Crypto news & regulatory update: January 17 – January 31, 2025

a16z crypto Regulatory Team

Editor’s note: Our Regulatory Updates series highlights the latest regulatory, legal, and policy happenings relevant to builders in web3 and crypto, as tracked and curated by the a16z crypto regulatory team. The roundups are based on recent news, guidance, legislation, and frameworks released by regulators, industry consortia, professional associations, banks, governments, and other entities as they impact the crypto industry (or applications) around the world. We also occasionally include select resources such as talks, posts, or other commentary — from us or from others — with the updates.

🧠 tl;dr

  • President Donald Trump signed an Executive Order to establish regulatory clarity for digital financial technology and secure America’s position as the world’s leader in the digital asset economy.
  • The Securities and Exchange Commission (SEC) published Staff Accounting Bulletin No. 122, rescinding interpretative guidance in Staff Accounting Bulletin No. 121, which had directed firms safeguarding consumer crypto to track the crypto as liabilities on their balance sheets.
  • Cryptocurrency exchange KuCoin pleaded guilty to one count of operating an unlicensed money transmitting business and agreed to pay monetary penalties totaling more than $297 million. KuCoin will also exit the U.S. market for at least the next two years, and two of KuCoin’s founders, who were indicted in March 2024, will no longer have any role in KuCoin’s management or operations.

🌽 Commodity Futures Trading Commission

  • CFTC Acting Chair Caroline D. Pham appointed Harry Jung as Acting Chief of Staff to lead the CFTC’s engagement on crypto and decentralized finance.
  • Commissioner Kristin N. Johnson gave a keynote address at the University of Chicago Law School on the future of financial regulation, focusing on both crypto and artificial intelligence.

🦅 Congress

  • House Representative and Chair of the Committee on Oversight and Government Reform James Comer (R-Ky.) sent a letter to six tech executives regarding its investigation of “improper debanking of individuals and entities based on political viewpoints or involvement in certain industries such as cryptocurrency and blockchain.”
  • House Representative Gerald Connolly (D-Va.) sent a letter to House Representative and Chair of the Committee on Oversight and Government Reform James Comer (R-Ky.) urging him to investigate potential presidential conflicts of interest, including in regard to President Donald Trump’s new crypto venture, World Liberty Financial.
  • Senator Elizabeth Warren (D-Mass.) sent a letter to Howard Lutnick, Chairman and CEO of Cantor Fitzgerald and President Donald Trump’s nominee for Secretary of the Department of Commerce, posing questions regarding the relationship between Cantor Fitzgerald, its affiliates, and Tether.
  • Senator Elizabeth Warren (D-Mass.) and House Representative Jake Auchincloss (D-Mass.) sent a letter to the United States Office of Government Ethics and various regulators asking how they will address concerns regarding the launch of the $Trump and $Melania memecoins.
  • Senate Banking Committee Chair Tim Scott (R-S.C.) named Senator Cynthia Lummis (R-Wyo.) to be the first-ever chair of the new Senate Banking Subcommittee on Digital Assets.

⚖️ Department of Justice

  • As mentioned in “tl;dr,” cryptocurrency exchange KuCoin pleaded guilty to one count of operating an unlicensed money transmitting business and agreed to pay monetary penalties totaling more than $297 million. KuCoin will also exit the U.S. market for at least the next two years, and two of KuCoin’s founders, who were indicted in March 2024, will no longer have any role in KuCoin’s management or operations.
  • A cryptocurrency businessman known as “The Godfather” and a Los Angeles County Sheriff’s Department deputy agreed to plead guilty in connection with their roles in a conspiracy that targeted multiple victims in Los Angeles and violated their civil rights via intimidation, extortion, illegal search warrants, and other abuses of police power.
  • A cryptocurrency financial services “market maker” firm agreed to plead guilty and pay a total of $428,000 to resolve allegations that it attempted to manipulate the crypto market through a “wash trading” scheme.  The firm will be prohibited from participating in U.S. cryptocurrency markets.
  • A federal judge sentenced a Florida house cleaner to 2½ years in prison for her role in promoting an international cryptocurrency Ponzi scheme known as Forcount.

📈 Securities and Exchange Commission

  • As mentioned in “tl;dr,” the SEC published Staff Accounting Bulletin No. 122, rescinding interpretative guidance in Staff Accounting Bulletin No. 121, which had directed firms safeguarding consumer crypto to track the crypto as liabilities on their balance sheets.
  • SEC Acting Chair Mark T. Uyeda launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets and named Commissioner Hester Peirce to lead the task force.
  • The SEC provided an initial approval for Bitwise’s spot bitcoin and ether exchange-traded product.

🏛️ White House

  • As mentioned in “tl;dr,” President Donald Trump signed an Executive Order to establish regulatory clarity for digital financial technology and secure America’s position as the world’s leader in the digital asset economy.
  • President Donald Trump announced that he granted a full and unconditional pardon to Ross Ulbricht who had previously been sentenced to two life sentences plus 40 years in connection with his role as founder and operator of darknet marketplace Silk Road.

🌍 State

🗽 New York

  • The New York State Department of Financial Services (NYDFS) published a notice regarding “Sentiment-Based Virtual Currencies,” or memecoins.  The notice states that memecoins have characteristics that are generally incompatible with NYDFS’s Guidance on Coin-Listing and on Market Manipulation, and warns regulated entities of potential supervisory or enforcement actions if applicable laws and regulations are not followed.

🌍 International

🇦🇷 Argentina

  • Coinbase announced that it received a Virtual Asset Service Provider registration from Argentina’s National Securities Commission, which will allow it to operate within the country’s legal framework for virtual assets.

🇪🇺 European Union

  • Crypto exchange Bitpanda announced that it has secured a Markets in Crypto-Assets (MiCA) license from the German Federal Financial Supervisory Authority (BaFin).

🇬🇧 United Kingdom

  • The CEO of the UK’s Financial Conduct Authority (FCA) sent a letter to the Prime Minister setting out the FCA’s plans to support economic growth, which includes progress on a digital securities sandbox and a roadmap for digital assets starting in asset management.

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