The digital asset ecosystem is entering a defining period—where legislative clarity, regulatory nuance, and litigation risk are converging. As crypto markets stabilize following years of enforcement-heavy scrutiny, U.S. regulators are offering more detailed guidance. New legislation and thoughtful statements from key regulators point toward a maturing legal environment—one that retains rigor while opening pathways for innovation. At the same time, market participants must navigate a shifting landscape marked by technological complexity, state-level litigation risks, and intensifying disclosure obligations.
This update provides a unified view of where the industry is now—from Congress and the SEC to private litigation—and what legal counsel should be preparing for next.
I. Legislative Momentum: The GENIUS and CLARITY Acts
Congress is poised to enact a pair of landmark bills that would reshape the regulatory perimeter for crypto:
- The GENIUS Act focuses on fiat-backed stablecoins, mandating full collateralization, disclosures, and reserve management. It formalizes stablecoin frameworks long advocated by the payments and fintech sectors.
- The CLARITY Act seeks to define when a token is a security and when it is a commodity—an effort to bring certainty to SEC/CFTC jurisdictional overlaps and reduce ambiguity in enforcement priorities.
Combined, these bills signal a foundational recalibration in U.S. crypto policy, marking the federal government's strongest move toward enabling mainstream adoption.
II. Tokenization Reality Check: Commissioner Peirce's July 2025 Statement
In a clear-eyed statement issued July 9, 2025, SEC Commissioner Hester M. Peirce addressed the increasing prevalence of tokenized securities, emphasizing that while the underlying technology may be novel, the applicable laws are not.
"Tokenized securities are still securities."
Commissioner Peirce's remarks underscore that market participants must adhere to existing securities law frameworks, regardless of whether the security is on-chain or off-chain. Key considerations include:
- Issuer structure and disclosure: Whether tokenization is performed by the issuer or a third party materially affects risk exposure and compliance obligations.
- Legal nature of the token: Depending on how tokenization is structured, the asset may be considered a receipt for a security, a separate security, or even a security-based swap.
- Regulatory engagement: Peirce encourages market participants to proactively engage with SEC staff when novel structures warrant exemption requests or interpretive guidance.
The takeaway: while blockchain enables new efficiencies in capital markets, it does not nullify the federal securities laws. Counsel should ensure that tokenized offerings are thoroughly vetted under traditional legal standards.
III. ETP Disclosure Obligations: SEC Division of Corporation Finance's July 1, 2025 Guidance
In a detailed July 1 statement, the Division of Corporation Finance provided interpretive guidance for issuers of crypto asset exchange-traded products (ETPs)—spot- or derivative-based trusts that trade on national securities exchanges. The statement highlights best practices and staff expectations across a range of disclosures required by the Securities Act and Exchange Act.
Key areas of emphasis include:
- Cover Page & Summary: Initial offering price, authorized participants, and material features of the trust must be clearly disclosed using plain language.
- Risk Factors: Tailored disclosures are required around volatility, network attacks, manipulation, regulatory risk, and operational failures—generic language is discouraged.
- Description of Business & NAV Methodology: Issuers must describe the crypto assets held, index or benchmark construction, calculation of NAV, and pricing methodologies, including any divergence from GAAP.
- Custody & Service Providers: Disclosures around custody arrangements, private key management, insurance coverage, sponsor fees, and AP contracts are expected in detail.
- Conflicts of Interest: Sponsors must disclose any crypto asset holdings, related-party relationships, and internal compliance measures like trading pre-clearance protocols.
- Financial Statements: For multi-series ETPs, both the trust and each series may require standalone financial statements and separate assessments under Regulation S-X.
This is the most comprehensive statement to date on ETP-related filings. Issuers and their counsel should treat the Division's guidance as a blueprint for new filings and ongoing compliance.
IV. Litigation Watch: State-Level Claims Rise as Federal Enforcement Plateaus
Even as SEC and DOJ actions stabilize, the litigation spotlight has shifted to consumer protection laws at the state level. Recent cases—such as Rojas v. Kelsier Ventures LLC—demonstrate that plaintiffs are avoiding securities law hurdles by bringing claims under unfair trade practices, deceptive conduct statutes, and common law fraud.
Implications include:
- Erosion of federal procedural protections (e.g., discovery stays under the PSLRA)
- Jurisdictional fragmentation and inconsistent outcomes across state courts
- Expansion of liability theories not grounded in securities doctrines
For counsel, this trend requires dual-track readiness: defending on securities law merits while preparing for broader consumer and misrepresentation claims.
Conclusion: Regulatory Rationalization, But Risk Isn't Going Away
The U.S. crypto regulatory framework is coalescing—but not consolidating. For firms operating in the digital asset space, 2025 presents a paradox: greater legal clarity, but more complexity.
To thrive in this environment, legal teams should:
- Stay vigilant on disclosure obligations for tokenized assets and crypto ETPs
- Engage proactively with regulators on novel structures or products
- Monitor litigation dockets for emerging state-level risks
- Tailor compliance and governance frameworks to anticipate scrutiny beyond the SEC
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
