America's War on Crypto

U.S. Senator Cynthia Lummis (R-WY) sent a letter to Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg after her office was contacted by whistleblowers alleging the FDIC was destroying materials with respect to the digital asset activities of the agency and threatening retaliation against staff for speaking out. The letter demands Chair Gruenberg and his staff immediately cease and desist from these actions in preparation for Congressional oversight in the coming months.

“The FDIC’s alleged efforts to destroy and conceal materials from the U.S. Senate related to Operation Chokepoint 2.0 is not only unacceptable, it is illegal,” said Lummis. “If it is uncovered that anyone within the FDIC has knowingly destroyed materials or sought to obstruct the oversight functions of the Senate, it will result in swift criminal referrals to the U.S. Department of Justice. The American people deserve transparency, and I will see to it that they get the answers they deserve.”

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On January 20, 2025, Travis Hill became Acting Chairman of the Federal Deposit Insurance Corporation (FDIC). Acting Chairman Hill issued the following statement:

“It is my honor and privilege to serve as Acting Chairman of the FDIC. While the FDIC faces a broad range of issues, and as always will fulfill our mandate to promote a safe, sound, and resilient banking system, below is a list of matters I expect the FDIC to focus on in the coming weeks and months.”

• Conduct a wholesale review of regulations, guidance, and manuals to ensure our rules and approach promote a vibrant, growing economy.
• Adopt a more open-minded approach to innovation and technology adoption, including (1) a more transparent approach to fintech partnerships and to digital assets and tokenization, and (2) engagement to address growing technology costs for community banks.
• Improve the bank merger approval process and replace the 2024 Statement of Policy to ensure that merger transactions that satisfy the Bank Merger Act are approved in a timely way.
• Withdraw problematic proposals from the past three years, such as proposals on brokered deposits and corporate governance.
• Improve the supervisory process to focus more on core financial risks and less on process, and reevaluate the supervisory appeals process.
• Enhance our readiness and preparedness for resolving large financial institutions, incorporating lessons from the far-too-costly failures of 2023, including the need to be much more proactive and nimble and to improve the bidding process.
• Pursue adjustments to our capital and liquidity rules to appropriately balance driving economic growth with ensuring safety and soundness and resilience to shocks.
• Encourage more de novo activity so there is a healthy pipeline of new entrants in the banking sector.
• Work to ensure law-abiding customers have, and do not lose, access to bank accounts and banking services.
• Modernize implementation of the Bank Secrecy Act.
• Study deposit behavior to develop a more sophisticated understanding of the relative stability of different types of deposits and depositors.
• Reevaluate our disclosure practices, and expand transparency in areas that do not impact safety and soundness or financial stability.
• Ensure the FDIC remains within our statutory mandates, and stops coloring outside the lines.
• Pursue internal efficiencies to ensure we are serving as responsible stewards of the Deposit Insurance Fund.
• Reestablish a strong workforce culture, where misconduct is not tolerated and those who engage in misconduct are held accountable.

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Today SEC Acting Chairman Mark T. Uyeda launched a crypto task force dedicated to developing a comprehensive and clear regulatory framework for crypto assets. Commissioner Hester Peirce will lead the task force. Richard Gabbert, Senior Advisor to the Acting Chairman, and Taylor Asher, Senior Policy Advisor to the Acting Chairman, will serve as the task force’s Chief of Staff and Chief Policy Advisor, respectively.

Drawing from talented staff across the agency, the Task Force will collaborate with Commission staff and the public to set the SEC on a sensible regulatory path that respects the bounds of the law. To date, the SEC has relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way. Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive. The result has been confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud. The SEC can do better.

The Task Force’s focus will be to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.

The Task Force will operate within the statutory framework provided by Congress and will coordinate the provision of technical assistance to Congress as it makes changes to that framework. The Task Force will coordinate with federal departments and agencies, including the Commodity Futures Trading Commission, and state and international counterparts.

“I look forward to the efforts of Commissioner Peirce to lead regulatory policy on crypto, which involves multiple SEC divisions and offices,” said Acting Chairman Uyeda.

