Blockchain and Digital Assets News and Trends – August 2025

Banking regulators

• Federal Reserve announces end of bank cryptocurrency activities supervisory program. On August 15, the Federal Reserve Board announced it will sunset its “novel activities supervision program” and return to monitoring banks’ novel activities through the normal supervisory process, including those activities related to cryptoassets, distributed ledger technology, and partnerships with nonbanks to deliver financial services to customers. The announcement rescinded the Federal Reserve’s 2023 supervisory letter that created the program.

• FinCEN convenes public-private partnership to promote innovation and address fraud and scam risks in the digital assets ecosystem. On August 6, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced it brought together Treasury components, law enforcement agencies, financial institutions, regulatory technology companies, and trade groups to share insights on driving innovation in the digital assets ecosystem while protecting consumers from emerging fraud and scam threats. The FinCEN Exchange event, titled “Advancing Digital Assets Innovation While Safeguarding Consumers Against Fraud and Scam Risks,” featured comprehensive discussions on industry trends in innovation, developments in fraud and scam prevention, law enforcement’s active role in deterring financial crimes facilitated by the illicit use of digital assets, and compliance best practices in the digital assets ecosystem.

• FinCEN warns use of crypto kiosks for scams and illegal activity. On August 4, FinCEN announced the issuance of a notice urging financial institution vigilance in identifying and reporting suspicious activity involving convertible virtual currency kiosks, notably if kiosk operators fail to meet their obligations under the Bank Secrecy Act (BSA). The notice describes how such kiosks are used to facilitate scams, fraud, and money laundering, and sets forth red flag indicators of illicit activity involving crypto kiosks.

• FinCEN postpones and reopens AML/CFT investment adviser rule. On July 21, FinCEN announced the postponement of the effective date of the final rule establishing Anti-Money Laundering/Countering the Financing of Terrorism Program and Suspicious Activity Report Filing Requirements for Registered Investment Advisers and Exempt Reporting Advisers (IA AML Rule). The IA AML Rule was originally set to take effect on January 1, 2026, but FinCEN anticipates delaying the effective date until January 1, 2028. Additionally, FinCEN announced that it would revisit the scope of the IA AML Rule through a future rulemaking process – essentially, to tailor it “to the diverse business models and risk profiles of the investment adviser sector.”

• Credit union trade association seeks rulemaking on custody of digital assets. On July 18, America’s Credit Unions, a national credit union trade association, wrote a letter to the Chair of the National Credit Union Administration (NCUA), requesting that the NCUA “promptly initiate rulemaking to allow credit unions to take custody of digital assets for their members.” America’s Credit Unions asserted that the recently enacted GENIUS Act provided a clear mandate to advance the ability of credit unions to be able to directly safeguard members’ digital assets, noting that banks have had a competitive advantage due to bank guidance on cryptocurrency since 2021.

SEC

• SEC Division of Corporation Finance issues guidance on liquid staking. On August 5, the SEC Division of Corporation Finance issued a statement addressing the regulatory treatment of liquid staking activities, which the statement refers to as a type of staking whereby owners of crypto assets deposit their assets with a third-party service provider and in return receive newly “minted” (or created) crypto assets that evidence ownership of the deposited assets and any staking rewards, like a deposit receipt. The Division takes the position that when owners of crypto assets deposit them with a third-party liquid staking provider and receive staking receipt tokens in return, these activities do not constitute securities offerings under US law, provided the arrangements remain administrative and ministerial in nature. According to the Division, the value of these receipt tokens derives from the underlying assets rather than from the managerial or entrepreneurial efforts of the provider. The statement applies the Howey test to determine that such liquid staking arrangements do not involve investment contracts or securities transactions, unless the underlying assets themselves are part of an investment contract. Accordingly, staking providers and participants do not need to register these transactions with the SEC, as long as their activities conform to the Division’s view of Liquid Staking Activities and do not extend beyond administrative functions.

