Regulatory update: Fed withdraws bank crypto guidance, Oregon sues Coinbase, SEC roundtable

Editor’s note: Our Regulatory Updates series highlights the latest regulatory, legal, and policy happenings relevant to the crypto industry, curated by the a16z crypto regulatory team.

Regulatory news: April 11 – 28, 2025

tl;dr

• The Securities and Exchange Commission’s (SEC) Crypto Task Force held its second roundtable, focusing on crypto trading. Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks. 
• Oregon’s Attorney General filed a securities enforcement action against crypto exchange Coinbase alleging that it had sold unregistered cryptocurrencies to people in Oregon in violation of the Oregon Securities Law.
• The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve withdrew two joint statements regarding crypto-asset risks and liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities. The Federal Reserve also rescinded two supervisory letters, which had established an expectation that state member banks provide advance notification of planned or current crypto-asset activities, and a supervisory nonobjection process for state member bank engagement in dollar token activities. The FDIC and the Office of the Comptroller of the Currency (OCC) previously rescinded similar letters.

U.S. regulatory updates

🦅 Congress

• Senator Bernie Moreno (R-Ohio) introduced the Deploying American Blockchains Act, which, in part, directs the Secretary of Commerce to serve as the principal advisor to the President on policies relating to blockchains and establishes a national blockchain deployment advisory committee. 
• House Representative Nydia M. Velázquez (D-N.Y.) introduced the Fair Taxation of Digital Assets in Puerto Rico Act, which would treat income from certain crypto activities, like mining and staking, as not derived from sources within Puerto Rico and instead subject to federal taxation.

⚖️ Department of Justice

• A Pennsylvania man pleaded guilty to filing false tax returns that underreported his income by approximately $13.1 million. He had mostly obtained the unreported income from acquiring and selling 97 pieces of digital artwork from the “CryptoPunks” collection of 10,000 unique art characters.
• A New York man was sentenced to 18 years in prison for a scheme in which he stole money from entrepreneurs, investors, and other victims by fraudulently offering to, among other things, serve as a broker for sales of large quantities of cryptocurrency, and provide short-term investments in cryptocurrency for purportedly high returns.
• The founder of crypto casino Zero Edge was arrested and charged with wire fraud and securities fraud in connection with allegations that he misappropriated and gambled away investors’ funds.
• The Federal Bureau of Investigation published its annual Internet Crime Report, which includes a section on cryptocurrency fraud.

👮 Department of Homeland Security

• United States Secret Service analysts worked with Canada’s British Columbia Securities Commission in a coordinated operation to warn victims and potential victims of a crypto fraud scam, known as “approval phishing,” in which blockchain users are tricked into granting access to a crypto wallet.

🔐 Federal Deposit Insurance Corporation / 💰 Federal Reserve 

• As mentioned in “tl;dr,” the FDIC and the Federal Reserve withdrew two joint statements regarding crypto-asset risks and liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities. The Federal Reserve also rescinded two supervisory letters, which had established an expectation that state member banks provide advance notification of planned or current crypto-asset activities, and a supervisory nonobjection process for state member bank engagement in dollar token activities. The FDIC and the OCC previously rescinded similar letters.

🪙 Office of the Comptroller of the Currency

• In remarks at the Exchequer Club Luncheon, Acting Comptroller Rodney E. Hood said that the “digitalization of financial services is not a trend — it is a transformation,” and that the OCC stands ready to support banks that wish to explore emerging opportunities involving digital assets.

📈 Securities and Exchange Commission

• As mentioned in “tl;dr,” the SEC’s Crypto Task Force held its second roundtable, focusing on crypto trading. Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks. 
• The SEC charged the founder of PGI Global, a purported crypto asset and foreign exchange trading company, for orchestrating a fraudulent scheme that raised approximately $198 million from investors worldwide and for misappropriating more than $57 million of investor funds.
• NFT gaming project CyberKongz announced that the SEC had closed its investigation into it.
• The SEC filed a joint stipulation with blockchain platform Dragonchain to dismiss the agency’s lawsuit against the firm.
• The SEC delayed a proposal to amend the rules governing the listing and trading of shares in certain exchange-traded products to permit staking and in-kind creations and redemptions.
• The SEC delayed its decision on proposed rule changes relating to Polkadot and Hedera exchange-traded products.

State and local regulatory updates

🌲 Alabama

• The Alabama Securities Commission dropped its lawsuit against crypto exchange Coinbase. The lawsuit had alleged that Coinbase sold unregistered securities in the form of crypto asset staking rewards offerings. Four other states have already dropped or announced that they will drop similar lawsuits against Coinbase.

🐎 Kentucky

• A federal judge in Kentucky ordered a stay in a lawsuit brought by 18 state attorneys general and a crypto industry group against the SEC after the agency asked for a pause to explore whether the newly created Crypto Task Force “could facilitate the potential resolution” of the case. The lawsuit had challenged the SEC’s policy of treating secondary transactions in common digital assets as uniformly “investment contracts” and of treating platforms that facilitate such transactions as intermediaries subject to the registration requirements of the securities laws.

🦫 Oregon

• As mentioned in “tl;dr,” Oregon’s Attorney General filed a securities enforcement action against crypto exchange Coinbase alleging that it had sold unregistered cryptocurrencies to people in Oregon in violation of the Oregon Securities Law.

International regulatory updates

🇦🇺 Australia

• The Full Federal Court of Australia ruled that Block Earner did not need a financial services license to offer its digital asset-related Earner product, overturning the court’s original decision that the Earner product was a financial product.

💰 Bank for International Settlements 

• The Bank for International Settlements published a report on the functions and financial stability implications of cryptocurrencies and decentralized finance.

🇧🇷 Brazil

• A Brazilian court sentenced three executives associated with the collapsed crypto Ponzi scheme Braiscompany to 128, 27, and 15 years in prison, respectively.

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