“This undertaking will take time, patience, and much hard work. It will succeed only if the Task Force has input from a wide range of investors, industry participants, academics, and other interested parties. We look forward to working hand-in-hand with the public to foster a regulatory environment that protects investors, facilitates capital formation, fosters market integrity, and supports innovation,” stated Commissioner Peirce.
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Blockchain Association said:

Today we, along with some of the most important crypto companies and investors, received a letter from @GOPoversight asking for information on the recent debanking of lawful companies and individuals.

We’re grateful for @RepJamesComer’s leadership on this critical issue.


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Back in March ‘23 we filed FOIA and FOIL requests to further investigate communications between regulators and banks to determine if there was direct instruction to restrict access to crypto companies.

We’re still waiting on responses. <i></i>
6/ We also launched an anonymous tipline for those impacted by debanking…

debanked@theblockchainassociation.org

…to gather stories and information. <i></i>
7/ Following our investigation, a clear pattern emerged: legal businesses and individuals were systematically denied access to banking, often with little to no explanation.

Understandably, those impacted felt compelled to stay silent – or only share their stories confidentially. <i></i>
8/ But the tide is turning and there is new leadership in DC that is committed to ending this unlawful, discriminatory practice.

And we remain committed to listening to industry, companies, and individuals who have experienced this first hand – and amplifying their stories. <i></i>
9/ This saga shows why many are drawn to crypto in the first place. We want to live in a world where everyone controls their own financial destiny, free from undue political interference.

Individuals in a lawful industry shouldn’t be punished because of overzealous regulators. <i></i>
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Today, the Federal Deposit Insurance Corporation (FDIC) released 175 documents related to its supervision of banks that engaged in, or sought to engage in, crypto-related activities.

Acting Chairman Travis Hill issued the following statement in connection with the release:

“I have been critical in the past of the FDIC’s approach to crypto assets and blockchain. As I said last March, the FDIC’s approach ‘has contributed to a general perception that the agency was closed for business if institutions are interested in anything related to blockchain or distributed ledger technology.’

“Upon becoming Acting Chairman, I directed staff to conduct a comprehensive review of all supervisory communications with banks that sought to offer crypto-related products or services. While this review remains underway, we are releasing a large batch of documents today, in advance of a court-ordered deadline of Friday. Our decision to release these documents reflects a commitment to enhance transparency, beyond what is required by the Freedom of Information Act (FOIA), while also attempting to fulfill the spirit of the FOIA request.

“Previously, the FDIC released 25 so-called ‘pause’ letters sent to 24 institutions interested in pursuing crypto- or blockchain-related activities. The documents released today include (1) additional correspondence with those 24 institutions and (2) correspondence with additional institutions beyond those 24. The documents that we are releasing today show that requests from these banks were almost universally met with resistance, ranging from repeated requests for further information, to multi-month periods of silence as institutions waited for responses, to directives from supervisors to pause, suspend, or refrain from expanding all crypto- or blockchain-related activity. Both individually and collectively, these and other actions sent the message to banks that it would be extraordinarily difficult—if not impossible—to move forward. As a result, the vast majority of banks simply stopped trying.

“Looking forward, we are actively reevaluating our supervisory approach to crypto-related activities. This includes replacing Financial Institution Letter (FIL) 16-2022 and providing a pathway for institutions to engage in crypto- and blockchain-related activities while still adhering to safety and soundness principles. The FDIC also looks forward to engaging with the President’s Working Group on Digital Asset Markets established by the President’s January 23, 2025 Executive Order.”
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In case you missed it, Judge Bibas of the U.S. Court of Appeals for the Third Circuit recently encapsulated the reason for my industry’s fury against the Gensler-led SEC in three concise sentences. The opening paragraphs of Coinbase Inc. v. Securities and Exchange Commission, No. 23-3202 (3d Cir. Jan 13, 2025), frame the issue in the case:

“Coinbase … petitioned the Securities and Exchange Commission (SEC) to promulgate rules clarifying how and when the federal securities laws apply to digital assets like cryptocurrencies and tokens. Coinbase argued in its petition that the existing securities-law framework does not account for certain unique attributes of digital assets, which make compliance economically and even technically infeasible…. [¶] The SEC denied Coinbase’s rulemaking petition. In a single paragraph, it explained that it disagreed with the petition’s concerns; that it had higher-priority agenda items—namely, everything else it was doing….”

