Category Archives: Cryptocurrency and Digital Assets

The Newest Form of the Romance Scam: Corporate Insider Fraud Through Outsider Threat – How AI is Allowing Scammers to Make it Appear that Authorized Employees are Conducting Authorized Activity When the Opposite is True

by Tom Melvin, Rich Kando, and Kevin Madura

Left to right: Tom Melvin, Rich Kando, and Kevin Madura (photos courtesy of AlixPartners LLP)

Today’s most-concerning corporate romance is not on Coldplay’s kiss cam. Artificial-intelligence (AI)-enabled document creation, synthetic IDs, face swapping, and impersonated voice overlays have made online scams more dangerous and more ubiquitous than ever. Armed with those new tools, scammers once used them primarily to defraud individuals, with an estimated loss of $75 billion[1] is targeting corporate bank accounts and data repositories. Enter the corporate romance scam as a direct threat to two of a company’s most highly valuable assets: cash and data.

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Recent Developments in the Law of Federal Property Fraud: It’s a Long and Winding Road

by James Joseph Benjamin Jr., Katherine R. Goldstein, Michael A. Asaro, and Parvin Daphne Moyne 

Left to right: James Joseph Benjamin Jr., Katherine R. Goldstein, Michael A. Asaro, and Parvin Daphne Moyne (photos courtesy of Akin Gump Strauss Hauer & Feld LLP)

In two recent high-profile decisions, Chastain v. United States and Johnson v. United States, the U.S. Court of Appeals for the Second Circuit reversed wire fraud convictions that were based on theories resembling insider trading.[1] In both cases, the government invoked the wire fraud statute, and not a securities fraud statute, because the products at issue (non-fungible tokens and spot foreign currency) were not securities. These cases mark the latest developments in a long-running, ongoing and sometimes head-spinning debate in the courts concerning the breadth of the federal property fraud statutes.

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SEC Chair Atkins Unveils “Project Crypto” to Modernize US Securities Regulation

by Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville

Left to right: Jeremy Moorehouse, Zachary Goldman, Benjamin Neaderland, and Matthew Beville (photos courtesy of WilmerHale)

Introduction

On July 31, 2025, SEC Chairman Paul Atkins delivered a major policy address at the America First Policy Institute in Washington, D.C., unveiling “Project Crypto”—a Commission-wide initiative to modernize securities regulation in support of President Trump’s vision of the United States as the “crypto capital of the world.” Framing the moment as a defining opportunity for American leadership in digital finance, Atkins outlined a regulatory agenda focused on integrating “on-chain” (on blockchain technology) software systems into US markets, enabling decentralized finance, and launching a new “innovation exemption” to accelerate the commercial deployment of novel technologies. His remarks signal a significant shift toward a more flexible regulatory posture that could shape the future of the US digital asset market for years to come.

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The GENIUS Act: A New Era of Stablecoin Regulation

by Jeffrey Steiner, Jason Cabral, Ro Spaziani, and Sara Weed

Left to Right: Jeffrey Steiner, Jason Cabral, Ro Spaziani, and Sara Weed (Photos courtesy of the authors)

The Act is the most significant United States law affecting the digital assets industry to date and reflects the Administration’s and Congress’ priorities of establishing a comprehensive framework for the United States’ approach to digital assets and related activities.

On July 18, 2025, the President signed the Guiding and Establishing National Innovation for U.S. Stablecoins Act (the GENIUS Act or the Act) into law.  The GENIUS Act is the most significant United States law affecting the digital assets industry to date and reflects the Administration’s and Congress’ priorities of establishing a comprehensive framework for the United States’ approach to digital assets and related activities.  The legislation, which benefited from strong bipartisan support, was adopted on June 17, 2025 in the U.S. Senate by a vote of 68 to 30, and in the U.S. House of Representatives by a vote of 308 to 122, on July 17, 2025.

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DOJ Announces Policy Ending “Regulation by Prosecution” of Digital Assets

by Joel Cohen, Brent Wible, Ladan Stewart, Marietou Diouf, Robert Denault, and Elisha Mvundura 

Photos of the authors

Top left to right: Joel Cohen, Brent Wible and Ladan Stewart, Bottom left to right: Marietou Diouf, Robert Denault and Elisha Mvundura (Photos courtesy of White & Case LLP).

On April 7, 2025, Deputy Attorney General Todd Blanche issued a memorandum instructing federal prosecutors to cease pursuing “litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets,” noting that regulators and not prosecutors will “do this work outside the punitive criminal justice framework.”[1]  Under the new policy, the Justice Department will prioritize investigations and prosecutions involving individuals who defraud investors in digital assets or who use digital assets in furtherance of other crimes, including offenses related to terrorism, narcotics trafficking, human trafficking, organized crime, hacking, and cartel and gang financing.  The memorandum indicates that the Justice Department plans to close all ongoing investigations that are inconsistent with the new policy.