• SEC Chair reveals “Project Crypto” to modernize US digital asset regulation. On July 31, the US Securities and Exchange Commission (SEC) Chair Paul S. Atkins published remarks announcing an initiative called “Project Crypto,” which he described as “the SEC’s north star in aiding President Trump in his efforts to make America the ‘crypto capital of the world.’” Chair Atkins discussed his goal to create clear, practical rules for crypto asset distributions, custody, and trading. Under Project Crypto, the SEC will develop guidelines to distinguish between digital collectibles, commodities, stablecoins, and securities, and will facilitate the “onshoring” of crypto businesses previously driven offshore by regulatory uncertainty. The SEC plans to modernize custody requirements, enable trading of both security and non-security crypto assets on regulated platforms, and support the development of “super-apps” that offer a wide range of financial products under a single license. The initiative also seeks to accommodate decentralized finance and on-chain software systems, encourage innovation through exemptions for new business models, and ensure that regulatory frameworks do not stifle technological progress or competition in the US digital asset markets.

• SEC announces new series of crypto roundtables in several US cities. On August 1, the SEC announced that its Crypto Task Force would be hosting a series of roundtable discussions in cities across the US, following an earlier series of roundtables held in Washington, DC. The SEC expressed particular interest in inviting crypto-related projects with ten or fewer employees that are less than two years old.

• SEC approves in-kind creations and redemptions for crypto ETPs. On July 29, the SEC announced the approval of orders permitting in-kind creations and redemptions for crypto asset exchange-traded product (ETP) shares, including bitcoin and ether ETPs. This decision departs from previous limitations on spot bitcoin and ether ETPs, which required in-cash creations and redemptions. The change aims to make crypto ETPs more efficient and cost-effective for issuers, authorized participants, and investors. In a separately published statement, SEC Commissioner Mark Uyeda praised the orders for enabling “crypto-asset ETPs to access the tools for managing exposure more cheaply, more transparently, and with better alignment to how asset managers and investors use ETPs in other markets.” The SEC also announced approval of related proposals designed to “advance a merit-neutral approach to crypto-based products,” such as the listing and trading of mixed spot bitcoin and spot ether ETPs, options on certain spot bitcoin ETPs, Flexible Exchange options on bitcoin-based ETPs, and increased position limits for listed options on bitcoin ETPs. The SEC also announced the issuance of two scheduling orders soliciting comments on additional crypto ETP proposals. 

CFTC

• CFTC launches crypto sprint to advance digital asset market regulation. On August 1, the Commodity Futures Trading Commission (CFTC) announced the start of a crypto sprint to implement recommendations from the President’s Working Group on Digital Asset Markets report. Acting Chair Caroline D. Pham commented that the CFTC aims to provide regulatory clarity and foster innovation in the US digital asset markets, working closely with the SEC and other stakeholders. Since January, the CFTC has engaged with industry leaders, withdrawn outdated advisories, and issued new guidance to support crypto and digital asset entrepreneurs. The agency has also explored a digital asset markets pilot program, participated in tokenization initiatives, and completed a public comment period on 24/7 trading and perpetual derivatives, both of which are now live on CFTC-registered markets.

• CFTC launches initiative to enable spot crypto trading on regulated US exchanges. On August 4, the CFTC announced a new initiative to facilitate the trading of spot crypto asset contracts on CFTC-registered futures exchanges, known as designated contract markets (DCMs). The initiative seeks to provide regulatory clarity for listing spot crypto assets and invites public feedback by August 18. The move is part of the CFTC’s broader strategy to implement recommendations from the President’s Working Group on Digital Asset Markets and aligns with efforts to coordinate with the SEC on digital asset regulation. The CFTC emphasizes that the Commodity Exchange Act requires retail trading of commodities involving leverage, margin, or financing to occur on a DCM, and the agency now seeks input on listing spot crypto asset contracts under its existing authority, including considerations related to securities laws and the SEC’s framework for non-security digital assets. 

GSEs

• Fannie Mae and Freddie Mac ordered to prepare to count cryptocurrency as an asset on mortgage applications. On June 26, William Pulte, director of the Federal Housing Finance Agency, issued an order issuing directive for the agencies to consider cryptocurrency as an asset for single-family loans delivered to Fannie Mae and Freddie Mac. The order directed each agency to “prepare a proposal for consideration of cryptocurrency as an asset for reserves in their respective single-family mortgage loan risk assessments, without conversion of said cryptocurrency to US dollars.” The agencies were to consider only cryptocurrency that can be evidenced and stored on a US-regulated centralized exchange, subject to all applicable laws. Two consumer groups, the Consumer Federation of America and the National Consumer Law Center, have written Director Pulte to abandon the directive, arguing that cryptocurrencies “are notoriously volatile and offer no meaningful indication of a borrower’s long-term financial stability or ability to pay their mortgage…, expos[ing] taxpayers to increased risk of losses [and] open the door to new forms of predatory and unsafe lending targeted at vulnerable borrowers.”