The Court held that the SEC’s terse response was not sufficiently reasoned and, thus, was arbitrary and capricious. That holding is not at all surprising.

More significant is Judge Bibas’ concurring opinion in which he outlines “a constitutional issue that … lurks beneath” this holding. In Judge Bibas view, the SEC’s “haphazard enforcement strategy” targeting “entities that are trying to follow the law” (his words, not mine) raises due process concerns, which he summarized as follows:

“The SEC repeatedly [sued] crypto companies for not complying with the law, yet it [did] not tell them how to comply. That caginess creates a serious constitutional problem; due process guarantees fair notice. “[R]egulated parties should know what is required of them so they may act accordingly ….”

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Judge Bibas’ concurring opinion in Coinbase v. SEC, No. 23-3202 (3d Cir. 2025), is also notable for his assessment of Gensler’s actual motive—a de facto ban on crypto. In line with the industry view, he wrote that "the SEC has sidestepped the rulemaking process by pursuing a de facto ban through enforcement instead,” and then mused, “One might wonder if an agency whose mission is maintaining fair, orderly, and efficient markets is authorized to ban an emerging technology.” Good question.

The Court did not address that issue, as it was not properly before it. But I’ll share my view: It is not the prerogative of a small group of regulators to snuff out an entire industry, especially not one that aims to redesign the global financial system, the Internet, and money in a way that provides greater choice, independence, and opportunity for all. That would be an exercise of far too much power by an unaccountable few.

In short, Gensler set a very dangerous precedent with his ill-conceived campaign to kill crypto in the U.S.

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What to know:​

• Crypto representatives told lawmakers it's time to move on legislation to establish U.S. regulatory clarity for the industry during a congressional hearing.
• Democrats seized the chance to take shots at President Donald Trump's personal forays into crypto.

SEC staff has agreed in principle to dismiss its unlawful enforcement case against Coinbase, subject to Commissioner approval – righting a major wrong. We’ve always maintained that we were right on the facts and the law, and today’s announcement confirms that this case should never have been filed in the first place. This is a victory not just for Coinbase, but for our customers, the United States, and individual freedom.

Coinbase went public in April 2021. As part of that process, the SEC reviewed our business model and S1 disclosures and allowed us to go public. Two years later, they sued us. That’s despite absolutely nothing changing in our business model.

What changed over those two years was the political leadership at the SEC. In its war against crypto it acted as if it was above the law, usurping the power of Congress as set forth in the Constitution. And after millions in legal costs and fees, countless employee hours, and years of protracted litigation, we have successfully protected our customers’ rights, and held the SEC accountable.
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Austin Campbell said:

I received a message today from someone quite senior in the Democratic party asking me why I have been relentlessly hostile to @SECGov and folks like @garygensler and @amandalfischer, asking if I would consider toning it down.

I said no.
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What I did agree to do is write up something to explain why I held that belief so strongly, so this is my attempt to do that and live up to my word.
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For the four year tenure of Joe Biden, the SEC was essentially the main antagonist facing crypto outside of the perpetual antagonist that crypto faces (crypto itself, for those keeping score at home). Specifically, the SEC managed to teach a masterclass in how not to regulate, and had I sat down on Jan 1 of 2020 and written down a list of what to absolutely not, under any circumstance, do to effectively regulate a novel technology, the SEC marched down that list and then blew through it, inventing new list entries I never would have had the audacity to conceive of and also doing them. In a way, it is impressive. I have never seen someone speedrun a collapse of regulatory trust and authority in this fashion, and the incredible energy and complete imperviousness to reality, feedback, or the consequences of their actions was remarkable.

Unfortunately, it also totally fucks everything up.

So what happened? I will try to keep this at least somewhat brief and touch on the large themes of the SEC under Biden, so if I missed some things in here, please understand even in an article I only have so much space, and I only have so much time on this earth.
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Caitlin Long said:

7/ LOOKY HERE: a reference to limiting #crypto deposits as a % of a bank's total deposits. Of course redacted but I'd bet a lot of money the number is 15%. Congress should get this bank & its FDIC examiner in front of it & ask where that % limit came from, since we know many banks were verbally told to limit deposits to 15% of total (again, that verbal communication of the 15% limit violated the OCP1.0 lawsuit settlement--for multiple reasons. It also probably violated the APA & related requirements).

