Original author: Jack Immanuel, Galaxy
Crypto Policy Under Trump: H1 2025 Report
Compiled and edited by: BitpushNews
introduction
After taking office in January, the second Trump administration set out to make the United States the world's "crypto capital" through comprehensive regulatory reforms. This marked a sharp break from the Biden-era law enforcement-focused approach to digital assets. Since then, regulators, executive branches, and members of Congress have worked together to promote policy efforts aimed at encouraging digital asset innovation and welcoming the industry back on track. This report covers their notable achievements, unfinished business, and potential obstacles in the first half of 2025.
Overview of Policy Changes
White House
The President set the tone for policy with two important executive orders.
The first Executive Order, signed three days after taking office, rescinded the Biden Administration’s crypto-related policies; established the President’s Working Group on Digital Asset Markets (“PWG” or “the Working Group”); directed the Working Group to prepare a report containing recommendations for a federal regulatory framework; directed agencies to codify all crypto-related regulations; and prohibited the creation of a U.S. central bank digital currency. The Executive Order requires executive branch agencies to take inventory of crypto-related issues that exist within their areas of responsibility and sets clear deadlines for agencies to review, propose, and implement changes to how they address those issues. While many or even most executive branch agencies and regulators may have already undertaken such reforms on their own, the Executive Order and the creation of the Working Group structure serve as a mandate to ensure that such a review occurs.
The second executive order, signed in March, created the U.S. Strategic Bitcoin Reserve, which consists of Bitcoin alone, and the U.S. Digital Asset Reserve, which consists of other digital assets. These executive orders instruct the federal government to stop all sales of Bitcoin and study ways to acquire more Bitcoin, but prohibit it from acquiring additional reserve assets unless they come from criminal or civil asset forfeiture and civil penalties.
| January 23, 2025 | Executive Order: Strengthening American Leadership in Digital Financial Technology | Repeals Executive Order 14067 and the Treasury Department’s July 7, 2022 Framework for Exploring the Development of a U.S. CBDC. Establishes a Presidential Working Group on Digital Asset Markets within the National Economic Council, chaired by the President’s Special Advisor on AI and Crypto. Directs the Working Group to prepare a report on a proposed federal regulatory framework and the establishment of a national digital asset reserve. Directs agencies to collate all crypto-related regulations for future revision. Prohibits the creation of a U.S. CBDC. |
| March 6, 2025 | Executive Order: Establishing a Strategic Bitcoin Reserve and the United States Digital Asset Reserve | Establishes a Strategic Bitcoin Reserve comprised of Bitcoin (BTC) held by the Treasury Department through criminal or civil asset forfeitures and civil penalties. This Bitcoin is defined as government Bitcoin, which cannot be sold and is maintained as a United States reserve asset. The Departments of Treasury and Commerce are also ordered to identify “budget-neutral” strategies to acquire additional Bitcoin for the reserve. Establishes a United States Digital Asset Reserve comprised of all digital assets (except Bitcoin) held by the Treasury Department that were derived from criminal or civil asset forfeitures. Notably, the executive order does not explicitly prohibit the sale of reserve assets, but it prohibits the Treasury Department from making new reserve purchases, although the reserve can grow through additional criminal or civil asset forfeitures or fines assessed. |
Congress
Congress has made several crypto-related achievements since January. First, both chambers voted in a bipartisan manner to pass a
Resolution, repealing the IRS’s “broker rule” for digital asset sales. President Trump signed the bill into law on April 10, restoring the definition of “covered broker” and excluding DeFi exchanges that were originally required to report digital asset transactions for tax purposes. Under the repealed rule, other crypto entities that need to report this information include operators of custodial crypto trading platforms, certain crypto wallet providers, crypto self-service terminals, and certain crypto payment processors. The Treasury Department and the IRS officially
repealed the rule, but by using the Congressional Review Act (CRA) to formally reject it, Congress completely wiped out the rule, making it as if it had never existed and preventing the IRS from promulgating a "substantially similar" rule in the future unless Congress later passed new statutes to explicitly allow it.
Since January, Congress has been working on developing a regulatory framework for payment stablecoins and clarifying and defining regulatory jurisdiction for the entire crypto market. Congress tackled stablecoin legislation first, likely because such a framework is more politically feasible and relatively narrow in regulatory complexity. The Senate passed its version of the stablecoin bill, the GENIUS Act, on June 17. The GENIUS Act became the House version of the legislation, replacing the House's original proposal, the 2025 STABLE Act. Prior to the bill's passage, the main sticking point for Democrats in both chambers with the GENIUS Act was their perceived lack of strong conflict of interest and consumer protection provisions. Despite these objections, the House passed the bill on July 17 in a bipartisan vote of 308 to 122, with 12 Republicans voting against and 102 Democrats voting in favor. The President signed the GENIUS Act into law on July 18.
