundamental difference complicates the alignment of existing data protection laws with blockchain’s key attributes, including the absence of centralized control, immutability, and permanent data storage. Regulatory guidance on how to navigate these conflicts remains limited, leaving businesses uncertain about how to ensure compliance.

Some important tensions between blockchain technology and data privacy requirements include:

• Different perspectives on anonymity and pseudonymity and how they affect the applicability of various data protection and privacy laws.
• How to identify controllers and processors in various blockchain technology implementations.
• Territorial implications for distributed blockchain networks.
• When cross-border personal data transfers occur and potential restrictions on them.
• Applying criteria for legitimate reasons for processing personal data to blockchain use cases.
• Reconciling transaction immutability and data preservation in blockchain applications with individuals’ rights.²⁴⁷

The year 2024 saw further crypto-related bankruptcy developments, building on the fallout from the FTX collapse. Key issues related to the application of insolvency law to blockchain technology and cryptoasset activities include whether cryptoassets of a debtor constitutes part of the debtor’s estate and the valuation of cryptoassets in bankruptcy proceedings—including whether claims should be “dollarized” based on their market value as of the bankruptcy petition date.

An overarching theme of the regulation of blockchain technology in the US, and as discussed throughout this guide, is that it is subject to significant uncertainties and continues to develop over time as a result of regulatory and court actions. There could also be significant changes if or when crypto-specific legislation is enacted at the federal level. Adding to the uncertainties over the regulation of blockchain technology is the uncertain scope of US law—blockchain technology is borderless in nature, and issues related to extraterritoriality remain largely unsettled.

[1] The US ranked first in the world for public adoption and second in the world for infrastructure adoption. Henley & Partners, The Henley Crypto Adoption Index 2024 (Aug. 27, 2024), https://www.henleyglobal.com/publications/henley-crypto-adoption-index.

[2] The US ranked fourth in its 2024 top 10 adoption index, which considers GDP per capita on a purchasing power parity basis. Chainalysis, The 2024 Global Adoption Index: Central & Southern Asia and Oceania (CSAO) Region Leads the World in Terms of Global Cryptocurrency Adoption (Sep. 11, 2024), https://www.chainalysis.com/blog/2024-global-crypto-adoption-index/#top-countries.

[3] Tom Blackstone, 2024 Cryptocurrency Adoption and Sentiment Report, Security.Org (Sep. 26, 2024), https://www.security.org/digital-security/cryptocurrency-annual-consumer-report/#:~:text=Cryptocurrency%20Ownership%20Rates%20Have%20Surged%20Since%202023,-Since%20conducting%20our&text=But%20today%2C%20more%20than%2080,ago%20to%2040%20percent%20today.

[4] Stand With Crypto claims, “52 million Americans own crypto.” See Stand With Crypto, https://www.standwithcrypto.org/. Note that this number is “certainly contested.” Jemima Kelly, The farce that is America’s ‘crypto election’, Financial Times (Sep. 29, 2024), https://www.ft.com/content/b2c50db6-2884-4c52-973d-d30671602fb0. Some federal government agencies suggest the number may be as low as half this figure, however. See FRB, Economic Well-Being of U.S. Households in 2023 at 37 (May 21, 2024), https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf.

[5] Ethereum Mainnet Statistics, Ethernodes, https://ethernodes.org/countries.

[6] Global Bitcoin nodes by country, Bitnodes, https://bitnodes.io/nodes/all/countries/1d/.

[7] See id.

[8] See DefiLlama, Overview, https://defillama.com/ (showing the total value locked as being above $1 billion every day since mid-2020, being as high as $175 billion in November 2021, and between $50 billion and $100 billion so far in 2024. Approximately half of all total value locked is on the DeFi protocol deployments on the Ethereum Network, though prior to 2021 this share was significantly higher.

[9] See, e.g., U.S. Department of the Treasury, Illicit Finance Risk Assessment of Decentralized Finance (Apr. 2023), https://home.treasury.gov/system/files/136/DeFi-Risk-Full-Review.pdf.

[10] See, e.g., Statement, Caroline A. Crenshaw, Statement on DeFi Risks, Regulations, and Opportunities (Nov. 9, 2021), https://www.sec.gov/newsroom/speeches-statements/crenshaw-defi-20211109.

[11] Ian Allison, JPMorgan Debuts Tokenized BlackRock Shares as Collateral with Barclays, CoinDesk (Oct. 11, 2023), https://www.coindesk.com/business/2023/10/11/jpmorgan-debuts-tokenized-blackrock-shares-as-collateral-with-barclays/.

[12] Documentation, Goldman Sachs, https://developer.gs.com/docs/.

[13] Puneet Singhvi, Introducing Citi Integrated Digital Assets Platform (CIDAP): Driving Innovation and Building Solutions with Blockchain, Citi (July 17, 2024), https://www.citigroup.com/global/news/perspective/2024/introducing-citi-integrated-digital-assets-platform.

[14] See, e.g., Franklin Onchain U.S. Government Money Fund, Franklin Templeton (Apr. 6, 2021), https://www.sec.gov/Archives/edgar/data/1786958/000137949121001250/filing222856581.htm (“Although the Fund’s transfer agent will maintain the official record of share ownership in book-entry form, the ownership of the Fund’s shares will also be recorded on the Stellar network’s blockchain. The use of blockchain technology is untested for mutual funds. In the event of a conflict between the blockchain record and the record held by the transfer agent, the transfer agent’s record will be determinative.”)..

[15] See Michael del Castillo, Broadridge Now Conducts $70 Billion Of Blockchain Repo Trades Per Day, Forbes (May 8, 2023), https://www.forbes.com/sites/digital-assets/2023/05/08/broadridge-now-conducts-70-billion-of-blockchain-repo-trades-per-day/?sh=11bc8f402bcc.

[16] Citi, Bringing Traditional Assets to Digital Networks: Exploring the Tokenization of Private Markets, https://www.citigroup.com/rcs/citigpa/storage/public/Fund-Tokenization-Summary-Report.pdf.

[17] See Franklin Templeton, Franklin OnChain U.S. Government Money Fund, https://www.franklintempleton.com/investments/options/money-market-funds/products/29386/SINGLCLASS/franklin-on-chain-u-s-government-money-fund/FOBXX

[18] BusinessWire, BlackRock Launches Its First Tokenized Fund, BUIDL, on the Ethereum Network, (Mar. 20, 2024), https://www.businesswire.com/news/home/20240320771318/en/BlackRock-Launches-Its-First-Tokenized-Fund-BUIDL-on-the-Ethereum-Network.

[19] Coinbase, The State of Crypto. The Fortune 500 Moving Onchain at 3 (June 12, 2024), https://assets.ctfassets.net/o10es7wu5gm1/2n9KtrCyq59uQ4uOCF18hi/21fd908639c6c87e9d36a994ccacda51/Q2_2024_State_of_Crypto_final.pdf.

[20] Id. at 2 (June 12, 2024), https://assets.ctfassets.net/o10es7wu5gm1/2n9KtrCyq59uQ4uOCF18hi/21fd908639c6c87e9d36a994ccacda51/Q2_2024_State_of_Crypto_final.pdf.

[21] See Order Granting Accelerated Approval of Proposed Rule Changes, as Modified by Amendments Thereto, to List and Trade Bitcoin‑Based Commodity‑Based Trust Shares and Trust Units, Release Nos. 34‑99306, SR‑NYSEARCA‑2021‑90; SR‑NYSEARCA‑2023‑44; SR‑NYSEARCA‑2023‑58; SR‑NASDAQ‑2023‑016; SR‑NASDAQ‑2023‑019; SR‑CboeBZX‑2023‑028; SR‑CboeBZX‑2023‑038; SR‑CboeBZX‑2023‑040; SR‑CboeBZX‑2023‑042; SR‑CboeBZX‑2023‑044; SR‑CboeBZX‑2023‑072 (Jan. 10, 2024), https://www.sec.gov/files/rules/sro/nysearca/2024/34-99306.pdf.