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The SEC has officially closed – with no action – its multi-year investigation into Uniswap Labs. Last year the SEC issued a Wells Notice, claiming that Uniswap Labs operated an unregistered securities exchange, engaged in unregistered broker or clearing firm activity, or issued an unregistered security. The SEC's decision this week reaffirms what we’ve always known. Uniswap Labs operates in full compliance with all applicable laws. The technology we build makes markets more transparent, efficient, and accessible.
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Consensys and the U.S. Securities and Exchange Commission (SEC) have reached an agreement in principle to dismiss the securities enforcement case concerning MetaMask. The resolution is subject to the approval of the Commission, after which the SEC will file a stipulation with the court to officially close the case.

According to a recent filing, the case against MetaMask marks the sixth crypto-related lawsuit that the SEC has decided to back down from. Consensys, the company behind MetaMask, expressed relief at the outcome.
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The dismissal of the MetaMask lawsuit is part of a larger pattern, as the SEC has recently backed off from other high-profile cryptocurrency cases. Legal actions against Coinbase, OpenSea, Robinhood, and Uniswap have also been dropped. These reversals suggest a shift in the SEC’s regulatory approach toward the cryptocurrency industry.

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SEC said:

Feb. 27, 2025

As part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets, the Division of Corporation Finance is providing its views[1] on “meme coins.” A “meme coin” is a type of crypto asset[2] inspired by internet memes, characters, current events, or trends for which the promoter seeks to attract an enthusiastic online community to purchase the meme coin and engage in its trading. Although individual meme coins may have unique features, meme coins typically share certain characteristics. Meme coins typically are purchased for entertainment, social interaction, and cultural purposes, and their value is driven primarily by market demand and speculation. In this regard, meme coins are akin to collectibles. Meme coins also typically have limited or no use or functionality. Given the speculative nature of meme coins, they tend to experience significant market price volatility, and often are accompanied by statements regarding their risks and lack of utility, other than for entertainment or other non-functional purposes.[3]

It is the Division’s view that transactions in the types of meme coins described in this statement, do not involve the offer and sale of securities under the federal securities laws.[4] As such, persons who participate in the offer and sale of meme coins do not need to register their transactions with the Commission under the Securities Act of 1933 (“Securities Act”) or fall within one of the Securities Act’s exemptions from registration. Accordingly, neither meme coin purchasers nor holders are protected by the federal securities laws.

Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Securities Exchange Act of 1934 each defines the term “security” by providing a list of various financial instruments, including “stock,” “note,” and “bond.” A meme coin does not constitute any of the common financial instruments specifically enumerated in the definition of “security” because, among other things, it does not generate a yield or convey rights to future income, profits, or assets of a business. In other words, a meme coin is not itself a security. The aforementioned statutory sections also provide that “investment contracts” are securities. Given that a meme coin is not itself a security, we conduct our analysis of whether a meme coin may be offered and sold as part of an investment contract under the “investment contract” test set forth in SEC v. W.J. Howey Co.[5] The Howey test analyzes whether certain arrangements or instruments are investment contracts based on their “economic realities.”[6]

In evaluating the economic realities of a transaction, the Howey test considers whether there is an investment in an enterprise premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.[7] Federal courts since Howey have explained that Howey’s “efforts of others” requirement is satisfied when “the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise.”[8]

The offer and sale of meme coins does not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others. First, meme coin purchasers are not making an investment in an enterprise. That is, their funds are not pooled together to be deployed by promoters or other third parties for developing the coin or a related enterprise. Second, any expectation of profits that meme coin purchasers have is not derived from the efforts of others. That is, the value of meme coins is derived from speculative trading and the collective sentiment of the market, like a collectible. Moreover, the promoters of meme coins are not undertaking (or indicating an intention to undertake) managerial and entrepreneurial efforts from which purchasers could reasonably expect profit.[9]

Notwithstanding the foregoing, this statement does not extend to the offer and sale of meme coins that are inconsistent with the descriptions set forth above, or products that are labeled “meme coins” in an effort to evade the application of the federal securities laws by disguising a product that otherwise would constitute a security. As noted above, the Division will evaluate the economic realities of the particular transaction.

