CryptoLink - April 2025

CryptoLink is a compilation of news stories published by outside organizations. Akin aggregates the stories, but the information contained in them does not necessarily represent the beliefs or opinions of the firm. Akin's April CryptoLink update includes developments and events that occurred in April 2025.

Following a two-week Easter recess at the end of April, Congress returned to Washington, D.C. with all eyes on budget reconciliation. Individual committees marked up legislation in accordance with reconciliation directives to pay for immigration, energy and tax priorities, including the extension of the Tax Cuts and Jobs Act (TCJA) and the addition of other Trump priorities like no tax on overtime, tips, and social security. After extensive negotiations among House Republican factions, the final bill passed on Thursday, May 22, by a vote of 215-214. It will now be considered by the Senate, which is likely to make changes in a number of areas. While this process dominates members' attention, comprehensive crypto legislation has moved to the backburner and may not be revisited until later this summer. However, the House recently released a draft of its digital assets regulatory framework bill, and stablecoin legislation has remained a priority. In an April markup, the House Financial Services Committee reported favorably the Stablecoin Transparency and Accountability for a Better Ledger Economy Act (STABLE; H.R. 2392) by a vote of 32-17. STABLE is a rival bill to the Senate's Guiding and Establishing National Innovation for U.S. Stablecoin Act (GENIUS; S.394). Two weeks after Senate Democrats united to block the GENIUS Act, a bipartisan group of Senators reached an agreement giving the bill enough support to clear a key procedural hurdle by a vote of 66-32. GENIUS is now likely to pass in the Senate in the next few weeks. While GENIUS and STABLE overlap in a number of areas, key differences would still need to be ironed out in conference before President Trump can sign any final bill into law.

Spotlight: DOJ Memorandum on Digital Asset Enforcement

U.S. Deputy Attorney General, Todd Blanche, Issues Memorandum on 'Ending Regulation by Prosecution' and Disbands National Cryptocurrency Enforcement Team

On April 7, 2025, the U.S. Deputy Attorney General Todd Blanche issued a memorandum to employees of the U.S. Department of Justice (DOJ) regarding the digital asset industry with the subject "Ending Regulation by Prosecution" (the April 2025 DOJ Digital Assets Memorandum). The April 2025 DOJ Digital Assets Memorandum states that the DOJ "is not a digital assets regulator" and that the prior administration used the DOJ to "pursue a reckless strategy of regulation by prosecution, which was ill conceived and poorly executed." The April 2025 DOJ Digital Assets Memorandum further states that the DOJ will no longer pursue "litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets," noting that regulators will "do this work outside the punitive criminal justice framework."

The April 2025 DOJ Digital Assets Memorandum comes after President Trump's public remarks that his administration would "end the regulatory weaponization against digital assets." The April 2025 DOJ Digital Assets Memorandum references Executive Order 14178, which directed the DOJ to prioritize investigations and prosecutions that involve conduct victimizing investors, "including embezzlement and misappropriation of customers' funds on exchanges, digital asset investment scams, fake digital asset development projects such as rug pulls, hacking of exchanges and decentralized autonomous organizations resulting in the theft of funds, and exploiting vulnerabilities in smart contracts." The April 2025 DOJ Digital Assets Memorandum states that ongoing investigations that are inconsistent with the priorities listed in the memorandum should be closed. It further notes that the "Office of the Deputy Attorney General will work with the Criminal Division and Executive Office for United States Attorneys (EOUSA) to review ongoing cases for consistency with this policy."

Federal prosecutors are further directed to consider certain charging considerations when deciding whether to pursue criminal actions in the digital asset space, including prioritizing holding accountable individuals who cause "financial harm to digital asset investors and consumers." According to the April 2025 DOJ Digital Assets Memorandum, prosecutors should not charge regulatory violations in cases involving digital assets, such as violations of the Bank Secrecy Act, unless there is evidence that the defendant knew of the licensing or registration requirement violated such a requirement willfully.

In addition, the April 2025 DOJ Digital Assets Memorandum disbanded the National Cryptocurrency Enforcement Team, effective immediately, and stated that the DOJ would fully participate with President Trump's Working Group on Digital Asset Markets (which was established in Executive Order 14178), via attorneys designated by the Justice Department's senior leadership. The April 2025 DOJ Digital Assets Memorandum further directs the "Market Integrity and Major Frauds Unit shall cease cryptocurrency enforcement in order to focus on other priorities, such as immigration and procurement frauds."