The House of Representatives passed its version of the market structure bill, the CLARITY Act, on July 17, with 78 Democrats joining a majority of Republicans in a broadly bipartisan vote. While such complex market structure legislation will be more difficult to pass into law, as 60 votes are required in the Senate to overcome a filibuster, the unexpectedly high level of Democratic support in the House increases the likelihood that CLARITY or a similar bill will eventually become law. The Senate Banking Committee released a discussion draft on July 22. Other congressional matters that have made progress include the Anti-CBDC Surveillance Act, which would ban the creation of central bank digital currencies and has passed the House (218-210), and the Blockchain Regulatory Clarity Act (BRCA), which would exempt software developers from AML/KYC rules. BRCA has not yet been voted on in either chamber, but is likely to be included in other legislation.
| April 10, 2025 | HJRes.25 | Congress passed a joint resolution formally rejecting the IRS’ final rule titled “Report of Aggregate Proceeds from Periodic Digital Asset Sales Services Provided by Brokers” under the CRA. President Trump signed the joint resolution into law, directing the Treasury Department and the IRS to remove the rule from the Federal Register. The rule required DeFi exchanges, custodial crypto trading platform operators, certain crypto wallet providers, crypto kiosks, and certain crypto payment processors to complete Form 1099-DA (titled “Report of Proceeds from Broker Transactions in Digital Assets”), which contains customer transaction information for tax purposes. |
| July 18, 2025 | Guidance and Establishment of a United States Stablecoin Nation Innovation Act (GENIUS) Act (S.1582) | The GENIUS Act creates a federal regulatory framework for payment stablecoin issuers and provides a state-level pathway. Payment stablecoin issuers are required to maintain a 1:1 peg to U.S. dollars and short-term liquid assets, disclose redemption policies, publish the composition of their reserves monthly, and establish risk management practices. Foreign issuers may issue their payment stablecoins in the United States with the approval of their state regulators and the Secretary of the Treasury. Payment stablecoins are defined as non-securities, but their issuers are subject to the Bank Secrecy Act (BSA) and anti-money laundering regulations. On June 17, the bill passed the Senate by a vote of 68-30, with 18 Senate Democrats supporting it. During the House’s “Crypto Week,” the bill passed by a vote of 308-122. The President signed the GENIUS Act into law on July 18. |
Securities and Exchange Commission
Since former Chairman Gary Gensler left office on January 20, the U.S. Securities and Exchange Commission (SEC), led by Trump-appointed Chairman Paul Atkins, has taken a very different approach to the crypto industry. Instead of targeting issuers and intermediaries such as token projects and crypto exchage, and adopting an approach that has been criticized as "regulation through enforcement," the SEC has established its own
The Crypto Task Force (“CTF” or “the Task Force”) engages directly with industry stakeholders to develop a regulatory framework that is conducive to innovation. To date, the CTF has held five roundtables with academic and industry stakeholders on digital asset classification, regulation of crypto trading, custody, tokenization, and DeFi. As of the time of writing in July 2025, the Task Force has held 169 meetings with industry stakeholders and academics.
In addition to engaging directly and constructively with the crypto industry, the SEC has also dropped or settled several enforcement cases against major crypto companies and exchanges, indicating a shift away from regulating the market through enforcement.
Dismissed. Under Gensler, the agency had accused Coinbase of participating in the securities market as an unlicensed exchange, allowing secondary market trading of unregistered securities. In February, the SEC agreed to file a joint motion with Justin Justin Sun to suspend the agency's lawsuit against the TRON founder for 60 days to seek a resolution. The SEC under Biden had accused Justin Sun of illegally issuing and selling TRX and BTT tokens, which the agency considered to be unregistered securities. The SEC sought to reduce its civil penalty in another enforcement case. In May, the agency sought to reduce a $125 million fine against Ripple for allegedly selling unregistered securities through its XRP token. The court rejected the request, and Ripple paid the entire fine in cash in July. Also in February, a federal court dismissed the SEC's case against Richard Heart, who was accused of accumulating $1 billion and defrauding investors through PulseChain, HEX and PulseX. The SEC decided not to refile or amend its complaint in April.
Overall, the SEC has been the most active player in crypto policy under this administration so far, issuing numerous guidance opinions, rulemaking reversals, and formal and informal statements. The first narrowing guidance the SEC issued under Trump was a staff statement on memecoins, finding that such assets were not securities because they failed to pass the Supreme Court’s ruling on multiple counts.