Further, although the offer and sale of meme coins may not be subject to the federal securities laws, fraudulent conduct related to the offer and sale of meme coins may be subject to enforcement action or prosecution by other federal or state agencies under other federal and state laws.
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The Office of the Comptroller of the Currency (OCC) today took action to reaffirm that a range of cryptocurrency activities are permissible in the federal banking system.

The OCC published Interpretive Letter 1183 to confirm that crypto-asset custody, certain stablecoin activities, and participation in independent node verification networks such as distributed ledger are permissible for national banks and federal savings associations. The letter also rescinds the requirement for OCC-supervised institutions to receive supervisory nonobjection and demonstrate that they have adequate controls in place before they can engage in these cryptocurrency activities.

“The OCC expects banks to have the same strong risk management controls in place to support novel bank activities as they do for traditional ones,” said Acting Comptroller of the Currency Rodney E. Hood. “Today’s action will reduce the burden on banks to engage in crypto-related activities and ensure that these bank activities are treated consistently by the OCC, regardless of the underlying technology. I will continue to work diligently to ensure regulations are effective and not excessive, while maintaining a strong federal banking system.”

Consistent with Interpretive Letter 1183, the OCC also withdrew its participation in the joint statement on crypto-asset risks to banking organizations and the joint statement on liquidity risks to banking organizations resulting from crypto-asset market vulnerabilities.

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Coinbase has gone on the offensive against U.S. agencies that allegedly took action to keep cryptocurrency industry actors away from banking institutions. Paul Grewal, chief legal officer of Coinbase, explained that they are now scaling their discovery efforts to investigate the level of involvement of the Federal Deposit Insurance Corporation (FDIC) in Operation Chokepoint 2.0, a Biden administration campaign to de-bank crypto institutions and actors.

On social media, Grewal explained that the exchange had decided to escalate its actions in this case due to the corporation’s resistance to provide proof that it had conducted due diligence in avoiding the destruction of documents linked to this matter.

Grewal claimed that the FDIC has failed to address these concerns, only disclosing snippets that “have little to nothing to do” with the Freedom of Information Act (FOIA) requests and how the corporation handles them.

Fifty-three pages of documents have been delivered fully redacted. Grewal suspects resistance from the corporation’s leadership regarding full disclosure of its involvement in Operation Chokepoint 2.0. Other pages have heavy redactions, making it difficult to ascertain their content.

“Enough is enough. In our latest status report to the Court, we lay out why we need sworn testimony now,” Grewal stressed, linking to the full status report asking to escalate the request.
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Statement on Certain Proof-of-Work Mining Activities​

Division of Corporation Finance
March 20, 2025

Introduction​

As part of an effort to provide greater clarity on the application of the federal securities laws to crypto assets,[1] the Division of Corporation Finance is providing its views[2] on certain activities on proof-of-work networks known as “mining.” Specifically, this statement addresses the mining of crypto assets that are intrinsically linked to the programmatic functioning of a public, permissionless network, and are used to participate in and/or earned for participating in such network’s consensus mechanism or otherwise used to maintain and/or earned for maintaining the technological operation and security of such network. We refer in this statement to these crypto assets as “Covered Crypto Assets”[3] and their mining on proof-of-work networks as “Protocol Mining.”[4]

Protocol Mining​

Networks rely upon cryptography and economic mechanism design to eliminate the need for designated trusted intermediaries to verify network transactions and provide settlement assurances to users. The operation of each network is governed by an underlying software protocol, consisting of computer code, that programmatically enforces certain network rules, technical requirements, and rewards distributions. Each protocol incorporates a “consensus mechanism,” or method for enabling the distributed network of unrelated computers (known as “nodes”) that maintain the peer-to-peer network to agree on the “state,” or authoritative record of network address ownership balances, transactions, smart contract code, and other data, of the network. Public, permissionless networks allow anyone to participate in the network’s operation, including the validation of new transactions to the network in accordance with the network’s consensus mechanism.

Proof-of-work (“PoW”) is a consensus mechanism that incentivizes network transaction validation by rewarding network participants, called “miners,” who operate nodes adding computational resources to the network.[5] PoW involves validating transactions on a network and adding them in blocks to the distributed ledger. The “work” in PoW is the computational resources that miners contribute to validate transactions and add new blocks to the network. Miners do not have to own the network’s Covered Crypto Asset to validate transactions.