[22] Spot Bitcoin ETFs, ETF.com, https://www.etf.com/topics/spot-bitcoin.

[23] Circle issues USDC; Paxos issues USDP, PYUSD (in collaboration with PayPal), and formerly issued BUSD (in collaboration with Binance); and Gemini issues GUSD, among others. The largest dollar-pegged stablecoin in circulation, USDT, is issued by a non-US company, Tether.

[24] See Circle, Visa Expands Stablecoin Settlement Capabilities to Merchant Acquirers (Sep. 5, 2023), https://www.circle.com/en/pressroom/visa-expands-stablecoin-settlement-capabilities-to-merchant-acquirers.

[25] See Chainalysis Team, North America Leads World in Crypto Usage Despite Ongoing Regulatory Questions, While Stablecoin Activity Shifts Away from U.S. Services, Chainalysis (Oct. 23, 2023), https://www.chainalysis.com/blog/north-america-cryptocurrency-adoption/.

[26] Paige Smith, PayPal Completes Its First Business Transaction Using Stablecoin, Bloomberg (Oct. 3, 2024), https://www.bloomberg.com/news/articles/2024-10-03/paypal-completes-its-first-business-transaction-using-stablecoin?embedded-checkout=true.

[27] See Oliver Dale, Stripe Reintroduces Crypto Payments: USDC Support on Multiple Networks, Blockonomi (Oct. 10, 2024), https://blockonomi.com/stripe-reintroduces-crypto-payments-usdc-support-on-multiple-networks/?utm_source=substack&utm_medium=email.

[28] See Ohio Department of Taxation, https://bitnodes.io/nodes/all/countries/1d/.

[29] See Dogecoin, Tesla, https://www.tesla.com/support/dogecoin.

[30] Board of Governors of the Federal Reserve System (“FRB”), Economic Well-Being of U.S. Households in 2023 at 37 (May 21, 2024), https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf.

[31] See Congressional Research Service, Tokenized Assets (May 20, 2024), https://crsreports.congress.gov/product/pdf/IF/IF12670.

[32] See Chainalysis Team, North America Leads World in Crypto Usage Despite Ongoing Regulatory Questions, While Stablecoin Activity Shifts Away from U.S. Services, supra note 25.

[33] Global Market Insights, Gaming NFT Market Size – By NFT Type (In-game Assets, Collectibles, Trading Cards, Virtual Real Estate, Cryptocurrency Tokens), By Gaming Platform, By Functionality, By Blockchain Network & Forecast, 2024 – 2032 (July 2024).

[34] Luke Fortney, He Started Resy: Now He Wants You to Take Restaurant NFTs Seriously, Eater (Apr. 20, 2023), https://ny.eater.com/2023/4/20/23674545/ben-leventhal-blackbird-loyalty-platform-restaurant-nfts.

[35] LifeGraph, BurstIQ, https://burstiq.com/lifegraph-solutions/.

[36] Homepage, 3Blocks, https://www.3blocks.io/.

[37] See Jason Nelson, Free Slurpee NFTs Served Up by 7-Eleven, Decrypt (July 11, 2023), https://decrypt.co/148232/7-eleven-slurpee-vibe-nft-solana.

[38] Evan Fenster, A Celo NFT-backed Rewards Pilot a Success in San Francisco, Celo Foundation (Sep. 19, 2022), https://blog.celo.org/a-celo-nft-backed-rewards-pilot-a-success-in-san-francisco-5d02815d180a.

[39] See, e.g., Matt Binder, Starbucks is shutting down its NFT rewards program, Mashable (Mar. 16, 2024), https://mashable.com/article/starbucks-sunsets-nft-reward-program-odyssey.

[40] DraftKings, Community Update on the Future of Reignmakers and DraftKings Marketplace (July 30, 2024), https://reignmakers.draftkings.com/home.

[41] See @dfinzer, X (Aug. 28, 2024), https://x.com/dfinzer/status/1828791832009953706.

[42] The Joint Financial Management Improvement Program, Harnessing Blockchain in the Federal Government (Dec. 2023), https://www.cfo.gov/assets/files/JFMIP-24-01.pdf.

[43] Id.

[44] Press Release, SIMBA Chain, SIMBA Chain Awarded $30M U.S. Air Force STRATFI, https://simbachain.com/news/simba-chain-awarded-30m-u-s-air-force-stratfi/.

[45] Blockchain Portfolio, U.S. Department of Homeland Security, https://www.dhs.gov/science-and-technology/blockchain-portfolio.

[46] Akash Sriram, California DMV puts 42 million car titles on blockchain to fight fraud, Reuters (July 30, 2024), https://www.reuters.com/technology/california-dmv-puts-42-million-car-titles-blockchain-fight-fraud-2024-07-30/.

[47] Ben Schreckinger, The smallest state has the biggest blockchain ambitions, Politico (Feb. 9, 2023), https://www.politico.com/newsletters/digital-future-daily/2023/02/09/the-smallest-state-has-the-biggest-blockchain-ambitions-00082118.

[48] This regulatory predicament predates the high-profile industry failures in 2022 of FTX and others, but these failures hardened several lawmakers against the cryptoasset and blockchain industry in ways that may make it less likely that accommodating legislation is passed.

[49] For a discussion of several of the bills discussed herein, see https://www.davispolk.com/insights/resource-centers/crypto-regulation-hub.  For an up-to-date list of cryptoasset and blockchain-related bills, see https://www.caphillcrypto.com/legtracker.

[50] Sen. Stabenow, Debbie, S. 4760 – Digital Commodities Consumer Protection Act of 2022, US Congress (Aug. 3, 2022), https://www.congress.gov/bill/117th-congress/senate-bill/4760/text.

[51] Sen. Lummis, Cynthia M, S. 2281 – Lummis-Gillibrand Responsible Financial Innovation Act, US Congress (July 12, 2023),  https://www.congress.gov/bill/118th-congress/senate-bill/2281.

[52] Rep. Thompson, Glenn, H.R. 4763 – Financial Innovation and Technology for the 21st Century Act, US Congress (July 20, 2023), https://www.congress.gov/bill/118th-congress/house-bill/4763.

[53] See Press Release, House Financial Services Committee, House Passes Financial Innovation and Technology for the 21st Century Act with Overwhelming Bipartisan Support (May 22, 2024), https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409277.

[54] See Representative Gottheimer, Release: Gottheimer Announces “Stablecoin Innovation and Protection Act,” Critical New Cryptocurrency Legislation (Feb. 15, 2022), https://gottheimer.house.gov/posts/release-gottheimer-announces-stablecoin-innovation-and-protection-act-critical-new-cryptocurrency-legislation.

[55] Rep. Hollingsworth, Trey, H.R. 7328 – Stablecoin Transparency Act, US Congress (Mar. 31, 2022), https://www.congress.gov/bill/117th-congress/house-bill/7328.

[56] Sen. Toomey, Patrick, S. 5340 – Stablecoin TRUST Act of 2022, US Congress (Dec. 21, 2022), https://www.congress.gov/bill/117th-congress/senate-bill/5340.

[57] Sen. Lummis, Cynthia, S. 4155 – Lummis-Gillibrand Payment Stablecoin Act, US Congress (Apr. 17, 2024), https://www.congress.gov/bill/118th-congress/senate-bill/4155.

[58] Rep. McHenry, Patrick T., H.R. 4766 – Clarity for Payment Stablecoins Act of 2023, US Congress (July 20, 2023), https://www.congress.gov/bill/118th-congress/house-bill/4766/text.