Howey Test. The guidance is the first of several such interpretations that place digital asset activities and products outside the SEC’s purview, including protocol mining, staking activities, and payment stablecoins. By narrowing the scope of certain digital asset products and services, the updated guidance reduces regulatory uncertainty and burdens that issuers, exchanges, and other market participants who might otherwise be subject to more stringent oversight and disclosure requirements. In addition to narrowing the scope, the SEC has also conducted several … Trading on a Registered Exchange. Days after the RFC was issued, the CFTC-regulated Bitnomial exchange self-certified the first perpetual futures contract listed on a U.S. exchange. The agency also issued a request for comment letter seeking input on the use cases, benefits, and risks of implementing 24/7 trading in derivatives markets. The action suggests the CFTC is open to the possibility of moving traditional markets toward the continuous, 24/7 trading that already exists in crypto markets.
| January 1, 2025 | Crypto Working Group Created | Then-Acting Chairman Mark Uyeda created the Crypto Working Group as part of an agency-wide effort to engage with industry stakeholders and the public to develop a regulatory framework for digital assets. Led by Commissioner Hester Peirce, the Crypto Working Group hosted roundtables, received written public comments, and met directly with market participants and academia. |
| January 23, 2025 | Staff Accounting Bulletin No. 122 (SAB 122) | Repeals Staff Accounting Bulletin No. 121 (SAB 121). SAB 121 requires institutions that have an obligation to safeguard crypto assets to recognize them as a liability and an asset on their balance sheet at fair value. Institutions are also required to disclose information about the crypto assets they are responsible for, including the type and amount of crypto assets, fair value measurements, and internal recordkeeping. Institutions should now decide for themselves whether accounting standards require them to recognize crypto assets they hold for customers as a liability. |
| February 27, 2025 | Staff Statement on Memecoin | The company's finance department staff stated that Memecoin is not a security. The department believes that transactions involving Memecoin do not constitute the issuance and sale of securities, and participants in such transactions do not need to register with the SEC. |
| March 20, 2025 | Statement on Certain Proof-of-Work Mining Activities | The company's finance department staff stated that protocol mining activities do not constitute the issuance and sale of securities, and participants in mining activities do not need to register with the SEC. This statement on the exemption of protocol mining includes independent miners, mining pools and mining pool operators. |
| April 4, 2025 | Statement on Stablecoins | The company's finance department staff stated that payment stablecoins pegged to the US dollar are not securities. Market participants who mint and redeem stablecoins for US dollar payments do not need to register with the SEC. No position is taken on non-US dollar pegged stablecoins or algorithmic stablecoins. |
| April 10, 2025 | Statement on Offerings and Registration of Securities in the Cryptoasset Market | The Division of Corporation Finance issued its opinion on crypto-related disclosure requirements during the deliberations of the SEC Crypto Working Group. The Division outlined disclosure expectations for offerings and registrations of securities in the cryptoasset market. Applicable offerings and registrations include equity or debt securities of issuers whose business is related to networks, applications and/or cryptoassets, and cryptoassets that are part of or subject to investment contracts. The statement addresses the disclosure requirements of Regulation SK, applying such disclosures to Form S-1 and Form 10. Disclosure expectations are also outlined for foreign private issuers exempt from registration via Form 20-F and issuers via Form 1-A. These issuers must clearly disclose a description of their business, risk factors, description of the securities, information about management, financial statements, and exhibits. |
| April 15, 2025 | Revocation of Joint Staff Statement and Related FAQs Regarding Broker-Dealer Custody of Digital Asset Securities | The SEC rescinded its joint staff statement with the Division of Trading and Markets and FINRA that broker-dealers that custody digital assets must comply with the Customer Protection Rule (Rule 15c3-3). The rule requires broker-dealers to hold customer assets in physical form or at a well-controlled location. The rescinded statement had warned that broker-dealer possession of private keys may not be sufficient to prove exclusive control of digital assets. In addition, the statement had questioned the ability of digital assets to meet annual broker-dealer audit requirements. However, the statement acknowledged that some companies are attempting to use permissioned distributed ledger technology to meet recordkeeping obligations. It noted that some digital asset securities may not qualify as securities under the Securities Investor Protection Act of 1970 (SIPA), and therefore SIPA protections would not apply in the event of bankruptcy of the broker-dealer holding the digital assets. FAQs issued in conjunction with the rescission of this joint staff statement clarified the applicability of Rule 15c3-3 to crypto assets. In particular, the FAQs determine that paragraph (b) of Rule 15c3-3 does not apply to crypto-assets that are not securities. The FAQs also clarify other regulations related to the SEC’s 2020 SPBD Statement; broker-dealer custody and capital requirements; SIPA; and the Securities Investor Protection Corporation (SIPC). The FAQs outline when a transfer agent for an issuer of a crypto-asset that is a security needs to register with the SEC and allows registered transfer agents to use DLT as the official master security holder document. |