Treasury

• FinCEN warns financial institutions of illicit activity involving virtual currency kiosks. On August 4, the US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a notice urging US financial institutions to monitor and report suspicious activity related to convertible virtual currency (CVC) kiosks, also known as cryptocurrency ATMs, which criminals increasingly use for scams, money laundering, and drug trafficking. The notice explains that CVC kiosks allow customers to exchange cash for virtual currencies such as bitcoin, ether, and stablecoins, and that scammers often direct victims to use these kiosks to send payments under false pretenses. FinCEN reports a sharp rise in fraud and losses involving CVC kiosks, with transnational criminal organizations using them to launder drug proceeds and evade traditional financial controls. The notice states non-compliant kiosk operators frequently fail to register as money services businesses, neglect AML obligations, and facilitate structuring and other illicit practices. FinCEN provides red-flag indicators for detecting suspicious CVC kiosk activity, reminds institutions of their BSA reporting requirements, and encourages information sharing to combat the growing threat of virtual currency-related financial crime.

• Treasury seeks comments on methods to detect illicit digital asset activity. On August 18, the US Department of the Treasury published a notice requesting public input on the use of innovative or novel methods, techniques, or strategies to detect and mitigate illicit finance risks involving digital assets. The notice fulfills a requirement of the GENIUS Act and supports the Trump Administration’s policy of supporting the responsible growth and use of digital assets, as outlined in the January 23 Executive Order 14178 on “Strengthening American Leadership in Digital Financial Technology.” Treasury seeks comment on the current or potential use of the following for such purposes: application programming interfaces, artificial intelligence (AI), digital identity verification, blockchain technology, and monitoring. Consistent with the GENIUS Act, when conducting research on these and other innovative or novel methods, techniques, or strategies, Treasury will evaluate and consider:

• Improvements in the ability of financial institutions to detect illicit activity involving digital assets
• Costs to regulated financial institutions
• The amount and sensitivity of information that is collected or reviewed
• Privacy risk associated with the information that is collected or reviewed
• Operational challenges and efficiency considerations
• Cybersecurity risks, and
• Effectiveness of the methods, techniques, or strategies at mitigating illicit finance.

Comments are due on or before October 17.

STATE DEVELOPMENTS

Money transmission

• State financial regulators issue guidance on virtual currency treatment under MTMA. On June 26, the Conference of State Bank Supervisors (CSBS) announced its issuance of advisory guidance on the treatment of virtual currency when calculating a licensee’s tangible net worth under the Money Transmission Modernization Act (MTMA). State supervisors and industry experts developed the MTMA to create a consistent set of nationwide standards for tangible net worth (capital), surety bond, permissible investment (liquidity with 1-for-1 reserves), and other requirements applicable to the regulation and supervision of money transmitters. The new guidance is the first issued by the CSBS and is limited to the implementation of Sections 2.01(bb) and 10.01 regarding the tangible net worth of licensees.

• Pennsylvania modifies money transmission law to address virtual currency. On June 27, Pennsylvania Governor Josh Shapiro signed Senate Bill 202 into law, which ensures that the transmission of virtual currency is regulated the same as fiat currency under Pennsylvania’s Money Transmitter Act (MTA). Under the new law, referred to as the Money Transmission and Virtual Currency Transmission Business Licensing Law, entities that facilitate the transfer of virtual currency for a fee will be required to meet the same licensure standards as other money transmitters. The law also modernizes key elements of the MTA, including definitions, licensing requirements, exemptions, and oversight provisions.

ENFORCEMENT ACTIONS AND LITIGATION

FEDERAL

SEC

• SEC issues cease-and-desist order against MyConstant founder for fraudulent crypto-backed lending scheme. On August 5, the SEC issued an order settling charges against Huynh Tran Quang Duy, founder and sole owner of the online lending platform MyConstant, for making material misrepresentations and misappropriating investor funds in connection with crypto-backed loans. The SEC found that from September 2020 through November 2022, Duy falsely promoted MyConstant’s loan matching service as a low-risk, crypto-collateralized investment offering returns up to 10 percent per annum. According to the order, MyConstant raised over $20 million from more than 4,000 investors, most of whom resided in the US and used investor funds to purchase at least $11.9 million of the cryptocurrency TerraUSD (UST) in personal accounts – resulting in losses of nearly $8 million when UST collapsed. Duy further diverted approximately $415,000 for personal use. The order requires Duy to cease and desist from further violations, pay over $8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $750,000 civil penalty. 