[59] For more discussion of Representatives McHenry and Waters’ competing proposals, see Joseph Hall, David Portilla and Justin Levine, A Closer Look At Competing Stablecoin Legislative Proposals, Davis Polk & Wardwell (Aug. 3, 2023),  https://www.davispolk.com/sites/default/files/2023-08/A%20Closer%20Look%20At%20Competing%20Stablecoin%20Legislative%20Proposals.pdf.

[60] Sen. Hagerty, Clarity for Payment Stablecoins Act of 2024 (Oct. 10, 2024), https://www.hagerty.senate.gov/wp-content/uploads/2024/10/Stablecoin-Draft-Text.pdf.

[61] SEC v. W. J. Howey Co., 328 U.S. 293 (1946).

[62] Strategic Hub for Innovation and Financial Technology, Framework for “Investment Contract” Analysis of Digital Assets, SEC, https://www.sec.gov/about/divisions-offices/division-corporation-finance/framework-investment-contract-analysis-digital-assets.

[63] Howey at 299.

[64] See SEC, Staff Accounting Bulletin No. 121 (Mar. 31, 2022), https://www.sec.gov/regulation/staff-interpretations/accounting-bulletins/old/staff-accounting-bulletin-121.

[65] 88 Fed. Reg. 5440 (Jan. 27, 2023), https://www.federalregister.gov/documents/2023/01/27/2022-27644/regulation-best-execution.

[66] Id. at 5448.

[67] 88 Fed. Reg. 14672 (Mar. 9, 2023), https://www.federalregister.gov/documents/2023/03/09/2023-03681/safeguarding-advisory-client-assets.

[68] Id. at 14679.

[69] 88 Fed. Reg. 29448 (May 5, 2023), https://www.federalregister.gov/documents/2023/05/05/2023-08544/supplemental-information-and-reopening-of-comment-period-for-amendments-regarding-the-definition-of.

[70] Id. at 29449 – 29459.

[71] 89 Fed. Reg. 14938 (Feb. 22, 2024), https://www.federalregister.gov/documents/2024/02/29/2024-02837/further-definition-of-as-a-part-of-a-regular-business-in-the-definition-of-dealer-and-government#:~:text=Under%20the%20final%20rules%2C%20a,selling%20securities%20that%20has%20the.

[72] Id. at 14959 – 14961.

[73] 2022 Amendments to the Uniform Commercial Code, Uniform Law Commission, https://www.uniformlaws.org/committees/community-home?CommunityKey=1457c422-ddb7-40b0-8c76-39a1991651ac#LegBillTrackingAnchor. The law is supplemented by the Louisiana Office of Financial Institutions’ regulations promulgated pursuant to the law. See Virtual Currency Business Activity (LAC 10:XV.Chapter 19), Louisiana Office of Financial Institutions, https://ofi.la.gov/ofi-docs/NonDepVirtualCurrencyBusinessEmergencyRule_LAC_10_I_1901_et_seq.pdf.

[74] California Assembly Bill No. 39, 2023-2024 Regular Session, https://legiscan.com/CA/text/AB39/2023, as amended by California Assembly Bill No. 1934, 2023-2024 Regular Session, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:CA2023000A1934&verid=CA2023000A1934_20240929_0_CH&.

[75] DFAL 3102(g)(1).

[76] DFAL 3102(g)(2).

[77] DFAL 3102(i).

[78] Wyoming Decentralized Unincorporated Nonprofit Association Act, 67^th Legislature of the State of Wyoming, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:WY2024000S50&verid=WY2024000S50_20240307_0_E&.

[79] New Hampshire Decentralized Autonomous Organization Act, State of New Hampshire General Court, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:NH2023000H645&verid=NH2023000H645_20240726_0_EF&..

[80] These states include Georgia (House Bill 1053, General Assembly of Georgia, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:GA2023000H1053&verid=GA2023000H1053_20240506_0_EF&), Indiana (Senate Enrolled Act No. 180, 123^rd General Assembly, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:IN2024000S180&verid=IN2024000S180_20240311_0_EF&) and Nebraska (Legislative Bill 94, 108^th Legislature, https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:NE2023000L94&verid=NE2023000L94_20240213_0_ESL&).

[81] 23 NYCRR 200.2(q).

[82] Virtual Currency Businesses – Licensing and Resources, NYDFS, https://www.dfs.ny.gov/virtual_currency_businesses.

[83] NYDFS, Guidance on Prevention of Market Manipulation and Other Wrongful Activity (Feb. 7, 2018), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20180207_guidance_prevention_market_manipulation_and_other_wrongful_activity.

[84] NYDFS, Guidance on the Use of Blockchain Analytics (Apr. 28, 2022), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220428_guidance_use_blockchain_analytics.

[85] NYDFS, Guidance on the Issuance of U.S. Dollar-Backed Stablecoins (Jun. 8, 2022), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20220608_issuance_stablecoins. See The New York DFS issues guidance for issuers of U.S. dollar-backed stablecoins, Davis Polk (June 17, 2022), https://www.davispolk.com/insights/client-update/new-york-dfs-issues-guidance-issuers-us-dollar-backed-stablecoins.

[86] NYDFS, Guidance on Custodial Structures for Consumer Protection in the Event of Insolvency (Jan. 23, 2023), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230123_guidance_custodial_structures.

[87] NYDFS, General Framework for Greenlisted Coins (Sep. 18, 2023), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20230918_gen_framework_greenlisted_coins; NYDFS, Guidance Regarding Listing of Virtual Currencies (Nov. 15, 2023), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20231115_listing_virtual_currencies.

[88] NYDFS, Guidance on Assessment of the Character and Fitness of Directors, Senior Officers, and Managers (Jan. 22, 2024), https://www.dfs.ny.gov/industry_guidance/industry_letters/il20240122_guidance_on_assessment.

[89] NYDFS, Industry Letter: Prior Approval for Covered Institutions’ Virtual CurrencyRelated Activity (Dec. 15, 2022), https://www.dfs.ny.gov/system/files/documents/2022/12/il20221215_prior_approval.pdf. See NY DFS’ virtual currency guidance for banking organizations, Davis Polk (Dec. 20, 2022), https://www.davispolk.com/insights/client-update/ny-dfs-virtual-currency-guidance-banking-organizations.

[90] 85 Fed. Reg. 37734 (June 24, 2020), https://www.cftc.gov/sites/default/files/2020/06/2020-11827a.pdf.

[91] SEC, Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO (July 25, 2017), https://www.sec.gov/files/litigation/investreport/34-81207.pdf.

[92] Strategic Hub for Innovation and Financial Technology, Framework for “Investment Contract” Analysis of Digital Assets, supra note 62.

[93] Id. note 1.

[94] William Hinman, Digital Asset Transactions: When Howey Met Gary (Plastic) (June 14, 2018), https://www.sec.gov/newsroom/speeches-statements/speech-hinman-061418.

[95] FinCEN, Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (Mar. 18, 2013), https://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf.

[96] FinCEN, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies (FIN-2019-G001) (May 9, 2019), https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf.

[97] See FinCEN, “FinCEN Proposes New Regulation to Enhance Transparency in Convertible Virtual Currency Mixing and Combat Terrorist Financing” (Oct. 19, 2023), https://www.fincen.gov/news/news-releases/fincen-proposes-new-regulation-enhance-transparency-convertible-virtual-currency.

[98] Gary Gensler, SEC Chair, Partners of Honest Business and Prosecutors of Dishonesty (Oct. 25, 2023), https://www.sec.gov/newsroom/speeches-statements/gensler-remarks-securities-enforcement-forum-102523.

[99] Press Release, CFTC, CFTC Issues Orders Against Operators of Three DeFi Protocols for Offering Illegal Digital Asset Derivatives Trading (Sep. 7, 2023), https://www.cftc.gov/PressRoom/PressReleases/8774-23.