| May 29, 2025 | Statement Regarding Certain Protocol Pledge Activities | The Department of Corporate Finance staff stated that certain protocol pledge activities do not constitute the offering and sale of securities. Participants in such protocol pledge activities are not required to register with the SEC. The protocol pledge activities covered by this statement include self-pledge, self-custodial pledges conducted directly with third parties, and custodial arrangements related to pledges. This statement is a departure from the SEC under the previous administration, which sued Coinbase and Kraken, alleging that they provided unregistered securities offerings through their custodial pledge services. |
| June 12, 2025 | Revocation of Exchange Act Rule 3b-16 Amendments | The SEC issued a final rule formally revoking multiple rulemakings issued between March 2022 and November 2023. The amendments to Rule 3b-16 will expand the definition of an exchange to include DeFi platforms. The SEC had explicitly expanded exchange registration to communication protocol systems, thereby involving DeFi platforms. DeFi platforms were originally required to register with the SEC as a national securities exchange or at least as a broker-dealer to comply with Regulation ATS. |
| June 12, 2025 | Rescission of the Customer Asset Protection Rule | The SEC issued a final rule that formally rescissions of multiple rulemakings issued between March 2022 and November 2023. The rescinded regulation will add a protective requirement to the current custody rule. In effect, the rule extends custody obligations to all customer assets, including crypto assets, even if the crypto assets are not securities. As a result, investment advisers that deal in crypto will need to hold clients’ crypto assets with a qualified custodian. Qualified crypto custodians will need to meet banking regulations, audit and recordkeeping requirements, and other regulatory oversight conducted by the SEC. Advisors will also need to show proof of possession or control of client crypto assets. |
| July 1, 2025 | Statement on Cryptoasset Exchange-Traded Products | The Department of Corporation Finance has issued an opinion on disclosure requirements for securities offerings and registrations by issuers of cryptoasset exchange-traded products (ETPs). The Department outlines common issues it has observed in reviewing filings for cryptoasset ETPs. The statement applies to disclosure requirements under both Regulation SK and Regulation SX. Required disclosures include a prospectus summary; risk factors; description of the business; information about the trust services provider, custodian, and fees and expenses; description of the securities; distribution plan; information about management; conflicts of interest; financial statements; and a filing fee form. |
Commodity Futures Trading Commission
The Commodity Futures Trading Commission (CFTC) has also taken some steps to change its stance and engage more directly with the crypto industry, although the magnitude of this shift is significantly smaller than that of the SEC. The CFTC withdrew guidance that emphasized the risks and their corresponding risk management that crypto derivatives exchanges and clearing houses should use when listing crypto derivatives. As a result, pre-listing reviews of new crypto derivatives have been reduced. In addition, the CFTC lifted regulatory requirements for derivatives clearing organizations (DCOs) that clear crypto-related products. The withdrawn guidance had required DCOs to conduct supervisory reviews of their systems and physical settlement arrangements to determine whether they were properly managing the risks of digital assets.
The CFTC has published a request for comment (RFC) to engage with the industry regarding perpetual derivatives, also known as “perps.” The RFC is part of the CFTC’s efforts to establish guidance and regulatory clarity regarding the perpetual derivatives (contracts with no expiration date) permitted on registered exchanges. Days after the RFC was published, the CFTC-regulated Bitnomial exchange self-certified the first perpetual futures contract listed on a U.S. exchange. The agency also published an RFC seeking input on the use cases, benefits, and risks of implementing 24/7 trading in derivatives markets. This action suggests that the CFTC is open to the possibility of moving traditional markets toward the continuous, 24/7 trading that already exists in crypto markets.
| March 28, 2025 | Rescission of Staff Advisory Opinion No. 18-14: Advisory Opinion on Listing of Virtual Currency Derivatives Products | The Division of Market Oversight and the Division of Clearing and Risk have rescinded their 2018 guidance to exchanges and clearing houses regarding listing new crypto derivatives contracts. The rescinded guidance clarified the CFTC’s priorities and expectations when reviewing new crypto derivatives listed on a designated contract market (DCM) or swap execution facility (SEF). In the rescinded guidance, the CFTC highlighted key areas of focus in its review of newly listed products, including the ability of DCMs and SEFs to self-regulate and assess their own risk. Key areas of focus discussed included enhanced market surveillance, coordination with CFTC surveillance staff, large trader reporting, engagement with market participants and other stakeholders, and DCO risk management. In rescission, the CFTC said the two divisions “have determined that the advisory opinion is no longer necessary given staff’s additional experience with listing virtual currency derivatives products and the growing growth and maturity of the market.” |
| March 28, 2025 | Rescinding Staff Advisory Opinion No. 23-07: Reviewing Risks Associated with Expansion of DCO Clearing of Digital Assets | The Division of Clearing and Risk has rescinded its 2023 guidance that noted the increased risks of clearing crypto-related products at derivatives clearing organizations (DCOs). The rescinded guidance reminded DCOs that the CFTC will use its supervisory authority to review and examine compliance with systemic safeguard requirements as it believes crypto amplifies cyber and operational risks. The CFTC will also monitor whether DCO applicants and registrants rely on entities, services, or models that present conflicts of interest. Finally, the agency will review physical settlement arrangements to see if they consider and manage the risks and obligations of digital assets. |
