Special Alert: Digital Assets/Cryptocurrency Regulation

March 2025

The new Administration convened the first “Crypto Summit”, chaired by the AI & Crypto Czar and the Director of the President’s Working Group on Digital Assets. The key areas of discussion included legislation/regulation, financial innovation, and economic opportunities. Public comments related to regulatory matters included the:

• Newly announced Executive Order establishing a Strategic Bitcoin Reserve
• End of “Operation Chokepoint 2.0” focused on crypto/digital assets and related innovation
• Current Congressional efforts to introduce legislation intended to provide regulatory certainty for a dollar-backed stablecoin and digital assets market
• Treasury Secretary’s direction to the OCC to rescind and/or amend all applicable previous guidance

Following the meeting, the OCC released Interpretive Letter 1183 to reaffirm that the crypto-asset custody, distributed ledger, and stablecoin activities, as outlined in previous Interpretive Letters issued in 2020 and 2021, are permissible for national banks and federal savings associations. The new Interpretive Letter also rescinds a requirement that OCC-supervised institutions must receive supervisory nonobjection and demonstrate that they have adequate controls in place before they may engage in these cryptocurrency activities.

Note: Actions related to and leading up to the White House Crypto Summit include:

• The day before the Crypto Summit, the Administration released the Executive Order, Establishing the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, which orders the Reserve and the Stockpile to be capitalized with Bitcoin and other digital assets, respectively, that have been forfeit as part of criminal or civil asset forfeiture proceedings. The Secretary of the Treasury and the Secretary of Commerce are to develop strategies that are “budget-neutral” strategies for acquiring additional Bitcoin; no other digital assets will be acquired except through criminal or civil asset forfeiture proceeding or in satisfaction of civil money penalty imposed by an agency without “further executive or legislative action.”
• Executive Order 14178, Strengthening American Leadership in Digital Financial Technology, which sets forth a policy to support the growth of and use of digital assets by, among other things, “providing regulatory clarity and certainty built on technology-neutral regulations, frameworks that account for emerging technologies, transparent decision making, and well-defined jurisdictional regulatory boundaries.” (See KPMG Regulatory Alert, here.)
• The formation of a bicameral Congressional working group, comprised of members of the Senate Banking Committee, the House Financial Services Committee, and the Senate and House Agriculture Committees, to “build consensus around a regulatory framework for digital assets.”
• A variety of actions by the SEC including the:
  • Formation of a new SEC Crypto Task Force and complementary Cyber and Emerging Technologies Unit (replacing the former Crypto Assets and Cyber Unit). In addition, the Crypto Task Force has:
    • Sought public comment on 48 questions on a variety of topics including Security, Public Offerings, Custody, Trading, Crypto Lending, and Tokenized Securities.
    • Scheduled a series of roundtable discussions – The Spring Sprint Toward Crypto Clarity – on areas of interest in the regulation of crypto assets. (Note: the CFTC has separately launched a series of public roundtables on trends and innovation in market structure to include digital assets.)
  • Determination to drop investigations and pause/close outstanding lawsuits against multiple crypto firms, signaling a shift in enforcement focus.
  • Recission of SEC Staff Accounting Bulletin (SAB) 121- financial reporting for companies safeguarding digital assets.