[100] Complaint, CFTC v. Changpeng Zhao, et al., No. 1:23-cv-01887 (N.D. Ill. Mar. 27, 2023), https://www.cftc.gov/media/8351/%20enfbinancecomplaint032723/download; Complaint, CFTC v. Nishad Singh, No. 1:23-cv-01684 (S.D.N.Y. Feb. 28, 2023), https://www.cftc.gov/PressRoom/PressReleases/8669-23; Complaint, CFTC v. Samuel Bankman-Fried, et al., No. 1:22-cv-10503 (S.D.N.Y. Dec. 13, 2022), https://www.cftc.gov/PressRoom/PressReleases/8638-22.

[101] See, e.g., Press Release, CFTC, CFTC Issues Order Against Uniswap Labs for Offering Illegal Digital Asset Derivatives Trading (Sep. 4, 2024), https://www.cftc.gov/PressRoom/PressReleases/8961-24.

[102] United States v. STORM, 1:23-cr-00430 (S.D.N.Y 2024), available at https://www.justice.gov/usao-sdny/file/1311391/dl?inline.

[103] See IRS, Taxpayers need to report crypto, other digital asset transactions on their tax return (Apr. 2024), https://www.irs.gov/newsroom/taxpayers-need-to-report-crypto-other-digital-asset-transactions-on-their-tax-return.

[104] See 89 Fed. Reg. 56840 (July 9, 2024), https://www.federalregister.gov/documents/2024/07/09/2024-14004/gross-proceeds-and-basis-reporting-by-brokers-and-determination-of-amount-realized-and-basis-for.

[105] Press Release, SEC, SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency (June 6, 2023), https://www.sec.gov/newsroom/press-releases/2023-102; Press Release, SEC, SEC Files 13 Charges Against Binance Entities and Founder Changpeng Zhao (June 5, 2023), https://www.sec.gov/newsroom/press-releases/2023-101; Press Release, SEC, SEC Charges Kraken for Operating as an Unregistered Securities Exchange, Broker, Dealer, and Clearing Agency (Nov. 20, 2023), https://www.sec.gov/newsroom/press-releases/2023-237; Press Release, SEC, SEC Charges Crypto Asset Trading Platform Bittrex and its Former CEO for Operating an Unregistered Exchange, Broker, and Clearing Agency (Apr. 17, 2023), https://www.sec.gov/newsroom/press-releases/2023-78.

[106] Press Release, SEC, SEC Charges Entities Operating Crypto Asset Trading Platform Mango Markets for Unregistered Offers and Sales of the Platform’s “MNGO” Governance Tokens (Sep. 27, 2024), https://www.sec.gov/newsroom/press-releases/2024-154..

[107] Press Release, SEC, SEC Charges Crypto Entrepreneur Justin Sun and His Companies for Fraud and Other Securities Law Violations (Mar. 22, 2023), https://www.sec.gov/newsroom/press-releases/2023-59.

[108] AP Summary, SEC, SEC Charges Flyfish Club, LLC for Unregistered Offering of NFTs (Sep. 16, 2024), https://www.sec.gov/enforcement-litigation/administrative-proceedings/33-11305-s.

[109] SEC, Galois Capital Management LLC, Order Instituting Administrative Proceeding and Cease-and-Desist Proceedings (File No. 3-22043) (Sep. 3, 2024), https://www.sec.gov/files/litigation/admin/2024/ia-6670.pdf.

[110] Complaint, SEC v. Silvergate Capital Corp, et. al., No. 1:24-CV-04987 (S.D.N.Y July 1, 2024), https://www.sec.gov/files/litigation/complaints/2024/comp26044.pdf.

[111] Complaint, SEC v, CoinW6, et. al., No. 2:24-CV-07924 (C.D. Cal. Sep. 17, 2024),  https://www.sec.gov/files/litigation/complaints/2024/comp-pr2024-134-coinw6.pdf.

[112] Gary Gensler, SEC Chair, Remarks Before the Aspen Security Forum (Aug. 3, 2021), https://www.sec.gov/newsroom/speeches-statements/gensler-aspen-security-forum-2021-08-03.

[113] Id.

[114] Id.

[115] Gary Gensler, SEC Chair, Office Hours with Gary Gensler: Crypto Platforms & Securities Laws (May 3, 2023), https://www.sec.gov/newsroom/speeches-statements/office-hours-gary-gensler-crypto-platforms-securities-laws#:~:text=The%20law%20is%20clear.,re%20an%20investor’s%20best%20friend.

[116] Gary Gensler, SEC Chair, Statement on the Financial Innovation and Technology for the 21^st Century Act (May 22, 2024), https://www.sec.gov/newsroom/speeches-statements/gensler-21st-century-act-05222024#:~:text=The%20crypto%20industry’s%20record%20of,t%20play%20by%20the%20rules.

[117] Coinbase, Re: Petition for Rulemaking – Digital Asset Securities Regulation (July 21, 2022), https://www.sec.gov/files/rules/petitions/2022/petn4-789.pdf.

[118] Petition, Coinbase, Inc. v. SEC, No. 23-3202 (3d. Cir. 2023), https://storage.courtlistener.com/recap/gov.uscourts.ca3.121484/gov.uscourts.ca3.121484.1.1.pdf.

[119] Complaint, Consensys Software, Inc. v. Gary Gensler, et. al., No. 4:24-CV-00369-Y (N.D. Tex. Apr. 25, 2024), https://assets.ctfassets.net/gjyjx7gst9lo/2kfQoAKoQyQD1cw0HbVF3I/9c52c1e8754583c8f9b090e4b610de65/Consensys_v._Gensler_et_al.__Complaint_for_Declaratory_and_Injunctive_Relief__as-filed_.pdf.

[120] Consensys Software, Inc. v. SEC, No. 4:24-CV-00369-O (N.D. Tex. Sep. 19, 2024), https://storage.courtlistener.com/recap/gov.uscourts.txnd.389154/gov.uscourts.txnd.389154.57.0.pdf.

[121] Complaint, Foris Dax Inc., et. al. v. SEC, et. al., No. 6:24-CV-00373 (E.D. Tex. Oct. 8, 2024), https://crypto.com/document/complaint.pdf.

[122] Press Release, Blockchain Association, Blockchain Association and Crypto Freedom Alliance of Texas File Lawsuit Challenging SEC’s Unlawful “Dealer Rule” that Threatens American Industry and Innovation (Apr. 23, 2024), https://theblockchainassociation.org/blockchainassociation-and-crypto-freedom-alliance-of-texas-file-lawsuit-challenging-secs-unlawful-dealer-rule-that-threatens-american-industry-and-innovation/.

[123] See, e.g., Commissioner Hester M. Peirce and Commissioner Mark T. Uyeda, Omakase: Statement on In the Matter of Flyfish Club, LLC, SEC (Sep. 16, 2024), https://www.sec.gov/newsroom/speeches-statements/peirce-uyeda-statement-flyfish-091624.

[124] Hester M. Peirce, Token Safe Harbor Proposal 2.0 (Apr. 13, 2021), https://www.sec.gov/newsroom/speeches-statements/peirce-statement-token-safe-harbor-proposal-20.

[125] Hester M. Peirce, Comment on Digital Securities Sandbox Joint Bank of England and Financial Conduct Authority Consultation Paper (May 29, 2024), https://www.sec.gov/newsroom/speeches-statements/peirce-boe-fca-comment-05302024.

[126] Executive Order on Ensuring Responsible Development of Digital Assets, The White House (Mar. 9, 2022), https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/.

[127] Executive Order on Ensuring Responsible Development of Digital Assets, Davis Polk & Wardwell, https://www.davispolk.com/sites/default/files/2022-03/davis-polk-crypto-eo-action-Items-chart.pdf.