| April 21, 2025 | Perpetual Derivatives Request for Comments | The CFTC has opened a Request for Comments (RFC) to the public, soliciting feedback on perpetual derivatives. This is the first step in the CFTC’s consideration of allowing perpetual derivatives contracts to be listed on CFTC-registered exchanges. The RFC is intended to solicit public feedback to inform CFTC staff on the benefits, use cases, challenges, issues, and opportunities for perpetual contracts. The purpose of the RFC is to supplement the CFTC’s understanding of the perpetual derivatives market, review how existing regulations apply to perpetual derivatives, and determine whether additional regulations are necessary to address this emerging market. |
| April 21, 2025 | 24/7 Trading Request for Comments | The CFTC has opened a Request for Comments (RFC) to explore issues related to 24/7 trading. In particular, the RFC seeks comment on issues related to DCMs or SEFs offering 24/7 trading, DCOs offering 24/7 clearing services, and Futures Commission Merchants (FCMs) offering 24/7 trading and clearing services to their customers. The RFC is seeking feedback on how DCMs and SEFs can implement 24/7 trading services while maintaining strong market surveillance and operational resilience. The RFC is also looking for ways to ensure that DCOs can meet their statutory and regulatory risk management obligations when implementing 24/7 trading. Since most crypto assets can be traded 24/7, this RFC brings traditional markets one step closer to implementing these practices for regulated derivatives. |
Banking regulators
Under the Biden administration, bank regulators have come under fire from the crypto industry for restrictive guidance on banks’ interactions with blockchain and allegations of a coordinated effort to pressure banks to “disconnect” crypto-related customers, which the industry calls “Operation Chokepoint 2.0.” Key regulators include the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation.
Most notably, the banking agencies have rescinded previously jointly issued supervisory policies. One major reversal is the removal of “reputational risk” assessments from the supervisory and examination process. This is important to the crypto industry because it eliminates one reason banks were reluctant to serve crypto companies, or one way bank examiners had pressured banks not to serve crypto companies, all as part of the so-called “Operation Choke Point 2.0.” Another joint policy the banking agencies rescinded was the advance notification requirement for engaging in crypto-related activities. Under the policy, banks were required to obtain written permission, or a “no objection letter,” from the agencies before engaging in crypto-asset-related activities, a rare requirement.
In addition, bank regulators, including the OCC, have reverted to previous regulatory policies that conflict with guidance issued by the Biden administration. One example is that the OCC once again allows national banks and federal savings associations it regulates to buy and sell custodial cryptocurrencies based on customer instructions. The guidance also assures OCC-regulated institutions that they can outsource crypto-related services, such as custody and execution, to third parties as long as they properly manage risks.
| OCC | March 7, 2025 | Interpretative Letter 1183 | Rescinds Interpretative Letter 1179, which eliminated the requirement that national banks and federal savings associations obtain a letter of no objection from their supervisory office before engaging in crypto activities. Reaffirms Interpretative Letters 1170, 1172, and 1174, which enable OCC-regulated institutions to engage in crypto asset custody, certain stablecoin activities, and independent node validation networks. |
| OCC | March 20, 2025 | Notice 2025-4: Discontinuation of Reputation Risk Examinations | Removes all references to reputation risk for national banks, federal savings associations, community banks, and other OCC-regulated institutions from the Supervisory Manual pamphlet and guidance documents. This supervisory change eliminates reputation risk from bank supervisor training and the entire bank supervision process. In collaboration with relevant regulators, references to reputation risk will be removed from the joint manual and guidance |
| FDIC | March 28, 2025 | Revocation of FIL-16-2022 | Revocation of a financial institution letter titled “Notice of Engaging in Crypto-Related Activity” that required FDIC-regulated institutions to notify the institution before engaging in crypto-related activities. The FDIC confirms that institutions it regulates do not require prior approval to engage in permitted crypto-related activities. The FDIC will work with banking institutions to replace crypto-related interagency documents with documents that permit crypto-asset activities |
| FDIC | April 8, 2025 | Reputation Risk Rule Progress Update | Acting Chairman Travis Hill revealed that the FDIC is working to issue a rulemaking that would remove reputation risk from bank supervision. The rule would prohibit FDIC supervisors from taking adverse actions against banks because of reputation risk. The rule would also prohibit FDIC supervisors from requiring, directing, or encouraging banks to deny accounts based on political, social, cultural, or religious views. |
| Federal Reserve Board | April 24, 2025 | Rescinding SR 22-6 / CA 22-6 | Rescinding a supervisory letter that required state member banks to notify their primary supervisory contact before engaging in crypto-asset activities. Instead, the Federal Reserve will monitor member banks’ crypto-asset activities through regular supervisory proceedings. |
| Federal Reserve Board | April 24, 2025 | Rescinding SR 23-8 / CA 23-5 | Rescinding a supervisory letter that required state member banks to obtain a written letter of no objection from their primary supervisory contact before engaging in dollar token activities. Upon receipt of the letter of no objection, the banks will engage in ongoing supervisory review and enhanced monitoring pursuant to the now-rescinded supervisory letter. |