The April 2025 DOJ Digital Assets Memorandum also directs the Office of Legal Policy and the Office of Legislative Affairs to evaluate and propose legislative and regulatory changes to improve asset forfeiture efforts in the digital assets space due to concerns that digital asset investors who suffered losses as a result of fraud and theft may have such losses calculated at a value when the digital asset market was at a lower point and victims were therefore unable to benefit from gains during or after the period in which they would have otherwise possessed the asset.

The April 2025 DOJ Digital Assets Memorandum can be found here.

Acting CFTC Chair Caroline Pham Lauds DOJ Policy 'Ending Regulation by Prosecution' of the Digital Assets Industry and Directs CFTC Staff to Comply with Executive Orders

On April 8, 2025, the Commodity Futures Trading Commission's (CFTC) Acting Chair Caroline D. Pham praised the DOJ's policy (discussed above) "ending the practice of regulation by prosecution that has targeted the digital asset industry in recent years," and directed CFTC staff to comply with the President's executive orders and administration policy, in line with the DOJ's digital assets enforcement priorities and charging considerations. Acting Chair Pham directed CFTC staff to de-prioritize actions involving violations of registration requirements under the Commodity Exchange Act unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully and to not take any litigating position or arguments that do not comply with the President's executive orders, administration policy, or DOJ policy on digital assets enforcement priorities and digital assets charging considerations.

The CFTC's press release can be found here.

SDNY Prosecutors Continue to Pursue Case Against Terraform Founder, Do Kwon, Despite the April 2025 DOJ Digital Assets Memorandum

On April 10, 2025, at a conference in the ongoing criminal case against Terraform founder Do Kwon, a prosecutor for the U.S. Attorney's Office for the Southern District of New York told U.S. District Judge Paul A. Engelmayer that the April 2025 DOJ Digital Assets Memorandum disbanding the DOJ's crypto unit (described above) would not impact the charges against Kwon. Kwon has pled not guilty to an indictment charging him with siphoning billions from customers and investors who backed his crypto platform. As alleged, Kwon engaged in multiple schemes to deceive investors in order to fraudulently inflate the value of Terraform's cryptocurrencies. Kwon is charged with commodities fraud, securities fraud, wire fraud, conspiracy to commit commodities fraud, securities fraud, wire fraud and money laundering conspiracy.

Reporting on the hearing can be found here and further information relating to the charges against Do Kwon can be found here.

Samourai Wallet Urges Federal Prosecutors to Drop Charges Following the April 2025 DOJ Digital Assets Memorandum

On April 28, 2025, in a letter submitted by counsel for Keonne Rodriguez and William Hill, the Chief Executive Officer and Chief Technology Officer of Samourai Wallet, a cryptocurrency mixing service, the prosecution and defendants submitted a joint request for a continuance of the pretrial motions schedule in the ongoing litigation by 16 days. The request referred to the recent DOJ memo which outlined the DOJ's new policies on prosecutions involving digital assets. On April 10, 2025, the defendants wrote to the Acting U.S. Attorney for the Southern District of New York requesting the dismissal of the superseding indictment under the Blanche Memo. In the letter, the defendants noted that a continuance of the pretrial motions schedule is warranted to "permit Defendants to avoid the significant expense of preparing their motions while the Government determines its position in response to the Defendants' letter." Without expressing any views on the merits of the defendants' letter, the government agreed to the adjournment.

The letter can be found here and further information can be found here.

Key Developments

California Introduces 'Bitcoin Rights' in Amended Digital Assets Bill

On March 28, 2025, California's Assembly Bill 1052 (which was introduced as the Money Transmission Act on February 20, 2025) was amended by Democrat and Chair of the California Assembly's Banking and Finance Committee Avelino Valencia. The amendments included Bitcoin and other crypto-related investor protections as well as removing the term "Money Transmission Act" and renaming the legislation to "Digital Assets." The Banking and Finance Committee held a hearing on the Bill on April 21, 2025. If enacted, the Bill seeks to authorize individuals and businesses in California to accept digital financial assets as payment for goods and services, prohibit public entities from restricting use of or taxing digital assets, and prohibit restrictions on restricting or imposing any requirements on the use of hardware to control digital financial assets.

The Bill can be found here and details of the Banking and Finance Committee hearing can be found here.

Senator Warren Calls for SEC Watchdog Investigation into Whether Agency Actions Were Influenced by Trump Administration's Crypto Conflicts of Interest

On April 3, 2025, U.S. Senator Elizabeth Warren (D-MA), Ranking Member of the Senate Banking, Housing, and Urban Affairs Committee, wrote to the U.S. Securities and Exchange Commission's (SEC) Office of Inspector General (OIG), Deborah Jeffrey, calling for an investigation into whether Trump administration officials, including those with direct ties to the President's family and business partners, may have improperly influenced SEC enforcement and regulatory decisions on cryptocurrency.

