Category Archives: FinTech

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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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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What Could a “Strategic Bitcoin Reserve” Mean in Practice?

by Stephen T. Gannon and Daniel M. Payne

Photos of the authors

Stephen T. Gannon and Daniel M. Payne (photos courtesy of authors)

The United States is no stranger to stockpiling strategic assets to serve important national interests. The U.S. strategic gold reserve provides financial stability and supports the value of the U.S. dollar. The U.S. strategic petroleum reserve, in contrast, protects the U.S. from emergencies and economic shocks in the oil industry, on which much of the modern economy depends. Now, the U.S. is strongly considering a new strategic reserve: the Strategic Bitcoin Reserve (“SBR”), in which billions of dollars’ worth of the digital currency Bitcoin would be securely stored as a new financial hedge and support for the U.S. dollar.

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Samuels v. Lido DAO: a Potential New Frontier for Liability in the Cryptocurrency Space

by Stephen Gannon, James Goldfarb, and Alexandra Coyle

Photos of the authors

Stephen Gannon, James Goldfarb, and Alexandra Coyle (photos courtesy of Davis Wright Tremaine LLP)

In denying motions to dismiss, court potentially expands liability for venture capital firms investing in cryptocurrency enterprises

A recent order handed down by U.S. District Judge Vince Chhabria of the Northern District of California could be a new source of concern for digital asset entrepreneurs and the venture capital firms which invest in and support them. In Samuels v. Lido DAO the court denied the motion to dismiss filed by an entity called Lido DAO (“Lido”) and a group of its institutional investors regarding what was alleged to be a sale of unregistered tokens on an exchange. Lido was and is the operator of a successful “Staking as a Service” business conducted through a decentralized autonomous organization, or a “DAO.” Founded in 2020, Lido provides a service in which it gathers ETH from individual holders, which it then pools and “stakes” to provide validation for transactions on the Ethereum blockchain. It also selects validators and provides an “oracle” to ensure that (i) the validators, (ii) the owners who pooled their ETH, and (iii) Lido itself receive the correct ETH rewards for performing the validation work.[1]

In largely denying defendants’ motions to dismiss, the court’s order potentially greatly expands the liability venture capital firms based in California might face, particularly in the context of investing in cryptocurrency enterprises, and may raise more questions than it answers for parties involved in such disputes.

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“Operation Chokepoint 2.0”: De-Banking Policies and the Adverse Use of Reputational Risk in Bank Supervision

by Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira

Photos of the authors

Left to Right: Stephen T. Gannon, Max Bonici, Elizabeth Lan Davis, and Kristal Rovira (photos courtesy of Davis Wright Tremaine LLP)

How subjective supervisory standards suppressed innovation and damaged innovators.

“The power to regulate—in addition to the power to tax—is the power to destroy.”

Peter Wallison, Judicial Fortitude (2018)

As we have previously noted, we expect that the second Trump Administration will be significantly more favorable to crypto than the Biden Administration, especially with the recent appointment of David Sacks as the Administration’s “Crypto Czar.” We anticipate that in short order the new Administration will address “de-banking,” a regulatory practice that has vexed the digital asset industry—and banking in general—over the last several years. In this context, “de-banking” means canceling banking services to crypto entities and individuals associated with them or crypto activities. It is a practice that has been sharply criticized and has become even less comprehensible as the digital asset industry has matured and embraced (indeed, has sought) reasonable regulation. In the last several days the attention paid to this issue has increased sharply as a result of comments by Marc Andreessen on the Joe Rogan podcast.

Regrettably, the de-banking problem is not new. De-banking crypto is simply the latest variation of regulators using vague and amorphous standards to supervise bank conduct through the subjective lens of what the federal banking agencies call “reputational risk.”

Below we discuss how we got here and some ways forward.

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Cryptoasset Developments: Prospects for Legal Clarity

by Kevin S. Schwartz, David M. Adlerstein, Samantha M. Altschuler, and Sabina M. Beleuz Neagu

Photos of the authors

Left to Right: Kevin S. Schwartz, David M. Adlerstein, Samantha M. Altschuler, and Sabina M. Beleuz Neagu (photos courtesy of Wachtell, Lipton, Rosen & Katz)

A resilient cryptoasset industry is emerging from weathering years of headwinds — from edicts prohibiting the banking of the industry, to an SEC leadership bent on aggressive regulation-by-enforcement in lieu of transparent rulemaking. Looking ahead, tailwinds abound: Bitcoin and Ether exchange-traded products, approved just this year, already have over $150 billion in assets under management. Leading financial institutions have announced plans to tokenize substantial new funds on public blockchains. And tens of millions of Americans own cryptoassets, as use cases continue to proliferate — from payments for goods and services, both on- and off-blockchain; to decentralized financial (DeFi) platforms; to the authentication of content provenance (an essential need amidst AI’s rapid development). With a new Administration and Congress in the offing, there are at last prospects for regulatory clarity in an arena long clouded by uncertainty.

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CFPB Issues Final “Open Banking” Rule Requiring Covered Entities to Provide Consumers Access and Transferability of Financial Data

by Jarryd Anderson, Jessica S. Carey, John P. Carlin, Roberto J. Gonzalez, Brad S. Karp, and Kannon Shanmugam

Photos of authors

Top Left to Right: Jarryd Anderson, Jessica Carey, and John Carlin. Bottom Left to Right: Roberto Gonzalez, Brad Karp, and Kannon Shanmugam. (photos courtesy of Paul Weiss)

On October 22, 2024, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) published a 594-page Notice of Final Rulemaking for its “Personal Financial Data Rights” rule, commonly known as the “Open Banking” rule, which will require covered entities—generally, providers of checking and prepaid accounts, credit cards, digital wallets, and other payment facilitators—to provide consumers and consumer-authorized third parties with access to consumers’ financial data free of charge.[1] Covered entities are required to comply with uniform standards to provide access to this financial data through consumer and developer interfaces.[2] The rule imposes requirements on authorized third parties (such as fintechs), as well as data aggregators that facilitate access to consumers’ data, including required disclosures to consumers regarding the third parties’ use and retention of the requested data and a requirement that the data only be used in a manner reasonably necessary to provide the requested product or service (thus foreclosing selling the data or using it for targeted advertising or cross selling purposes).[3]

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