| Federal Reserve Board, FDIC, and OCC | April 24, 2025 | Retract Joint Statement on Risks of Crypto-Assets to Banking Institutions | The agencies retracted a joint statement that highlighted the potential risks and vulnerabilities that could arise from exposure to crypto-assets. The statement said that issuing or holding crypto-assets issued, stored, or transferred on an open, public, or decentralized network is highly likely to be inconsistent with safe and sound banking practices. |
| Federal Reserve Board, FDIC, and OCC | April 24, 2025 | Retracting Joint Statement on Liquidity Risk to Banking Institutions from Crypto-Asset Market Vulnerabilities | The agencies retracted a joint statement that warned banking institutions of elevated liquidity risk from funding sources of certain crypto-asset entities. The retracted statement claimed that the elevated liquidity risk from funding sources related to crypto-asset assets was exacerbated by the size and timing of deposit inflows and outflows. The statement defined deposits subject to increased volatility as deposits and stablecoin reserve deposits held by crypto-asset entities on behalf of their end customers. |
| OCC | May 7, 2025 | Interpretative Letter 1184 | Reiterates the authorities mentioned in Interpretative Letters 1170 and 1183. National banks and federal savings associations are permitted to buy and sell assets in custody in response to customer instructions. OCC-regulated institutions may also outsource permitted banking crypto-asset activities to third parties as long as they follow third-party risk management practices. Permitted banking crypto-asset activities include custody and execution services. |
| Federal Reserve Board | June 23, 2025 | SR 95-51: Assessing the Adequacy of Risk Management Processes and Internal Controls at State Member Banks and Bank Holding Companies | Revises the Federal Reserve Board's guidance on assessing risk management at state member banks and bank holding companies to remove references to reputational risk. References to reputation and reputational risk will be removed from supervisory materials and examination manuals and replaced with more detailed references to assessing financial risk. |
| Federal Reserve Board, FDIC, and OCC | July 14, 2025 | Joint Statement on Custody of Crypto Assets by Banking Institutions | The agencies confirm that banking institutions are permitted to provide custody services for crypto assets in either a fiduciary or non-fiduciary capacity. The joint statement outlines key risk management principles for banks engaging in the custody of crypto assets, including encryption key management, standard custody risk management, legal and compliance risks, third-party risk management, and audit programs. |
Ministry of Justice
The Department of Justice (DOJ) has released a memorandum written by Deputy Attorney General Todd Blanche that changes its enforcement priorities in the digital asset space. The DOJ will no longer prioritize prosecuting certain regulatory violations, but will instead prioritize cases involving financial harm to investors and consumers, as well as violations related to drug trafficking, organized crime, human trafficking, and terrorism. In line with these priorities, the DOJ issued a complaint seeking the forfeiture of $225 million in stablecoins, the largest amount of cryptocurrency ever seized. According to prosecutors, the funds were stolen and hidden through a complex money laundering network. In addition, the DOJ will stop prosecuting violations related to money transmission, the Bank Secrecy Act, securities and commodities registration, and broker-dealer registration unless the defendant willfully violated such requirements. The DOJ and CFTC closed their criminal and civil investigations into Polymarket in July. The agencies had been investigating whether the crypto-based prediction market violated the 2022 agreement by allowing U.S. users to place bets on its platform. In 2022, the CFTC fined Polymarket $1.4 million for operating as an unregistered binary options market.
| April 7, 2025 | Memorandum from Deputy Attorney General Todd Branch | Deputy Attorney General Branch’s memorandum seeks to shift the DOJ’s enforcement focus away from technical violations and toward cases that result in financial harm to investors and consumers and facilitate drug trafficking, terrorism, cartels, organized crime, and human trafficking. The DOJ will avoid charges for regulatory violations involving unlicensed money transmission, BSA provisions, unregistered securities, unregistered broker-dealers, and provisions of the Commodity Exchange Act unless willful intent exists. The memorandum disbands the National Cryptocurrency Enforcement Team and ends crypto enforcement in the Market Integrity and Major Fraud Units. It also emphasizes that the DOJ will work with other agencies in the President’s Digital Asset Markets Task Force. |
| June 18, 2025 | Civil Forfeiture Complaint for $225 Million in USDT | The Department of Justice filed a civil forfeiture complaint in the U.S. District Court for the District of Columbia seeking the forfeiture of more than $225 million in USDT. The complaint alleges that 93 known fraudulent deposit addresses hold large amounts of USDT as part of a blockchain-based money laundering network. The laundered funds pass through multiple layers of intermediary wallets and across various networks and exchanges. |
Other institutions
Regulators such as the Department of Labor, the Federal Housing Finance Agency (FHFA), and the Internal Revenue Service (IRS) have also been involved in policy reforms that support the crypto industry, albeit less frequently. The FHFA has further legitimized crypto assets in the mortgage market by directing Fannie Mae and Freddie Mac to recognize cryptocurrencies as borrower assets in their mortgage reviews. The Department of Labor rescinded a 2022 guidance that had warned plan fiduciaries to be extremely cautious before adding cryptocurrencies as an option on the investment menu of 401(k) plans. The updated guidance is intended to reflect the department's increased focus on investment types in these plans.