Senator Warren's press release, including the text of the letter, can be found here.

New York Attorney General James Urges Congress to Pass Federal Legislation to Regulate Cryptocurrencies

On April 8, 2025, New York Attorney General Letitia James sent a letter to congressional leaders urging them to pass federal legislation to strengthen regulations on cryptocurrencies and digital assets. In her letter, Attorney General James warned that the lack of strong federal regulations on cryptocurrencies increases the risk of fraud, criminal activity and financial instability. Attorney General James further argued that federal regulations would bolster America's national security, strengthen its financial markets and protect investors from cryptocurrency scams.

The Attorney General's press release can be found here and the letter can be found here.

SEC's Division of Corporation Finance Provides Guidance on Offerings and Registrations of Securities in the Crypto Asset Markets

On April 10, 2025, the SEC's Division of Corporation Finance issued a statement about the application of certain disclosure requirements under the federal securities laws to offerings and registrations of securities in the crypto asset markets. This guidance is intended to build on the SEC's Crypto Task Force, which is seeking to "develop a comprehensive and clear regulatory framework for crypto assets, including addressing applicable registration and disclosure requirement." The statement confirmed that in the context of offerings and registrations of securities in the crypto asset markets, the content and scope of an issuer's disclosure will depend on the nature of the security and the issuer's business, and may include factors that address the development and implementation of the issuer's business and the particular characteristics of the security, including "its features, price volatility, limited rights of holders, valuation and liquidity risks, technological risks, cybersecurity risks, business, operational, and network risks, and legal and regulatory risks." Furthermore, the statement noted that if the issuer's business involves crypto assets that themselves are not securities, such crypto assets may nevertheless be relevant to the section of the registration or offering statement discussing the issuer's business if material.

The SEC's statement can be found here.

SEC's Crypto Task Force Hosts Roundtables on Crypto Trading and Crypto Custody

On April 11, 2025, the SEC Crypto Task Force hosted a roundtable titled "Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading." The roundtable was part of the SEC Crypto Task Force's ongoing series discussing crypto asset regulation. Mark Uyeda, acting Chairman of the SEC, stated that "a time-limited, conditional exemptive relief framework for registrants and non-registrants could allow for greater innovation with blockchain technology within the United States in the near term." On April 25, 2025, the SEC hosted a roundtable on "Know your Custodian: Key Considerations for Crypto Custody" and on May 12, 2025, there will be a further roundtable discussing "Tokenization: Moving Assets Onchain: Where TradFi and DeFi Meet."

The SEC's upcoming events can be found here and acting Chairman Uyeda's remarks can be found here.

Binance Acting as Adviser to Several Countries on Crypto Regulations and Bitcoin Reserves

On April 17, 2025, the Financial Times reported that Binance is "advising several countries on creating their own digital assets regulations and establishing national strategic bitcoin reserves." Richard Teng, Binance's CEO, told the Financial Times that the more "crypto-friendly approach" under President Trump was "spurring other countries into taking similar action." Teng further noted that Binance had been approached by numerous countries to assist in formulating a regulatory framework to govern crypto. The article further reported that both Pakistan and Kyrgyzstan had announced that Binance's former Chief Executive Officer, Changpeng Zhao, had been advising them on developing crypto regulations.

The article can be found here.

Paul Atkins Sworn in as SEC Chairman

On April 22, 2025, Paul Atkins was sworn in as 34th Chairman of the SEC. Chairman Atkins was nominated by President Donald Trump on January 20, 2025, and confirmed by the U.S. Senate on April 9, 2025. Atkins said that he was pleased to join the SEC to "advance its mission to facilitate capital formation; maintain fair, orderly, and efficient markets; and protect investors."

The SEC's press release can be found here.

SEC's Chairman Paul Atkins Provides Remarks at Crypto Task Force Roundtable

On April 25, 2025, SEC Chairman Paul S. Atkins spoke at the third roundtable of the SEC's crypto task force, stating that he was "eager to tackle long festering issues, such as regulatory treatment of digital assets and distributed ledger technologies". He further stated that he is looking forward to "engaging with market participants and working with colleagues in President Trump's administration and Congress to establish a rational, fit-for-purpose regulatory framework for crypto assets."

Chairman Atkins' remarks can be found here.

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