Miners use computers to solve complex mathematical equations in the form of cryptographic puzzles. Miners compete with their peers to solve these puzzles, and the first miner to solve a puzzle is tasked with accepting batches of transactions from other nodes and validating (or proposing) new blocks of transactions to the network. In exchange for providing validation services, miners earn “Rewards” in the form of newly “minted” or created Covered Crypto Assets that are delivered under the terms of the protocol.[6] In this way, PoW creates an incentive for miners to invest the resources necessary to add valid blocks to the network.

A miner providing validation services receives the Reward only after the other nodes in the network verify, through the protocol, that the solution is correct and valid. To this end, once a miner finds the correct solution, it broadcasts this information to other miners who can verify whether the miner properly solved the puzzle to receive the Reward. Once verified, all miners then add the new block to their own copies of the network. PoW is designed to secure the network by requiring miners to spend considerable time and computational resources to authenticate transactions. When the validation process functions in this way, it not only makes it less likely that someone would seek to undermine a network but also makes it less likely that miners could include altered transactions, such as those enabling the “double spending” of Covered Crypto Assets.[7]

In addition to self (or solo) mining, miners can join “mining pools,” which allow miners to combine their computational resources to increase their chances of successfully validating transactions and mining new blocks on the network. Mining pools have developed into various types, each with differing methods of operation and Reward distribution.[8] A pool operator typically is responsible for coordinating the miners’ computational resources, maintaining the pool’s mining hardware and software, overseeing the pool’s security measures to protect against theft and cyberattacks, and ensuring that the miners are paid their Rewards. In return, the pool operator charges a fee that is deducted from the miners’ share of the Rewards earned by the mining pool. Reward payouts vary among pools, although Rewards often are distributed across the mining pool in proportion to the amount of computational resources that each miner contributes to the pool. Miners have no obligation to stay in a pool and can choose to leave a pool at any time.

Division’s View on Protocol Mining Activities​

It is the Division’s view that “Mining Activities” (defined in this statement) in connection with Protocol Mining, under the circumstances described in this statement, do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the “Securities Act”) and Section 3(a)(10) of the Securities Exchange Act of 1934 (the “Exchange Act”).[9] Accordingly, it is the Division’s view that participants in Mining Activities do not need to register transactions with the Commission under the Securities Act or fall within one of the Securities Act’s exemptions from registration in connection with these Mining Activities.

Protocol Mining Activities Covered by this Statement​

The Division’s view pertains to the following Protocol Mining activities and transactions (“Mining Activities” and each a “Mining Activity”): (1) mining Covered Crypto Assets on a PoW network; and (2) the roles of mining pools and pool operators involved in the Protocol Mining process, including their roles in connection with the earning and distribution of Rewards. Only Mining Activities undertaken in connection with the following types of Protocol Mining are addressed in this statement.

• Self (or Solo) Mining, which involves a miner mining Covered Crypto Assets using its own computational resources. The miner may work alone or together with others to operate a node and mine Covered Crypto Assets.
• Mining Pool, which involves miners combining their computational resources with other miners to increase their chances of successfully validating transactions and mining new blocks on the network. Reward payments may flow from the network directly to the miners or indirectly to them through the pool operator.

Discussion​

Section 2(a)(1) of the Securities Act and Section 3(a)(10) of the Exchange Act each defines the term “security” by providing a list of various financial instruments, including “stock,” “note,” and “bond.” Because a Covered Crypto Asset does not constitute any of the financial instruments that are specifically enumerated in the definition of “security,” we conduct our analysis of certain transactions involving Covered Crypto Assets in the context of Protocol Mining under the “investment contract” test set forth in SEC v. W.J. Howey Co.[10] The “Howey test” is used to analyze arrangements or instruments not listed in those statutory sections based on their “economic realities.”[11]

In evaluating the economic realities of a transaction, the test is whether there is an investment of money in an enterprise premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.[12] Federal courts since Howey have explained that Howey’s “efforts of others” requirement is satisfied when “the efforts made by those other than the investor are the undeniably significant ones, those essential managerial efforts which affect the failure or success of the enterprise.”[13]