[128] Developing a Framework on Competitiveness of Digital Asset Technologies, International Trade Administration (May 19, 2022), https://www.regulations.gov/document/ITA-2022-0003-0001.

[129] Press Release, United States Department of the Treasury, Treasury Releases Request for Comment on Risks and Opportunities and Presented by Digital Assets (July 12, 2022), https://home.treasury.gov/news/press-releases/jy0861.

[130] Ensuring Responsible Development of Digital Assets; Request for Comment, United States Department of the Treasury (July 8, 2022), https://www.regulations.gov/docket/TREAS-DO-2022-0014/comments?pageNumber=8&sortBy=postedDate.

[131] Ensuring Responsible Development of Digital Assets; Request for Comment, United States Department of the Treasury (Sep. 20, 2022), https://www.regulations.gov/document/TREAS-DO-2022-0018-0001.

[132] Financial Stability Oversight Counsel, Report on Digital Asset Financial Stability Risks and Regulation (2022), https://home.treasury.gov/system/files/261/FSOC-Digital-Assets-Report-2022.pdf

[133] For a discussion of key takeaways regarding the report, see FSOC report on digital asset financial stability risks and regulation – Key takeaways, Davis Polk (Oct. 20, 2022), https://www.davispolk.com/insights/client-update/fsoc-report-digital-asset-financial-stability-risks-and-regulation-key.

[134] FACT SHEET: White House Releases First-Ever Comprehensive Framework for Responsible Development of Digital Assets, The White House (Sep. 16, 2022), https://www.whitehouse.gov/briefing-room/statements-releases/2022/09/16/fact-sheet-white-house-releases-first-ever-comprehensive-framework-for-responsible-development-of-digital-assets/.

[135] See Press Release, House Financial Services Committee, House Passes Financial Innovation and Technology for the 21st Century Act with Overwhelming Bipartisan Support, supra note 53.

[136] See Rep. McHenry, Patrick T, H.R. 7440 – Financial Services Innovation Act of 2024, US Congress (Feb. 23, 2024), https://www.congress.gov/bill/118th-congress/house-bill/7440. These agencies are each of the FRB, the Bureau of Consumer Financial Protection, the Department of Housing and Urban Development, the Department of the Treasury, the Federal Deposit Insurance Corporation, the Federal Housing Finance Agency, the National Credit Union Administration Board, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.

[137] Elizabeth Warren, @ewarren, X (Mar. 29, 2023), https://x.com/ewarren/status/1641138829162577928.

[138] New York State Moratorium on Crypto Mining: NYS Senate Bill S6486D (2022).

[139] Matt Houston, Amid power grid concerns, Texas lawmakers change tune on Bitcoin mining, WFAA (June 13, 2024), https://www.wfaa.com/article/news/state/texas-news/power-grid-concerns-texas-lawmakers-change-tune-bitcoin-mining/287-a053e258-9006-45dc-b99e-79ab51a6a94e.

[140] Arizona’s FinTech Sandbox website, available at https://www.azag.gov/fintech (last visited Sep. 22, 2022); Florida’s FinTech Sandbox website, available at https://flofr.gov/sitePages/FinancialTechnologySandbox.htm (last visited Sep. 22, 2022); West Virginia’s FinTech Sandbox website, available at https://dfi.wv.gov/fintech/Pages/default.aspx (last visited Sep. 22, 2022); Wyoming’s FinTech Sandbox website, available at https://wyomingbankingdivision.wyo.gov/banks-and-trust-companies/financial-technology-sandbox (last visited Sep. 22, 2022); Utah’s FinTech Sandbox website, available at https://business.utah.gov/regulatory-relief/ (last visited Sep. 22, 2022).

[141] Hawaii Department of Commerce and Consumer Affairs, DCCA RELEASE: Hawai‘i Digital Currency Innovation Lab To Conclude (Jan. 25, 2024), https://governor.hawaii.gov/newsroom/dcca-release-hawaii-digital-currency-innovation-lab-to-conclude/.

[142] FRB, Central Bank Digital Currency (CBDC), https://www.federalreserve.gov/central-bank-digital-currency.htm.

[143] Pete Schroeder, Powell says Fed not “remotely close” to a central bank digital currency, Reuters (Mar. 7, 2024), https://www.reuters.com/markets/us/powell-says-fed-not-remotely-close-central-bank-digital-currency-2024-03-07/.

[144] FRB, Money and Payments: The U.S. Dollar in the Age of Digital Transformation (Jan. 2022), https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf. See The Federal Reserve starts a U.S. CBDC discussion, Davis Polk (Jan. 31, 2022), https://www.davispolk.com/insights/client-update/federal-reserve-starts-us-cbdc-discussion.

[145] FRB, Money and Payments: The U.S. Dollar in the Age of Digital Transformation Summary of Public Comments (Apr. 2023), https://www.federalreserve.gov/publications/files/summary-of-public-comments-money-and-payments-20230420.pdf.

[146] Press Release, Federal Reserve Bank of Boston, The Federal Reserve Bank of Boston announces collaboration with MIT to research digital currency (Aug. 13, 2020), https://www.bostonfed.org/news-and-events/press-releases/2020/the-federal-reserve-bank-of-boston-announces-collaboration-with-mit-to-research-digital-currency.aspx.

[147] Federal Reserve Bank of Boston, Project Hamilton Phase 1 Executive Summary (Feb. 3, 2022), https://www.bostonfed.org/publications/one-time-pubs/project-hamilton-phase-1-executive-summary.aspx.

[148] Federal Reserve Bank of New York, Project Cedar: Improving Cross-Border Payments With Distributed Ledger Technology, https://www.newyorkfed.org/aboutthefed/nyic/project-cedar.

[149] Press Release, Federal Reserve Bank of New York, New York Fed to Participate in Joint International Research Effort on Tokenization and Cross-Border Payments (Apr. 3, 2024), https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2024/20240403.

[150] Press Release, House Financial Services Committee, House Passes CBDC Anti-Surveillance State Act (May 23, 2024), https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=409278.

[151] These states include Georgia (https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:GA2023000H1053&verid=GA2023000H1053_20240506_0_EF&), Indiana (https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:IN2024000S180&verid=IN2024000S180_20240311_0_EF&) and Nebraska (https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:NE2023000L94&verid=NE2023000L94_20240213_0_ESL&.)

[152] See FRB, Central Bank Digital Currency (CBDC), Frequently Asked Questions (last updated Apr. 11, 2023), https://www.federalreserve.gov/cbdc-faqs.htm.

[153] See, e.g., Press Release, House Financial Services Committee, McHenry, Hill, Digital Asset Working Group Republicans Request DOJ Assessment on CBDC (Oct. 5, 2022), https://financialservices.house.gov/news/documentsingle.aspx?DocumentID=408448.

[154] See Tom Akana, Julia S. Cheney & Robert M. Hunt, Central Bank Digital Currencies: Consumer Attitudes and Expectations in the United States, Federal Reserve Bank of Philadelphia (Apr. 2024), https://www.philadelphiafed.org/consumer-finance/payment-systems/central-bank-digital-currencies-consumer-attitudes-and-expectations-in-the-united-states.

[155] FRB, FDIC, OCC, Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities (Feb. 23, 2023), https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230223a1.pdf.

[156] https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230103a1.pdf.

[157] FRB, SR 23-7: Creation of Novel Activities Supervision Program (Aug. 8, 2023), https://www.federalreserve.gov/supervisionreg/srletters/SR2307.htm.

[158] FRB, SR 23-8 / CA 23-5: Supervisory Nonobjection Process for State Member Banks Seeking to Engage in Certain Activities Involving Dollar Tokens (Aug. 8, 2023), https://www.federalreserve.gov/supervisionreg/srletters/SR2308.htm.

