Regulatory update: Stablecoin bill negotiations, banks get crypto clarity, market structure draft bill release

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 25 – May 13, 2025

tl;dr

• The Securities and Exchange Commission’s (SEC) Crypto Task Force held its third roundtable, focusing on crypto custody. Chair Paul S. Atkins and Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks.
• The SEC’s Crypto Task Force held its fourth roundtable, focusing on tokenization. Chair Paul S. Atkins and Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks.
• House Committee on Financial Services Chair French Hill (R-Ark.) and others released a discussion draft of a bill to establish a market structure regulatory framework for digital assets in the United States.
• A procedural motion in the Senate that would have ended debate on and advanced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act failed in a 48-49 vote. Bipartisan negotiations are expected to continue, and another vote will likely be set in the near future.
• The Office of the Comptroller of the Currency (OCC) issued an interpretive letter, which confirms that national banks and federal savings associations may buy and sell assets held in custody at the customer’s direction and are permitted to outsource to third parties bank-permissible crypto-asset activities, including custody and execution services, subject to appropriate third-party risk management practices.

U.S. regulatory updates

🦅 Congress

• As mentioned in “tl;dr,” House Committee on Financial Services Chair French Hill (R-Ark.) and others released a discussion draft of a bill to establish a market structure regulatory framework for digital assets in the United States.
• As mentioned in “tl;dr,” a procedural motion in the Senate that would have ended debate on and advanced the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act failed in a 48-49 vote. Bipartisan negotiations are expected to continue, and another vote will likely be set in the near future.
• House Representative Lance Gooden (R-Tex.) sent a letter to General Services Administration (GSA) Administrator Stephen Ehikian, calling for the GSA to assess the feasibility of installing cryptocurrency ATMs in federal buildings across the United States.
• Senator Chris Van Hollen (D-Md.) and others sent a letter to Treasury Secretary Scott Bessent and Attorney General Pam Bondi expressing concerns about recent reports of meetings between Binance executives and officials from the Treasury Department.
• Senator Jeff Merkley (D-Ore.) and others introduced the End Crypto Corruption Act, which would ban the President, Vice President, Senior Executive Branch Officials, Members of Congress, and their immediate families from financially benefiting from issuing, endorsing, or sponsoring crypto assets, such as memecoins and stablecoins.
• Senator Richard Blumenthal (D-Conn.), Ranking Member of the U.S. Senate Permanent Subcommittee on Investigations, announced that he is opening a preliminary inquiry into the $TRUMP cryptocurrency, World Liberty Financial Inc. (WLFI), and other associated business ventures. Blumenthal also sent letters to Fight Fight Fight LLC and WLFI.

⚖️ Department of Justice

• A man was sentenced to more than 30 years in prison for his efforts to provide material support to the Islamic State of Iraq and al-Sham (ISIS), which included sending the terrorist organization more than $185,000 in cryptocurrency.
• The founder and former CEO of bankrupt crypto lending platform Celsius Network was sentenced to 12 years in prison for fraud and market manipulation.
• A federal district court granted the Department of Justice’s (DOJ) request to dismiss its criminal and civil forfeiture cases against the former operator of virtual currency exchange AurumXchange. The DOJ had charged the founder with operating an unlicensed money transmitting business, laundering proceeds through cryptocurrency transactions, and failing to file tax returns.
• An Iranian national was indicted in connection with his role as the founder and operator of Nemesis Market, a dark web marketplace for illegal drugs and criminal cyber-services, such as stolen financial information, fraudulent identification documents, counterfeit currencies, and computer malware. He was also charged with offering money laundering services through Nemesis Market by mixing cryptocurrencies used to pay for goods and services to obscure their origins.