Self (or Solo) Mining​

A miner’s Self (or Solo) Mining is not undertaken with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others. Rather, a miner contributes its own computational resources, which secure the network and enable the miner to earn Rewards issued by the network in accordance with its software protocol. To earn Rewards, the miner’s activities must comply with the rules of the protocol. By adding its computational resources to the network, the miner merely is engaging in an administrative or ministerial activity to secure the network, validate transactions and add new blocks, and receive Rewards. A miner’s expectation to receive Rewards is not derived from any third party’s managerial or entrepreneurial efforts upon which the network’s success depends. Instead, the expected financial incentive from the protocol is derived from the administrative or ministerial act of Protocol Mining performed by the miner. As such, Rewards are payments to the miner in exchange for services it provides to the network rather than profits derived from the entrepreneurial or managerial efforts of others.

Mining Pool​

Likewise, when a miner combines its computational resources with other miners to increase their chances of successfully mining new blocks on the network, the miner has no expectation of profit derived from the entrepreneurial or managerial efforts of others. By adding its own computational resources to a mining pool, the miner merely is engaging in an administrative or ministerial activity to secure the network, validate transactions and add new blocks, and receive Rewards. In addition, any expectation of profits that the miners have is not derived from the efforts of a third party, such as a pool operator. Even when participating in a mining pool, individual miners still perform the actual mining activity by contributing their computational power to solve the cryptographic puzzles for validation of new blocks. Moreover, whether a miner self (or solo) mines or mines as a member of a mining pool does not alter the nature of Protocol Mining for purposes of the Howey analysis. In either case, Protocol Mining, as described in this statement, remains an administrative or ministerial activity. Further, a pool operator’s activities in operating the mining pool using the combined computational resources of participating miners primarily are administrative or ministerial in nature. While some of the pool operator’s activities may benefit the group of miners, any such efforts are not sufficient to satisfy Howey’s “efforts of others” requirement because miners primarily are relying on the computational resources that they provide in conjunction with other members to the mining pool to earn profits. To this end, a miner does not join a mining pool based on the ability to earn profits passively from the activities of the pool operator.

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Tornado Cash Delisting​

March 21, 2025

WASHINGTON — Based on the Administration’s review of the novel legal and policy issues raised by use of financial sanctions against financial and commercial activity occurring within evolving technology and legal environments, we have exercised our discretion to remove the economic sanctions against Tornado Cash as reflected in Treasury’s Monday filing in Van Loon v. Department of the Treasury.

We remain deeply concerned about the significant state-sponsored hacking and money laundering campaign aimed at stealing, acquiring, and deploying digital assets for the Democratic People’s Republic of Korea (DPRK) and the Kim regime. Treasury remains committed to using our authorities to expose and disrupt the ability of malicious cyber actors to profit from their criminal activities through the exploitation of digital assets and the digital assets ecosystem. We are also committed to enforcing our sanctions against the DRPK to constrain the regime’s ability to fund its weapons of mass destruction and ballistic missile programs. Treasury will continue to monitor closely any transactions that may benefit malicious cyber actors or the DPRK, and U.S. persons should exercise caution before engaging in transactions that present such risks.

“Digital assets present enormous opportunities for innovation and value creation for the American people,” said Secretary of the Treasury Scott Bessent. “Securing the digital asset industry from abuse by North Korea and other illicit actors is essential to establishing U.S. leadership and ensuring that the American people can benefit from financial innovation and inclusion.”

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Paul Grewal said:

Power does not recede voluntarily. It's gasps and it gasps until it no longer can. @USTreasury filed yet another late Friday pleading against Tornado Cash. After grudgingly delisting TC, they now claim they've mooted any need for a final court judgment. But that's not the law, and they know it. 1/3

Under the voluntary cessation exception, a defendant’s decision to end a challenged practice moots a case only if the defendant can show that the practice cannot “reasonably be expected to recur.” Friends of the Earth, Inc. v. Laidlaw Environmental Services (TOC), Inc., 528 U.S. 167, 189, 120 (2000). Just last Term, the Supreme Court unanimously held in FBI v. Fikre, 601 U.S. 234 (2024), that the FBI did not moot a case even when it removed the plaintiff from the No Fly List and produced a declaration representing that he would not be placed on the No Fly List in the future. See id. at 242. 2/3