[159] 88 Fed. Reg. 7848 (Feb. 7, 2023) (FRB “Policy Statement on Section 9(13) of the Federal Reserve Act”) https://www.federalregister.gov/documents/2023/02/07/2023-02192/policy-statement-on-section-913-of-the-federal-reserve-act#:~:text=Under%20section%209(13)%20of%20the%20Act%2C%20the%20Board,Deposit%20Insurance%20Act%20(FDIA). See Crypto’s integration into the traditional financial system is under more pressure, Davis Polk (Feb. 2, 2023), https://www.davispolk.com/insights/client-update/cryptos-integration-traditional-financial-system-under-more-pressure.

[160] 88 Fed. Reg. 7848.

[161] Federal Reserve System, Order Denying Application for Membership, Custodia Bank, Inc. (Jan. 27, 2023), https://www.federalreserve.gov/newsevents/pressreleases/files/orders20230324a1.pdf.

[162] Id.

[163] Custodia Bank, Inc. v. Fed. Rsrv. Bd. of Governors, No. 1:22-cv-125-SWS, 2024 WL 1788900 (D. Wyo. Mar. 29, 2024).

[164] Federal Reserve Bank of San Francisco, SoFi Technologies Application Approval Letter (Jan. 18, 2022), https://www.federalreserve.gov/foia/files/sofi-technologies-application-approval-letter.pdf.

[165] OCC Interpretive Letter 1170 (Jul. 22, 2020), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2020/int1170.pdf.

[166] OCC Interpretive Letter 1172 (Sep. 21, 2020), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2020/int1172.pdf.

[167] OCC Interpretive Letter 1174 (Jan. 4, 2021), https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-2a.pdf.

[168] OCC Interpretive Letter 1179 (Nov. 18, 2021) https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2021/int1179.pdf.

[169] See OCC, Conditional Approval #1259 (Feb. 4, 2021), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2021/ca1259.pdf; OCC, Application by Anchorage Trust Company, Sioux Falls, South Dakota to Convert to a National Trust Bank (Jan. 13, 2021), https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-6a.pdf; OCC, Preliminary Conditional Approval of Paxos National Trust (Apr. 23, 2021), https://www.occ.gov/news-issuances/news-releases/2021/nr-occ-2021-49a.pdf.

[170] Cooper & Kirk, Operation Choke Point 2.0: The Federal Bank Regulators Come For Crypto at 22, https://www.cooperkirk.com/wp-content/uploads/2023/03/Operation-Choke-Point-2.0.pdf. Reports also suggest that the banking regulators told several banks to cap deposits from crypto-related companies to manage risk, though the banking regulators have denied this. Veronica Irwin, Regulators Are Limiting Banks Serving Crypto Clients. Does That Violate the Law?, Unchained (Oct. 8, 2024), https://unchainedcrypto.com/regulators-are-limiting-banks-serving-crypto-clients-does-that-violate-the-law/#:~:text=The%20effort%20was%20reported%20by,Blame%20for%20Crypto%20Banking%20Issues?.

[171] See, e.g., OCC, Conditional Approval #1299 (Oct. 27, 2022), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2022/ca1299.pdf (requiring Flagstar Bank, FSB to divest from its interest in USDF Consortium LLC).

[172] See, e.g., OCC, Conditional Approval #1277 (Jan. 18, 2022), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2022/ca1277.pdf (conditioning approval on the resulting bank not engaging in any cryptoasset activities or services unless it received a prior written determination of no supervisory objection from the OCC); OCC, Conditional Approval #1270 (June 11, 2021), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2021/ca1270.pdf (conditioning approval for a Dutch bank to establish a Federal Branch on the branch not engaging in any cryptoasset related activities (including but not limited to holding crypt assets on balance sheet or in a custodial or fiduciary capacity, accepting cryptoassets as collateral, making markets or other financial intermediation in cryptoassets, or trading cryptoassets, including acting as agent) unless specifically authorized to do so by the OCC).

[173] See, e.g., OCC, Conditional Approval #1320 (Apr. 26, 2024), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2024/ca1320.pdf; OCC, Conditional Approval #1309 (July 28, 2023), https://www.occ.gov/topics/charters-and-licensing/interpretations-and-actions/2023/ca1309.pdf (in each case conditioning the purchase of certain assets and assumption of certain liabilities from the failed bank on the acquiring bank not acquiring any cryptoasset-related assets, assuming any cryptoasset related liabilities, or engaging in any cryptoasset related activities or services without prior notification of no supervisory objection from the OCC).

[174] FDIC, Advisory to FDIC-Insured Institutions Regarding FDIC Deposit Insurance and Dealings with Crypto Companies, https://www.fdic.gov/sites/default/files/2024-03/fil22035b.pdf.

[175] FDIC, Notification of Engaging in Crypto-Related Activities (Apr. 7, 2022), https://www.fdic.gov/news/financial-institution-letters/2022/fil22016.html#letter.

[176] With respect to the FDIC’s resolution powers of failed banks, it has also been reported that Flagstar Bank’s bid for the assets of the failed Signature Bank did not include approximately $4 billion in deposits related to Signature’s cryptoasset business, but it is not known whether this was a decision Flagstar Bank came to independently or at the FDIC’s request. See U.S. FDIC tells Signature Bank’s crypto clients to close accounts by April 5, Reuters (Mar. 28, 2023), https://www.reuters.com/markets/us/us-fdic-tells-signature-banks-crypto-clients-close-accounts-by-april-5-2023-03-28/.

[177] See Press Release, FDIC, FDIC Finalizes Rule to Modernize Official Signs and Advertising Statement Requirements for Insured Depository Institutions (Dec. 20, 2023), https://www.fdic.gov/news/press-releases/2023/pr23110.html.

[178] See, e.g., Press Release, FDIC, FDIC Issues Cease and Desist Letters to Five Companies For Making Crypto-Related False or Misleading Representations about Deposit Insurance (Aug. 19, 2022), https://www.fdic.gov/news/press-releases/2022/pr22060.html; Press Release, FDIC, FDIC Demands Four Entities Cease Making False or Misleading Representations about Deposit Insurance (Feb. 15, 2023), https://www.fdic.gov/news/press-releases/2023/pr23009.html; Press Release, FDIC, FDIC Demands Five Entities Cease Making False or Misleading Representations about Deposit Insurance (Jan. 19, 2024), https://www.fdic.gov/news/press-releases/2024/pr24003.html.

[179] Request for Information and Comment on Digital Assets, FDIC (May 21, 2021), https://www.federalregister.gov/documents/2021/05/21/2021-10772/request-for-information-and-comment-on-digital-assets.

[180] Comments on Request for Information and Comment on Digital Assets, FDIC (May 21, 2021), https://www.fdic.gov/federal-register-publications/comments-44.

[181] Request for Information: Digital Assets and Related Technologies, National Credit Union Administration (July 27, 2021), https://www.regulations.gov/document/NCUA-2021-0102-0001.

[182] See, e.g., Pennsylvania, Department of Banking and Securities, Virtual Currency—Statement of Policy (Apr. 20, 2024), https://www.pacodeandbulletin.gov/Display/pabull?file=/secure/pabulletin/data/vol54/54-16/542.html.

[183] See, e.g., Joseph Jasperse, 50-State Review of Cryptocurrency and Blockchain Regulation, Stevens Center for Innovation in Finance (last updated June 23, 2022), https://stevenscenter.wharton.upenn.edu/publications-50-state-review/. A number of states have updated the relevant statutes and regulations since then.

[184] See, e.g., Tex. Fin. Code. § 152.003(9) (“”Currency” means the coin and paper money issued by the United States or another country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance).

[185] FinCEN, Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies (Mar. 18, 2013), https://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-G001.pdf.