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OCC Affirms Regulated Entities Can Engage in Crypto and Stablecoin Activities

by Arthur S. Long, Parag Patel, Pia Naib, and Deric Behar 

Left to right: Arthur S. Long, Parag Patel, Pia Naib, and Deric Behar (photos courtesy of Latham & Watkins LLP)

In a break from restrictive Biden-era policies, OCC-supervised banks may now engage in crypto activities without supervisory nonobjection, potentially opening new avenues for innovation.

On March 7, 2025, the Office of the Comptroller of the Currency (OCC) reaffirmed that national banks and federal savings associations (collectively, banks) may participate in a range of cryptocurrency activities, including crypto custody, certain stablecoin activities, and participation in independent node verification networks.

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SEC Staff Clarifies That Meme Coins Are Not Securities

by Jenny Cieplak, Zachary Fallon, Ghaith Mahmood, Yvette D. Valdez, Stephen P. Wink, and Deric Behar

Photos of authors.

Top left to right: Jenny Cieplak, Zachary Fallon, and Ghaith Mahmood. Bottom left to right: Yvette D. Valdez, Stephen P. Wink, and Deric Behar. (Photos courtesy of Latham & Watkins LLP)

The Staff stated that most meme coins are not subject to federal securities laws or SEC fraud enforcement; who will oversee meme coins remains an open question.

On February 27, 2025, the Securities and Exchange Commission’s (SEC’s) Division of Corporation Finance published a Staff Statement on Meme Coins (the Statement). The Statement is the first tangible clarification of how the federal securities laws apply to a specific category of crypto since President Trump issued an executive order on digital assets (for more information, see this Latham blog post) and the SEC established a Crypto Task Force (for more information, see this Latham blog post). The Statement is responsive to the Crypto Task Force’s first priority (as highlighted by SEC Commissioner Hester Peirce, who leads the task force): determining the status of digital assets under the securities laws.

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Cryptoasset Developments: Banking Regulators Reversing Anti-Crypto Stance

by Kevin S. Schwartz, David M. Adlerstein, and Ledina Gocaj

Photos of authors

Left to right: Kevin S. Schwartz, David M. Adlerstein, and Ledina Gocaj (photos courtesy of Wachtell, Lipton, Rosen & Katz)

In a significant shift, the Office of the Comptroller of the Currency (OCC) recently issued an interpretive letter empowering national banks to make their own business decisions related to cryptoasset products and services. The OCC guidance, which rescinds its prior-approval requirement for national banks to engage in cryptoasset activities, comes on the heels of an announcement that the FDIC is reassessing its own supervisory approach after disclosing “pause” letters that it had previously sent to 24 banks interested in crypto-related activities. Together, these developments signal an abrupt end to the bank regulators’ arbitrarily imposed ban on banks engaging in cryptoasset-related activities, an important step forward that we had endorsed.

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Cryptocurrency Exchange KuCoin Pleads Guilty to Unlicensed Money Transmission, Agrees to Pay More Than $297.4 Million in Criminal Forfeiture, Fine

by Jonathan J. Rusch

photo of author

Photo courtesy of the author

For more than a decade, as part of its oversight of financial institutions’ compliance with the Bank Secrecy Act (BSA) and regulations thereunder, the Financial Crimes Enforcement Network (FinCEN) has repeatedly stated that any person accepting and transmitting convertible virtual currencies (“cryptocurrencies”) must register with FinCEN as money transmitters and thereafter comply with the anti-money laundering/counter-terrorism financing program, recordkeeping, and reporting requirements.[1]  Even so, a number of cryptocurrency or virtual currency businesses have ignored these longstanding requirements, sometimes resulting in massive criminal and civil penalties.[2]

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SEC’s Focus on Cyber and AI to Continue Under Trump Administration

by Andrew J. Ceresney, Charu A. Chandrasekhar, Luke Dembosky, Avi Gesser, Erez Liebermann, Julie M. Riewe, Jeff Robins, Kristin A. Snyder, and Cameron Sharp

Photos of the authors

Top left to right: Andrew J. Ceresney, Charu A. Chandrasekhar, Luke Dembosky, and Avi Gesser. Bottom left to right: Erez Liebermann, Julie M. Riewe, Jeff Robins, and Kristin A. Snyder. (Photos courtesy of Debevoise & Plimpton LLP).

On February 20, 2025, the SEC announced the creation of the Cyber and Emerging Technologies Unit (“CETU”) to focus on “combatting cyber-related misconduct and to protect retail investors from bad actors in the emerging technologies space.” In this blog post, we provide an overview of the announcement, which illustrates that the Trump administration will continue to prioritize SEC cybersecurity and artificial intelligence examinations and enforcement, with a particular emphasis on fraudulent conduct impacting retail investors.

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