DOJ

• Crypto influencer sentenced for defrauding cloud computing providers in cryptojacking scheme. On August 15, the US Attorney’s Office for the Eastern District of New York announced that Charles O. Parks III, also known as “CP3O,” received a sentence of one year and one day in prison for orchestrating a large-scale cryptojacking operation. Parks used fraudulent identities and false statements to obtain over $3.5 million in cloud computing services from two major providers, which he exploited to mine nearly $1 million in cryptocurrency, including Ether, Litecoin, and Monero. He laundered the proceeds through cryptocurrency exchanges, an NFT marketplace, and traditional financial channels, then converted the digital assets into cash for luxury goods. Parks promoted himself as a crypto influencer on social media, boasting about his illicit profits and offering advice based on his fraudulent activities. The court ordered him to forfeit $500,000 and a luxury car, with restitution to be determined later.

• CEO indicted for misappropriating startup funds in cryptocurrency and online gambling scheme. On August 13, the US Attorney’s Office for the Southern District of New York announced the indictment of Richard Kim, former CEO of Zero Edge Corporation, for defrauding investors of approximately $4.3 million by falsely promising to develop a blockchain-based casino gaming app. Kim founded Zero Edge in March and represented to investors that their funds would support the development of on-chain casino games using blockchain and cryptocurrency technologies. Instead, Kim diverted about $3.8 million of the seed round funding into personal cryptocurrency accounts at multiple centralized exchanges and transferred significant amounts to another online crypto casino and other unknown wallets. Kim admitted to investors that he lost nearly all the company’s money through leveraged cryptocurrency trading and gambling and later acknowledged to the Federal Bureau of Investigation (FBI) that his actions were “completely unjustifiable.” The indictment charges Kim with securities fraud and wire fraud, each carrying a maximum sentence of 20 years in prison.

• Estonian nationals sentenced for $577 million cryptocurrency Ponzi scheme. On August 12, the US Attorney’s Office for the Western District of Washington announced that two Estonian nationals, Sergei Potapenko and Ivan Turogin, received 16-month prison sentences for orchestrating a global cryptocurrency Ponzi scheme through their company, HashFlare. Between 2015 and 2019, HashFlare sold contracts to customers worldwide, falsely promising profits from cryptocurrency mining, while lacking the computing capacity to generate the claimed returns. Potapenko and Turogin collected over $577 million from victims and used the funds to acquire luxury vehicles, real estate, and pay out earlier investors. Authorities seized assets valued at over $450 million, including cryptocurrency, real property, and mining equipment, which will be used to compensate victims through a forthcoming remission process. The case involved significant international cooperation. Despite the sentences, DOJ had argued for longer prison terms and is considering an appeal.

• Terraform Labs co-founder Do Kwon pleads guilty to cryptocurrency fraud. On August 12, the US Attorney’s Office for the Southern District of New York announced that Do Kwon, co-founder and former CEO of Terraform Labs, had pled guilty to multiple counts of fraud related to the collapse of the Terra blockchain ecosystem, which resulted in over $40 billion in investor losses. Kwon admitted to conspiring to commit commodities fraud, securities fraud, and wire fraud, as well as executing wire fraud, all in connection with Terraform’s suite of digital asset products, including the algorithmic stablecoin TerraUSD (UST) and the LUNA token. Prosecutors described how Kwon misrepresented the stability and functionality of Terraform’s blockchain technology, manipulated markets to artificially support UST’s $1 peg, and falsely claimed real-world adoption of the Terra blockchain for payment processing. Kwon also controlled and misused the Luna Foundation Guard’s cryptocurrency reserves and manipulated synthetic asset prices on Terra’s Mirror Protocol, despite claiming that the DeFi platform was decentralized. As part of his plea, Kwon agreed to forfeit over $19 million in proceeds and faces up to 25 years in prison, with sentencing scheduled for December 11.