[186] FinCEN, Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies (FIN-2019-G001) (May 9, 2019), https://www.fincen.gov/sites/default/files/2019-05/FinCEN%20Guidance%20CVC%20FINAL%20508.pdf.

[187] See, e.g., In the Matter of Larry Dean Harmon, Assessment of Civil Money Penalty (Oct. 19, 2020), https://www.fincen.gov/sites/default/files/enforcement_action/2020-10-19/HarmonHelix%20Assessment%20and%20SoF_508_101920.pdf; Press Release, Treasury Department, Treasury Announces Two Enforcement Actions for over $24M and $29M Against Virtual Currency Exchange Bittrex, Inc. (Oct. 11, 2022), https://home.treasury.gov/news/press-releases/jy1006.

[188] See FinCEN, “FinCEN Proposes New Regulation to Enhance Transparency in Convertible Virtual Currency Mixing and Combat Terrorist Financing” (Oct. 19, 2023), https://www.fincen.gov/news/news-releases/fincen-proposes-new-regulation-enhance-transparency-convertible-virtual-currency.

[189] See id.

[190] OFAC, Sanctions Compliance Guidance for the Virtual Currency Industry (Oct. 2021), https://ofac.treasury.gov/media/913571/download?inline.

[191] OFAC, Questions on Virtual Currency, https://ofac.treasury.gov/faqs/topic/1626.

[192] Press Release, OFAC, Treasury Designates Iran-Based Financial Facilitators of Malicious Cyber Activity and for the First Time Identifies Associated Digital Currency Addresses (Nov. 28, 2018), https://home.treasury.gov/news/press-releases/sm556.

[193] Press Release, OFAC, U.S. Treasury Sanctions Notorious Virtual Currency Mixer Tornado Cash (Aug. 8, 2022), https://home.treasury.gov/news/press-releases/jy0916; Press Release, OFAC, U.S. Treasury Issues First-Ever Sanctions on a Virtual Currency Mixer, Targets DPRK Cyber Threats (May 6, 2022), https://home.treasury.gov/news/press-releases/jy0768.

[194] Press Release, OFAC, Treasury Designates Roman Semenov, Co-Founder of Sanctioned Virtual Currency Mixer Tornado Cash (Aug. 23, 2023), https://home.treasury.gov/news/press-releases/jy1702. A full list of OFAC’s crypto-related SDN List designations is available at Chainalysis Team, OFAC and Crypto Crime: Every OFAC Specially Designated National with Identified Cryptocurrency Addresses (Aug. 10, 2023, updated regularly as of October 2024), https://www.chainalysis.com/blog/ofac-sanctions/#2018; USA v. Roman Storm Indictment, https://www.justice.gov/usao-sdny/file/1311391/dl?inline.

[195] See, e.g., Paul Grewal, Sanctions Should Target Bad Actors. Not Technology, Coinbase (Sep. 8, 2022), https://www.coinbase.com/blog/sanctions-should-target-bad-actors-not-technology.

[196] Nikhilesh De, Ethereum Entities Largely Complied With Tornado Cash Sanctions, NY Fed Paper Says, CoinDesk (Aug. 7, 2024), https://www.coindesk.com/policy/2024/08/07/ethereum-entities-largely-complied-with-tornado-cash-sanctions-ny-fed-paper-says/.

[197] Mike Dalton, Circle, GitHub Comply With Tornado Cash Sanctions, Crypto Briefing (Aug. 8, 2022), https://cryptobriefing.com/circle-github-comply-with-tornado-cash-sanctions/.

[198] See Press Release, U.S. Attorney’s Office, Southern District of New York, Founders And CEO Of Cryptocurrency Mixing Service Arrested And Charged With Money Laundering And Unlicensed Money Transmitting Offenses (Apr. 24, 2024), https://www.justice.gov/usao-sdny/pr/founders-and-ceo-cryptocurrency-mixing-service-arrested-and-charged-money-laundering.

[199] See, e.g., In the Matter of Silvergate Capital Corporation and Silvergate Bank (July 1, 2024), https://www.federalreserve.gov/newsevents/pressreleases/files/enf20240701a1.pdf; In the Matter of Customers Bancorp, Inc. and Customers Bank (Aug. 8, 2024), https://www.federalreserve.gov/newsevents/pressreleases/files/enf20240808a1.pdf.

[200] See Frequently Asked Questions on Virtual Currency Transactions, https://www.irs.gov/individuals/international-taxpayers/frequently-asked-questions-on-virtual-currency-transactions (last visited Oct. 15, 2024).

[201] See Office of Chief Counsel, Bitcoin (BTC)/Bitcoin Cash (BCH) Hard Fork, (Mar. 22, 2021), https://www.irs.gov/pub/irs-wd/202114020.pdf.

[202] IR-2023-166 (Sept. 8, 2023),https://www.irs.gov/newsroom/irs-announces-sweeping-effort-to-restore-fairness-to-tax-system-with-inflation-reduction-act-funding-new-compliance-efforts.

[203] Richard Vanderford, IRS Sees Crypto Companies as Potential Crime-Fighting Partners, Wall Street Journal (Jan. 3, 2023), https://www.wsj.com/articles/irs-sees-crypto-companies-as-potential-crime-fighting-partners-11671656025.

[204] Kat Lucero, IRS Criminal Unit To Open Cyber Data Center, Chief Says, Law360 Tax Authority (Apr. 17, 2023), https://www.law360.com/tax-authority/articles/1597808/irs-criminal-unit-to-open-cyber-data-center-chief-says.

[205] Inflation Reduction Act of 2022 § 10301(1)(A)(ii), Pub. L. No. 117-169.

[206] 89 FR 56480 (July 9, 2024).

[207] Id. at 56539.

[208] See, e.g., Board of Governors of the Federal Reserve System (“FRB”), Economic Well-Being of U.S. Households in 2023 at 37 (May 21, 2024), https://www.federalreserve.gov/publications/files/2023-report-economic-well-being-us-households-202405.pdf.

[209] See Chainalysis Team, North America Leads World in Crypto Usage Despite Ongoing Regulatory Questions, While Stablecoin Activity Shifts Away from U.S. Services, supra note 25.

[210] See MacKenzie Sigalos, Goldman Sachs jumps into bitcoin ETFs and one hedge fund gets bullish on miners, CNBC (Aug. 15, 2024), https://www.cnbc.com/2024/08/15/goldman-sachs-jumps-into-bitcoin-etfs-while-morgan-stanley-retreats.html#:~:text=HSBC%20has%20nearly%20%243.6%20million,mostly%20from%20BlackRock%20and%20Fidelity.

[211] Howey at 299.

[212] Joseph Hall and Jai Massari, Regulating Crypto Shouldn’t Hinge on Securities Status, Law360 (Mar. 17, 2022), https://www.davispolk.com/sites/default/files/2022-03/Regulating%20Crypto%20Shouldn%27t%20Hinge%20On%20Securities%20Status.pdf.

[213] FRB, FDIC, OCC, Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities (Feb. 23, 2023), https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20230223a1.pdf.

[214] 23 NYCRR 200.2(p).

[215] 23 NYCRR 200.2(p)(1)-(3).

[216] FRB, FDIC and OCC, Joint Statement on Crypto-Asset Risks to Banking Organizations (Jan. 3, 2023), https://www.fdic.gov/news/press-releases/2023/pr23002a.pdf.

[217] Stan Higgins, SEC Chief Clayton: ‘Every ICO I’ve Seen Is a Security’, CoinDesk (Feb. 6, 2018), https://www.coindesk.com/markets/2018/02/06/sec-chief-clayton-every-ico-ive-seen-is-a-security/.

[218] Gary Gensler, SEC Chair, Remarks Before the Aspen Security Forum, supra note 112.