Neutral
| Department of Labor | May 28, 2025 | Rescinding 2022 Guidance on 401(k) Plans Regarding Cryptocurrency | The Employee Benefits Security Administration has rescinded Compliance Assistance Bulletin No. 2022-01, which had warned plan fiduciaries to use “extreme caution” before adding cryptocurrency as an option on the investment menu of 401(k) plans. The bulletin had focused on “serious concerns” associated with crypto investments in these accounts, including speculative risks, insufficient information for participants, custody and recordkeeping issues, and valuation problems. |
| FHFA | June 25, 2025 | Directive to Consider Cryptocurrency as an Asset in Single-Family Loans Delivered to Fannie Mae and Freddie Mac | As regulator, FHFA directed Fannie Mae and Freddie Mac to develop a proposal to include cryptocurrency as an eligible asset held by borrowers in their single-family mortgage risk assessments. The firms must do so so that cryptocurrency is recognized in the assessments without conversion to U.S. dollars. Only crypto assets that can be stored on a U.S.-regulated centralized exchange will be recognized in these assessments. |
| IRS | July 11, 2025 | Repeal of Crypto Broker Tax Rule | The Treasury Department and the IRS officially removed the final rule titled “Report of Gross Proceeds from Regular Digital Asset Sales Services Provided by Brokers” from the Code of Federal Regulations. The implementation of this removal was specified by Congress through a joint resolution passed under the Congressional Review Act and signed into law by President Trump in April. This removal exempts decentralized finance exchanges, custodial crypto trading platform operators, certain crypto wallet providers, crypto kiosks, and certain crypto payment processors from Form 1099-DA tax reporting requirements and KYC requirements. However, centralized exchanges that provide custodial crypto remain subject to reporting obligations. |
Unfinished business
We expect the current administration and Congress to continue to push policy proposals that support the digital asset sector. Now that the GENIUS Act has become law, the more difficult task will be to address market structure through
Broad legislative package. The House version of the market structure legislation, the Digital Asset Market Clarity Act of 2025 (CLARITY Act), passed the House on July 17. However, progress in the Senate has been slower, with a discussion draft released on July 22.
Future crypto-related legislation still faces obstacles. In particular, the “rebellion” on the president’s right has delayed passage of the GENIUS Act, and the crypto business run by the president’s family could create problems in advancing market structure in the Senate. Democrats claim the president has a conflict of interest due to his family’s crypto activities, which include the Trump Memecoin, stablecoin USD1, and DeFi venture World Liberty Financial. Additionally, CLARITY is silent on decentralized finance (“DeFi”), but we expect AML/KYC and national security issues related to DeFi could become a sticking point in the Senate’s debate over its own market structure legislation, currently known as the Responsible Financial Innovation Act.
The chances of passage are based on Galaxy Research's assessment of congressional timelines, policy priorities and the political landscape.
| Fall 2025 | Anti-CBDC Surveillance Act (HR1919, S.1124) | The bill prohibits the Federal Reserve Bank from directly issuing a central bank digital currency (CBDC) or a substantially similar digital asset. The bill also prohibits the Federal Reserve Bank from indirectly offering a CBDC or a substantially similar digital asset through a financial institution or other intermediary. The Federal Reserve Board is prohibited from testing, researching, developing, creating, or implementing a CBDC, and from using a CBDC to implement monetary policy. The Federal Reserve Board may not issue a CBDC or a substantially similar digital asset unless Congress grants authorization. The bill passed the House of Representatives on July 17 by a vote of 219-210. | 50% |
| Fall 2025 | Clarity in Digital Asset Markets (CLARITY) Act of 2025 (HR3633) | The CLARITY Act would create a federal regulatory framework for crypto market structure. The bill would give the CFTC significant authority to regulate crypto markets by defining many digital assets as digital commodities. Digital commodities and payment stablecoins are excluded from the definition of securities under the Securities Act of 1933. DeFi activities are excluded from most of the requirements of the act, with the exception of anti-fraud and anti-manipulation requirements. The bill would also allow financial holding companies to engage in digital commodity-related activities. The bill creates qualified digital asset custody requirements. The CLARITY Act passed the House of Representatives on July 17 by a vote of 294-134. Progress in the Senate has been slower; furthermore, the bill faces the uphill task of obtaining 60 votes to pass. | 40% |
In addition to Congress, regulators are also considering further exemptions for crypto products and clarifying guidance on how emerging crypto products will be affected by regulation.