• Samourai Wallet founders plead guilty to laundering over $200 million in cryptocurrency. On August 6, the US Attorney’s Office for the Southern District of New York announced that Keonne Rodriguez and William Lonergan Hill, the CEO and CTO of Samourai Wallet, pled guilty to operating a money transmitting business that processed more than $200 million in criminal proceeds using cryptocurrency. Rodriguez and Hill developed and managed Samourai Wallet, a mobile application that provided two key services: (1) Whirlpool, a Bitcoin mixing service, and (2) Ricochet, a transaction obfuscation tool. Both were designed to conceal the origins and destinations of digital assets. The founders promoted these services to facilitate the laundering of funds from illegal activities, including dark web transactions, cyber intrusions, and fraud schemes, and actively encouraged criminals to use their platform. From 2017 to 2019, over 80,000 Bitcoin, valued at more than $2 billion at the time, passed through these services, generating over $6 million in fees for Samourai. Rodriguez and Hill each face a maximum sentence of five years in prison and agreed to forfeit more than $237 million as part of their plea agreements.

• Cryptocurrency CEO sentenced to seven years for multi-million-dollar fraud. On July 29, the US Attorney’s Office for the Northern District of California announced that Rowland Marcus Andrade, founder and CEO of AML Bitcoin, received an 84-month federal prison sentence for wire fraud and money laundering related to a fraudulent cryptocurrency scheme. Andrade misled investors by making false claims about the development, viability, and business prospects of AML Bitcoin, including fabricating a potential agreement with the Panama Canal Authority. He raised approximately $10 million from investors, diverted over $2 million for personal use – including luxury cars and Texas real estate – and laundered funds through multiple bank accounts.

• Arizona man pleads guilty to laundering cryptocurrency in $13 million Ponzi scheme. On July 28, DOJ announced that Vincent Anthony Mazzotta Jr. pleaded guilty to money laundering and conspiracy to obstruct justice for his role in a $13 million cryptocurrency Ponzi scheme. Mazzotta, along with co-defendant David Saffron, promised investors high-yield returns from cryptocurrency trading using automated trading robots powered by AI, operating through companies such as Mind Capital and Cloud9Capital. The conspirators created a fictitious government entity, the Federal Crypto Reserve, to further deceive victims and solicit additional funds under the pretense of investigating the disappearance of their investments. Mazzotta also worked with others to destroy evidence and falsify business records to conceal his involvement. He faces up to ten years in prison for money laundering, and up to five years for conspiracy to obstruct justice.

• DOJ seeks forfeiture of $7.1 million in cryptocurrency linked to oil and gas investment fraud. On July 22, the US Attorney’s Office for the Western District of Washington announced a civil action to forfeit approximately $7.1 million in cryptocurrency seized during an investigation into an oil and gas storage investment fraud scheme. The scheme, which operated from at least August 2022 through August 2024, defrauded victims of about $17.9 million by convincing them to invest in purported oil tank storage opportunities, then moving the funds through various financial and cryptocurrency accounts. The perpetrators used cryptocurrencies such as Bitcoin, Tether, USD Coin, and Ether, transferring assets through at least 19 different cryptocurrency accounts, and ultimately moving much of the funds to a centralized exchange. Investigators traced the cryptocurrency to wallets and exchanges associated with Russian and Nigerian IP addresses, some of which have connections to money laundering for transnational criminal organizations. The government intends to distribute the forfeited cryptocurrency, in addition to $2.3 million previously seized from a US-based co-conspirator, to the identified victims of the fraud. 

FINRA

• FINRA fines firm for violations of crypto rules. On July 28, the Financial Industry Regulatory Authority (FINRA) accepted the Letter of Acceptance, Waiver, and Consent (AWC) submitted by TradeStation Securities, Inc., an online trading platform and a FINRA member. The AWC settles alleged rule violations concerning retail communications related to crypto assets. According to the AWC, the firm’s communications allegedly failed to clearly disclose that crypto assets were not offered through a registered broker-dealer, and also allegedly failed to provide a fair and balanced presentation of the benefits and risks of the crypto asset products. TradeStation Securities agreed to pay an $85,000 fine, without admission or denial of FINRA’s allegations. 