[219] See Jesse Coghlan, SEC wins case against defunct crypto firm over $18M ICO, Cointelegraph (Oct. 1, 2024), https://cointelegraph.com/news/sec-win-judgment-rivetz-case-18-million-crypto-ico.

[220] For an excellent description of the issues raised in this question ‎8, see Rodrigo Seira, Justin Slaughter, Katie Biber, SEC’s Path to Registration – Part I, Due to SEC Inaction, Registration is Not a Viable Path for Crypto Projects, Paradigm Policy Lab (Mar. 23, 2023), https://policy.paradigm.xyz/writing/secs-path-to-registration-part-i; Rodrigo Seira, Justin Slaughter, Katie Biber, SEC’s Path to Registration – Part II, Lessons from Crypto Projects’ Failed Attempts to Register with the SEC, Paradigm Policy Lab (Mar. 23, 2023), https://policy.paradigm.xyz/writing/secs-path-to-registration-part-ii; Rodrigo Seira, Justin Slaughter, Katie Biber, SEC’s Path to Registration – Part III, The Current SEC Disclosure Framework Is Unfit for Crypto, Paradigm Policy Lab (Apr. 20, 2023),  https://policy.paradigm.xyz/writing/secs-path-to-registration-part-iii.

[221] UCC § 12-102(a)(1).

[222] Uniform Law Commission, 2022 Amendments to UCC, https://www.uniformlaws.org/committees/community-home?communitykey=1457c422-ddb7-40b0-8c76-39a1991651ac.

[223] See, e.g., Stanford Center for Blockchain Research, https://cbr.stanford.edu/; Tepper Blockchain Initiative, https://www.cmu.edu/tepper/faculty-and-research/initiatives/blockchain-initiative/index.html; Princeton Center for the Decentralization of Power Through Blockchain Technology (DeCenter), https://decenter.princeton.edu/; Berkeley Haas Blockchain Initiative (Ripple UBRI), https://haas.berkeley.edu/blockchain/; Circle Research, Empowering crypto innovation through open-source R&D, Circle, https://www.circle.com/en/circle-research.

[224] See, e.g., In the Matter of Zachary Coburn (Nov. 8, 2018), https://www.sec.gov/files/litigation/admin/2018/34-84553.pdf (in which the SEC entered into a cease-and-desist order with the developer behind the EtherDelta smart contracts which allegedly violated Section 5 of the Securities Exchange Act of 1934 by acting as an illegally unregistered “exchange”); Indictment, U.S. v. Vladimir Okhotnikov, a/k/a “Lado,” et al.,  No. 3:23-cr-00057-IM (D. Or. Feb. 22, 2023), https://www.justice.gov/criminal/criminal-vns/file/1569606/dl.

[225] See Press Release, Department of Justice, Man Convicted for $110M Cryptocurrency Scheme (Apr. 18, 2024), https://www.justice.gov/opa/pr/man-convicted-110m-cryptocurrency-scheme.

[226] Similarly, though not directly related to smart contracts, the DOJ has also indicted people for conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering relating to exploiting the mempool of the Ethereum Network itself. See Press Release, DOJ, Two Brothers Arrested for Attacking Ethereum Blockchain and Stealing $25M in Cryptocurrency (May 15, 2024), https://www.justice.gov/opa/pr/two-brothers-arrested-attacking-ethereum-blockchain-and-stealing-25m-cryptocurrency.

[227] Gabriel Shapiro, Defining Real and Fake DAOs, Metalex (Mar. 14, 2022), https://metalex.substack.com/p/defining-real-and-fake-daos.

[228] Aaron Wright, The Rise of Decentralized Autonomous Organizations: Opportunities and Challenges. Stanford Journal of Blockchain Law & Policy (June 30, 2021), https://stanford-jblp.pubpub.org/pub/rise-of-daos/release/1.

[229] N.H. Rev. Stat. § 301-B.

[230] Tenn. Code Ann. §§ 48-250-101–48-250-118.

[231] Utah Code Ann. §48-5-101 – 406.

[232] 11 V.S.A. § 4173.

[233] W.S. §17‑31‑101–§17‑31‑116.

[234] See Wyoming Secretary of State, Business Center, https://wyobiz.wyo.gov/business/filingsearch.aspx#&&CxuWgF9E05fEZn9RY20Ub+s8arZajh4kKzu011Cm+EqQUa+IBy3X4zXZKWXe4QYOWdJMUSBvUu64U7babs4/EFdOgT2QyYsBKZlUg14G9dph2nHItADtl+dyvoewGb6jefuoUT1Wdc+eQ5JLPwhfUR4cOUSV02bNvYlxVOk45/MbjMtA (last visited Oct. 13, 2024).

[235] See 2024 FL S 882 (introduced Jan. 9. 2024), https://custom.statenet.com/public/resources.cgi?mode=show_text&id=ID:bill:FL2024000S882&verid=FL2024000S882_20240109_0_I&.

[236] See Statement of CFTC Division of Enforcement Director Ian McGinley on the Ooki DAO Litigation Victory, CFTC (June 9, 2023), https://www.cftc.gov/PressRoom/PressReleases/8715-23.

[237] See Mango Labs, LLC, Mango DAO, and Blockworks Foundation, SEC (Sep. 27, 2024), https://www.sec.gov/enforcement-litigation/litigation-releases/lr-26140.

[238] For a full list of all cryptoasset-related SEC actions, see SEC, Crypto Assets, https://www.sec.gov/securities-topics/crypto-assets.

[239] See also, Criminal Division, Crypto Enforcement, DOJ, https://www.justice.gov/criminal/criminal-fraud/crypto-enforcement.

[240] See Office of the New York State Attorney General, Cryptocurrency, https://ag.ny.gov/resources/individuals/investing-finance/cryptocurrency#oagenforcementactions.

[241] See Texas State Securities Board, Cryptocurrency Enforcement, https://ssb.texas.gov/cryptocurrency-enforcement.

[242] See Attorney General Moody Files Criminal Charges Against Two Men Operating Crypto Money Laundering Scheme Transferring Millions to Colombia, Office of the Attorney General of Florida (May 8, 2024), https://www.myfloridalegal.com/newsrelease/attorney-general-moody-files-criminal-charges-against-two-men-operating-crypto-money.

[243] See In the Matter of Silvergate Capital Corporation and Silvergate Bank (June 26, 2024), https://dfpi.ca.gov/wp-content/uploads/sites/337/2024/06/Consent-Order-Silvergate-Bank.pdf.

[244] See Press Release, Department of Justice, Man Convicted for $110M Cryptocurrency Scheme (Apr. 18, 2024), https://www.justice.gov/opa/pr/man-convicted-110m-cryptocurrency-scheme.

[245] See, e.g., SEC v. Kik Interactive Inc., 492 F.Supp.3d 169 (S.D.N.Y. Sep. 30, 2020); SEC v. Telegram Group Inc., 448 F.Supp.3d 352 (S.D.N.Y. Mar. 24, 2020).

[246] See SEC v. Terraform Labs Pte. Ltd. and Do Hyeong Kwon, 708 F. Supp. 3d 450 (S.D.N.Y. Dec. 28, 2023); SEC v. Ripple Labs et al. 682 F.Supp.3d 308 (S.D.N.Y July 13, 2023); SEC v. Coinbase, Inc. and Coinbase Global, Inc. 2024 WL 1304037 (S.D.N.Y. Mar. 27, 2024); SEC v. Binance Holdings Limited, 1:23-cv-01599-ABJ-ZMF, 2024 WL 3225974 (June 28, 2024); SEC v. Payward, Inc., et al. 23-cv-06003-WHO (N.D. Cal. Aug. 23, 2024).

[247] For a detailed discussion of these issues, see Blockchain Technology: Data Privacy Issues and Potential Mitigation Strategies, Practical Law Practice Note w-021-8235.