Relying on that decision, the Fifth Circuit rejected an agency’s argument that its withdrawal of a determination “unilaterally and avoid judicial review” did not moot the case, because the agency could decide to revisit the decision and issue a similar determination against the private party in the future. Lewis v. United States, 88 F.4th 1073, 1078-1079 (5th Cir. 2023). Here, Treasury has likewise removed the Tornado Cash entities from the SDN, but has provided no assurance that it will not re-list Tornado Cash again. That's not good enough, and will make this clear to the district court. 3/3

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FDIC said:

Today, the Federal Deposit Insurance Corporation (FDIC) issued a Financial Institution Letter (FIL-7-2025) that provides new guidance for FDIC-supervised institutions engaging or seeking to engage in crypto-related activities. The new guidance, which rescinds FIL-16-2022, clarifies that FDIC-supervised institutions may engage in permissible crypto-related activities without receiving prior FDIC approval.

The guidance affirms that FDIC-supervised institutions may engage in permissible activities, including activities involving new and emerging technologies such as crypto-assets and digital assets, provided that they adequately manage the associated risks.

“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said FDIC Acting Chairman Travis Hill. “I expect this to be one of several steps the FDIC will take to lay out a new approach for how banks can engage in crypto- and blockchain-related activities in accordance with safety and soundness standards.”

The FDIC will continue to engage with the President’s Working Group on Digital Asset Markets and expects to issue further guidance in the future to provide additional clarity regarding banks’ engagement in particular crypto-related activities. The FDIC will also work with the other banking agencies to replace interagency documents related to crypto-assets with further guidance or regulations.

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Washington D.C., March 25, 2025 —

The Securities and Exchange Commission’s Crypto Task Force announced today it will hold four more roundtables in its ongoing series discussing crypto asset regulation. The dates and topics for each roundtable are as follows:

• April 11, 2025 - Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading
• April 25, 2025 - Know Your Custodian: Key Considerations for Crypto Custody
• May 12, 2025 – Tokenization - Moving Assets Onchain: Where TradFi and DeFi Meet
• June 6, 2025 - DeFi and the American Spirit

Each roundtable will be open to the public at SEC's headquarters (100 F Street, N.E., Washington, D.C.) and streamed live on SEC.gov. For in-person attendance, please click on the specific roundtable above and then click the registration button. Please note that space may be limited, and visitors will be subject to security checks. For virtual attendance, there is no need to register, and a recording will be posted on SEC.gov at a later date. For more information about each session including the agenda and speakers, which will be posted as they are available, or to communicate directly with the Crypto Task Force on any of the roundtable topics or other crypto-related issues, please visit the Crypto Task Force webpage.

“The Crypto Task Force roundtables are an opportunity for us to hear a lively discussion among experts about what the regulatory issues are and what the Commission can do to solve them,” said Commissioner Hester M. Peirce, leader of the Crypto Task Force.

Launched on January 21 by Acting SEC Chairman Mark T. Uyeda, the Crypto Task Force was established to help the Commission draw clear regulatory lines, provide realistic paths to registration, craft sensible disclosure frameworks, and deploy enforcement resources judiciously.
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Today marks a major win for Helium and The People’s Network. Nova Labs, the founding team behind Helium, confirms the SEC has agreed to dismiss with prejudice its claims that Nova Labs sold unregistered securities. With this dismissal, we can now definitively say that all compatible Helium Hotspots and the distribution of HNT, IOT, and MOBILE tokens through the Helium Network are not securities.

After the prior leadership at the SEC sued Nova Labs on the literal eve of the incoming administration, this landmark outcome is a pivotal turning point for the Helium community and the entire crypto industry, removing legal uncertainty for DePIN projects that use crypto incentives to build real-world infrastructure. With the dismissal of the SEC’s unregistered securities claims with prejudice, the outcome establishes that selling hardware and distributing tokens for network growth does not automatically make them securities in the eyes of the SEC. It also means that the SEC cannot bring these charges against Helium again.

We thank the new leadership at the SEC for finally providing clarity and look forward to a new era where innovation can truly thrive.
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