Money transmission

• Connecticut man admits operating illegal money transmitting business. On July 21, the US Attorney’s Office for the District of Connecticut announced that William McNeilly pleaded guilty to charges related to his operation of an unlicensed money transmitting business. McNeilly owned and operated Global Income Marketplace LLC and Global NuMedia LLC (GNM) and opened a cryptocurrency exchange account in the name of GNM – exchanging more than $1 million worth of customers’ cash, checks, and money orders for cryptocurrency. McNeilly never obtained the necessary money transmission license from the Connecticut Department of Banking. McNeilly faces a maximum prison term of 35 years on the charges. 

FTC

• Former CEO of Voyager Digital agrees to ban and a $2.8 million payment to resolve FTC charges. On June 27, the Federal Trade Commission (FTC) announced a proposed settlement with Stephen Ehrlich, the former CEO of crypto platform Voyager Digital, on charges that Ehrlich falsely promised that consumers’ deposits were FDIC-insured, and those deposits “would be as sage with us as at a bank.” Nonetheless, the deposits were not insured, and Voyager customers lost more than $1 billion in cryptocurrency when the company failed. The proposed settlement requires Ehrlich to pay $2.8 million and prohibits Ehrlich from marketing or selling retail products or services used to buy, sell, deposit, or trade crypto, among other activities. The FTC previously settled with Voyager in November 2023.  

NFTs

• NFTs can be trademarked. In Yuga Labs, Inc. v. Ryder Ripps; Jeremy Cahen (No. 24-879 DC No. 2:22-cv-04355-JFW-JEM, 9th Cir. Ct. App., July 23, 2025), the Ninth Circuit ruled that NFTs can be trademarked under the Lanham Act as they are considered “goods.” The court affirmed in part and reversed in part the district court’s judgment, and remanded the case for further proceedings, in an action under the Lanham Act and the Anticybersquatting Consumer Protection Act.

  The case concerns the popular Bored Ape Yacht Club (BAYC) NFT collection, created by plaintiff, Yuga Labs. Each BAYC NFT is associated with a unique cartoon Bored Ape. BAYC NFT owners obtain not only certain rights to the art, but also a collection of benefits and functionalities, including access to interactive digital spaces, branded merchandise, and online events. Defendants created a nearly identical NFT collection called Ryder Ripps Bored Ape Yacht Club. NFTs in defendants’ collection were associated with the exact same cartoons as BAYC NFTs.

  Yuga sued defendants in the US District Court for the Central District of California, asserting a variety of claims, including trademark infringement under the federal Lanham Act. Defendants asserted numerous defenses, including that Yuga lacks enforceable trademark rights and that use of Yuga’s marks was protected as nominative fair use and under the First Amendment. Defendants also countersued, including for violation of the Digital Millennium Copyright Act, alleging that Yuga made misrepresentations in certain takedown notices to third-party platforms.

  The district court dismissed defendants’ declaratory judgment counterclaims for lack of subject matter jurisdiction and granted summary judgment for Yuga on its two claims and on defendants’ DMCA counterclaim. The district court then held a bench trial on remedies, enjoined defendants from infringing Yuga’s marks, and awarded Yuga over $8M for disgorgement of profits, statutory damages, attorneys’ fees, and costs.

  On appeal, the Ninth Circuit reversed the district court’s grant of summary judgment for Yuga on its Lanham Act claims. The court rejected defendants’ arguments that Yuga lacked ownership in protectable marks, finding that NFTs are “goods” protected by the Lanham Act, and rejected defendants’ argument that Yuga no longer has ownership of the marks by virtue of conferring ownership of associated art to NFT holders. The court reasoned that such ownership of art did not convey a license to a trademark embodied therein, nor did holders’ use or ownership of NFTs suggest that the incorporated marks act as a source identifier for each holder.

  The court also rejected as a matter of law that defendants could show a nominative fair use, as they used the mark to refer to Yuga’s NFTs (rather than their own NFTs). The court also rejected defendants’ First Amendment argument, holding that defendants used Yuga’s marks as source identification, not protected expression.

  On the multi-factor test for likelihood of confusion, the court held triable issues of fact remained and remanded the case for further proceedings. 