💵 Department of the Treasury

• In testimony before the House Committee on Financial Services, Treasury Secretary Scott Bessent said that “the United States should be the premier destination for digital assets,” and that “digital assets are an important source of innovation that can drive usage of the U.S. dollar around the world.”
• The Financial Crimes Enforcement Network issued a finding and notice of proposed rulemaking that identifies Cambodia-based Huione Group as a financial institution of primary money laundering concern and proposes to sever its access to the U.S. financial system. The notice alleges that Huione Group laundered proceeds of virtual asset scams, including investment scams and cyber heists perpetrated by the Democratic People’s Republic of Korea.
• The Office of Foreign Assets Control sanctioned the Karen National Army, a militia group in Burma, as a transnational criminal organization, along with the group’s leader and his two sons, for their role in facilitating cyber scams, human trafficking, and cross-border smuggling.

🛍️ Federal Trade Commission

• The Federal Trade Commission and the state of Nevada charged a firm in connection with an investment training and business venture scam that offered courses in foreign exchange, binary options, cryptocurrency, and stock markets.

🪙 Office of the Comptroller of the Currency

• As mentioned in “tl;dr,” the OCC issued an interpretive letter, which confirms that national banks and federal savings associations may buy and sell assets held in custody at the customer’s direction and are permitted to outsource to third parties bank-permissible crypto-asset activities, including custody and execution services, subject to appropriate third-party risk management practices.
• Acting Comptroller of the Currency Rodney E. Hood said that he is focused on “expanding responsible bank activities involving digital assets,” and allowing digital asset activity “to occur within the federal banking system according to a safe and sound framework.” 

📈 Securities and Exchange Commission

• As mentioned in “tl;dr,” the SEC’s Crypto Task Force held its third roundtable, focusing on crypto custody. Chair Paul S. Atkins and Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks.
• As mentioned in “tl;dr,” the SEC’s Crypto Task Force held its fourth roundtable, focusing on tokenization. Chair Paul S. Atkins and Commissioners Mark T. Uyeda, Caroline A. Crenshaw, and Hester M. Peirce gave opening remarks.
• The SEC entered into a settlement agreement with Ripple Labs, Inc., Bradley Garlinghouse, and Christian A. Larsen, which resolves the agency’s enforcement action against them. The agreement requires Ripple to pay $50 million of the original civil penalty that the federal court had imposed on the company. Commissioner Caroline A. Crenshaw opposed the settlement.
• Commissioner Hester M. Peirce said that the SEC is “considering a potential exemptive order that would allow firms to use [distributed ledger technology] to issue, trade, and settle securities.”
• The SEC delayed its decisions on whether to allow the listing and trading of Litecoin,  XRP, and Dogecoin exchange-traded products.
• PayPal disclosed that the SEC had dropped its investigation into PayPal’s dollar-pegged stablecoin PYUSD “without enforcement action.”

State and local regulatory updates

🌵 Arizona

• Arizona Governor Katie Hobbs vetoed a bill, known as the Arizona Strategic Bitcoin Reserve Act, that would have allowed the state to invest up to 10% of its public funds in virtual currencies like bitcoin.

🦌 New Hampshire

• Governor Kelly Ayotte signed legislation that allows the state to invest up to 5% of public funds in a digital asset that has at least $500 billion in market capitalization, making New Hampshire the first state to allow investment of its public funds in digital assets.

🌍 International regulatory updates

🏦 Bank for International Settlements

• The Bank for International Settlements published an empirical analysis of cross-border bitcoin, ether, and stablecoin flows.

🇪🇺 European Union

• The European Central Bank established an innovation platform with around 70 market participants to test digital euro payment functionalities and explore innovative use cases. 

🇩🇪 Germany

• The Frankfurt Public Prosecutor’s Office and the Federal Criminal Police Office shut down crypto exchange eXch and seized €34 million in bitcoin, ether, litecoin, and dash. The German authorities suspect that the exchange laundered millions in stolen crypto, including from the recent Bybit hack. 

🇦🇪 United Arab Emirates

• Circle Internet Group announced that it received In-Principle Approval from the Financial Services Regulatory Authority of Abu Dhabi Global Market to operate as a money services provider.

🇬🇧 United Kingdom

• The UK government published draft legislation that would bring unregulated cryptoassets, including stablecoins, within the scope of financial services regulation.

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