| SEC | Within the next 6 months | Clarifying the regulation of tokenized securities | Commissioner Hester Peirce hinted this would be coming in a July statement in which she said the SEC was open to updating its rules or creating exemptions for issuers of tokenized securities | 70% |
| SEC | Within the next 6 months | Exempt certain NFT fundraising from securities regulation | Commissioner Pierce said at the Crypto Working Group roundtable that certain NFTs are not securities. Similar to the exemption for protocol mining, Pierce hinted that using NFTs as a fundraising mechanism for various projects may be next in line for a securities exemption. She has said elsewhere that she believes NFTs, which are powered by smart contracts and grant royalties to their creators, should not be regulated like securities. | 70%|
| Treasury | Within the next 6 months | Formal announcement of the establishment of the U.S. Strategic Bitcoin Reserve and the U.S. Digital Asset Reserve | Following the Executive Order requiring the establishment of the U.S. Strategic Bitcoin Reserve and the U.S. Digital Asset Reserve, the Treasury Department may announce the formal establishment of these reserves and their implementation, including their digital asset composition. | 40% |
| Treasury | Within the next 12 months | Write rules and guidelines to implement the GENIUS Act | Under the GENIUS Act, the Treasury Department must develop guidelines and rules to implement the provisions of the Act, including regarding the treatment of foreign issuers. | 80% |
Finally, the White House may publicly release policy proposals that were originally undertaken by the executive order. The recommendations of the President’s Digital Asset Markets Working Group have not yet been made available to the public, but will likely have been delivered to the White House on July 22, 2025 (180 days after the executive order was signed). If released, these recommendations could inform future regulation and legislation.
| Presidential Working Group on Digital Asset Markets | July 2025 | 180-Day Report on Digital Assets | Executive Order 14178 requires the Presidential Working Group to produce a report recommending a federal regulatory framework for digital assets, including stablecoins, as well as market structure, oversight, consumer protection, and risk management provisions. The report also focuses on the creation and maintenance of a national digital asset reserve and national security issues related to digital assets. | 95% |
Court Cases
In May, Samourai Wallet filed a motion requesting
Dismissal of the criminal case brought by the Department of Justice. Samourai Wallet, a non-custodial bitcoin wallet and coin mixing service, was charged with operating an unlicensed money transmission business and conspiracy to launder money. In light of the Branch Memorandum and recent evidence, Samourai Wallet argued that the case should be dismissed because FinCEN’s 2019 guidance did not classify anonymization software providers as money services businesses. Due to the platform’s non-custodial model, Samourai Wallet argued that it never controlled funds or private keys. The defendants used
Brady requested disclosures to support their position. In a letter obtained by the defendants, FinCEN told prosecutors that Samourai Wallet’s failure to own private keys indicated that the platform was not acting as a money services business. In July, the Southern District of New York filed a
The superseding indictment extended the timeline of the charges by two months, added a $150 million total for money laundering, inserted a charge of using laundered proceeds for drug trafficking-related purposes and deleted all but one reference to “unauthorized” money transmissions.
This month, the federal government decided not to continue fighting the case filed by Coin Center on behalf of Tornado Cash in the U.S. Court of Appeals. The U.S. Court of Appeals dismissed the case because Tornado Cash had recently obtained relief from a lower court. Previously, the U.S. District Court for the Western District of Texas ruled that the Office of Foreign Assets Control (OFAC) should lift sanctions on Tornado Cash. As a result, OFAC removed Tornado Cash from its Specially Designated Nationals List in March. Coin Center argued that OFAC exceeded its authority by adding it to the list. However, the founders of Tornado Cash still face criminal charges. Roman Storm, co-founder of Tornado Cash, is on trial in the U.S. District Court for the Southern District of New York, facing charges of money laundering, violating U.S. sanctions, and operating an unlicensed money transmission business.
Storm claims Tornado Cash is an independent, decentralized protocol that he has no control over and that the code is protected by the First Amendment’s free speech. If convicted, he faces up to 45 years in prison.
in conclusion
Overall, the crypto regulatory landscape looks promising. There is significant momentum across agencies and the White House, with regulatory leaders issuing statements, guidance, and rulemaking that support innovation and advancement in digital assets. Congress continues to face challenges in passing broad market structure legislation due to intra- and inter-party conflict. While complexities associated with DeFi dealings and the Trump family’s crypto business may pose obstacles, the large number of Democrats in the House of Representatives supporting GENIUS and CLARITY is an optimistic sign that the path to passage in the Senate may not be as difficult as previously thought. Regardless, the digital asset industry stands to benefit from policy progress aimed at aligning old and new regulations with digital asset products. With clear rules, the industry will be able to thrive by better complying with laws and regulations and generating new, innovative, safe, and responsible products that boost the U.S. economy.