SPOTLIGHT ON INTERNATIONAL DEVELOPMENTS

• UK HM Treasury issues cryptoassets threat assessment. On July 21, the UK HM Treasury Office of Financial Sanctions Implementation (OFSI) published a Cryptoassets Threat Assessment, addressing threats to UK financial sanctions compliance from January 2022 to May 2025. OFSI’s “key judgements” from the report include:

• It is “almost certain” that UK cryptoasset firms “under-reported suspected breaches of financial sanctions to OFSI”
• It is “likely” that most non-compliance by UK cryptoasset firms has occurred inadvertently due to common issues such as suspected breaches being identified after a delay in attribution, with attribution delays also contributing to failures to implement an asset freeze
• It is “highly likely” that UK cryptoasset firms have been directly or indirectly exposed to the designated Russian exchange Garantex since its designation in 2023, resulting in breaches of UK financial sanctions
• It is “highly likely” that UK-based cryptoasset firms are currently at risk of being targeted by DPRK-linked hackers and IT workers seeking to steal or obtain funds through illicit means
• It is “likely” that UK cryptoasset firms are currently facilitating transfers to Iranian cryptoasset firms with suspected links to designated persons

• Hong Kong publishes regulations for stablecoin issuers. On July 29, the Hong Kong Monetary Authority (HKMA) announced publication of documentation for the implementation of the regulatory regime for stablecoin issuers, which took effect on August 1. The documentation comprises guidance on supervision of licensed stablecoin issuers, transitional provisions for pre-existing stablecoin issuers, and compliance with AML and CFT. 

DLA PIPER NEWS

• The Financial Times recognizes DLA Piper as one of the Most Innovative Law Firms in North America.
• The Legal 500 ranks DLA Piper Tier 1 in FinTech: Crypto. DLA Piper was also ranked in Tier 2 for FinTech, and Margo Tank was ranked as a “Leading Individual.”
• Chambers FinTech Legal ranks DLA Piper in four categories including Band 2 for Blockchain and Digital Assets, and Band 3 for Payments and Lending, with Margo Tank individually recognized in Blockchain and Digital Assets and Payments and Lending.
• DLA Piper’s Commodities, Digital Assets, and Carbon Compliance and Enforcement team draws on decades of collective experience in the commodities and securities industry to help companies navigate new and complex commodities enforcement matters, including those related to agriculture, metals, energy, digital assets, and carbon/sustainable commodities, among others.

RECENT AND UPCOMING EVENTS

• Era Anagnosti will moderate a panel discussion on Crypto Treasury Strategies: What You Should Know on September 18, at 12pm EST, hosted by Deal Flow Events. The panel will discuss treasury strategies regarding various types of digital assets, including objectives and key considerations, measuring performance, deal structures, capital formation, regulatory and governance considerations, microcaps and exchange-traded funds (ETFs).

PUBLICATIONS

• DLA Piper published its global financial services report, Financial Futures: Disruption in US and Global Financial Services, after asking nearly 800 financial services decision-makers around the world about key disruptors impacting senior leaders in financial institutions and fintechs. Access our report and read about the challenges and opportunities that AI; digitization; and environmental, social and governance (ESG) pose for the financial services industry.
• In the book, Banking [on] Blockchain: A Legal and Regulatory Primer, published by the American Bar Association, David Stier, Emily Honsa Hicks, and Eric Hall co-authored a chapter on anti-money laundering (AML)/know your customer (KYC) requirements and the Bank Secrecy Act (BSA), as well as provided general editorial assistance on other chapters. The book is a comprehensive guide to the legal and regulatory landscape surrounding the use of blockchain technology, decentralization, and digital assets within the financial services, and offers guidance on how financial institutions may navigate the complex regulatory environment.
• Cryptocurrency and Digital Asset Regulation, published by the American Bar Association and co-edited by Deborah Meshulam and Michael Fluhr, includes chapters by Meshulam, Fluhr, and Margo Tank.

LISTEN

Digital Transformation – The never-ending journey. Digital transformation is more than a trend – it’s a continuous journey. Our Tech Index 2024 looks at the rise of blockchain to the advancements in AI and the potential of quantum computing – the evolution never stops. Organizations are encouraged to adapt and lead the way in this ever-changing landscape. Mark O’Conor, Paul Allen, and Chloe Forster take a deep dive into digital transformation.

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Digital Digest addresses the growing challenges faced by the UK commercial and financial sector due to the increasing number of laws, regulations, and market practices affecting the digital and crypto industry.

Contacts

Learn more about our Blockchain and Digital Assets practice by contacting any of our editors:

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