Uncategorized
SEC Commissioner Hester Peirce on the New Crypto Task Force

SEC Commissioner Hester Peirce, the newly named head of the regulator’s crypto task force, has long been a proponent of the crypto industry as one of the Republicans overseeing the federal securities regulator. She discussed her approach with CoinDesk in late February.
You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.
‘Right the ship’
The narrative
SEC Commissioner Hester Peirce spoke with CoinDesk on Feb. 28, 2025, hours before U.S. President Donald Trump announced his White House crypto summit.
Why it matters
The U.S. Securities and Exchange Commission is one of the key regulators overseeing the crypto sector in the country, and has been the source of much ire. Peirce, who has served as a commissioner since 2018, is now looking to change the regulator’s approach to the entire industry. As part of this, the SEC is hosting an event on crypto policy on March 21.
Breaking it down
Just to get right into it, obviously, it’s been, I think, an eventful five weeks now, give or take, since President Donald Trump took the oath of office and resumed his presidency. The big thing in your world is the new crypto task force that you’re heading up, as far as the crypto industry is concerned. And just to begin with, I was hoping you could maybe walk through what you’ve seen and done and heard so far, and then where you expect this to go.
Yeah, let me start by giving you my standard disclaimer, which is that my views are my own views as a commissioner, not necessarily those of the SEC or my fellow commissioners. So I think it has been an exciting five weeks, and I think it was great that Chairman [Mark] Uyeda kicked off the task force, and decided to give us the ability to think about a lot of these issues in a holistic way. And so that’s exactly what we’re trying to do. I think we have been able to get a lot done already, which I’m happy about. It’s a great team, a lot of really smart people who are working very hard. And so I think the goal is to try to think about what we can just carve out and say to people, «this isn’t in our jurisdiction.» Congress, if you want to put it in our jurisdiction, that’s fine, but it’s not there.
And then with the stuff that’s in our jurisdiction, what can we do in the short term to provide some clarity or a path forward for people so that they’re not feeling that they can’t do anything out of fear that it might be within our space. So let’s provide some clear roads forward.
Those might be temporary, just bridging the gap until there’s legislation or regulation, and then trying to grapple with some of those longer term issues around tokenization of securities, around what does it look like for a broker dealer or a trading platform that’s trying to have securities alongside non-securities. Some of those more difficult issues will take some time to grapple with, and we’re trying to do all of this in a way that involves the public. We want people to be able to come in and talk to us. We want to get their suggestions for how to move forward and and and really get the best ideas and put those in place
Can you speak a bit to what you’re hearing, what kind of feedback you might have gotten already?
We’ve talked to people, and some people have started to respond. I haven’t been able to get through a lot of responses yet, but I think people are engaging seriously with what we’ve asked — the big list of questions was about 50 questions. What we’ve asked people is just respond to what [you can]. You can respond to everything if you want, but you definitely shouldn’t feel you have to respond to everything. And so I think we’re going to get some really thoughtful, very targeted responses.
Some people had already, not surprising, right? They’d already been thinking about how to move forward. So we’ve already gotten some comprehensive documents that sort of suggest how to move forward in general. And some of those are [responses] people have put out publicly. They haven’t prepared them specifically for us, but we’re looking at those kinds of things too, and we’re trying to figure out, how do we find the best ideas and and the most workable ideas and move forward with those.
Are there any areas in particular that Congress, in your view, you know, must address? Is it memecoins, is it something else, anything that the SEC, or even the SEC working with the CFTC, can’t, on their own, create a rule, or guidance for?
Well, I think they’re looking at stablecoin legislation, which I think is an area that definitely Congress has a role to play, and Congress always has a role to play, right? But I think that the market structure bills and the bills that are trying to put some clarity around what should be in our jurisdiction, what might be in the CFTC’s jurisdiction instead, could be helpful. So a lot of what is exciting about this technology is it allows for decentralization, and I think that’s what draws a lot of people to it. But as with most things, you see that people do sort of gravitate towards centralized entities. And so that would be something that I think we all need to pay attention to, because when you have centralized entities, you have the kinds of concerns that led people to want to decentralize.
You have risk of loss, risk of bad conduct by that centralized party, risk that the centralized party will treat some customers differently than others, those kinds of things. And so if you have trading platforms or other centralized intermediaries that are interacting with things that are not securities, then there is not necessarily a regulatory framework for those entities. If that’s the case, then Congress may decide that that’s something that they want to come in and write a framework for. And it seems that they do, because the bills that are out there do that. So I expect that we’ll see a lot more activity on that front this year in Congress.
Former CFTC Chair Timothy Massad said in congressional testimony, I want to say it was two or three days ago that he does not think Congress should get into market structure questions specifically. In your view, do you agree with that?
I didn’t see Chairman Massad’s commentary … I unfortunately haven’t had a chance to watch that yet, so I didn’t see his commentary. But again, I think that it’s good to have a conversation around where we need legislation and what we can do with our existing rules. He’ was chairman of the CFTC, so he has a good sense of what authority they already have.
Do you have maybe a specific timeline in mind for when the SEC could, through the work in the task force, start issuing more concrete guidance? I saw the staff statement yesterday, but anything more formal?
Well, fast is my goal. But as I said in the first statement I put out, people need to be patient too, because we want to get this. We want it. We want to do this well also. So I think we’ll just put stuff out piecemeal as it’s ready to go out, which is why you saw the memecoin statement go out. And I should emphasize that the task force is a great group of people. We’ve got really smart people there, but we are working with people across the SEC. And so you’ll see pieces coming out from different parts of the SEC. And you saw yesterday that the Division of Corporation Finance put out that statement on meme coins.
So switching tack just a little bit for a minute here, yesterday, we also saw the SEC file jointly with Coinbase to withdraw the ongoing case alleging just, I think it was a pure registrations violation claim. I know you probably can’t speak to any specific case, but could you speak a little bit to kind of the Division of Enforcement more broadly, and what we might expect, especially after the last week?
Yeah, I mean, I don’t know that I can speak to what you might expect, except to say that. And I think yesterday’s action really exemplifies this. We don’t want to use our enforcement division to write regulatory policy, and so we’re really trying to get back to using our enforcement division for its intended purpose, and letting the regulatory divisions do the hard work of figuring out how to craft rules, guidance, interpretations, and then enforcement has a rule after that, of course, to enforce the rules that are on the books. But this has just been an area where we’ve kind of gone about it backwards, and we’re trying to right the ship here.
In kind of the same vein, obviously the SEC filed to pause some of the cases against some of the companies that they’ve been litigating against. Some of those cases included fraud or related allegations. Do you expect these pauses to just kind of focus on just the pure registration/securities aspect of it, and then [they] might resume from there, or just any thoughts you might have on [that]?
We’ll assess every case on its facts and circumstances and figure out how to move forward. It’s always the goal to make sure that the policy is not being driven by the enforcement, but enforcement follows where policy is. There is certainly a role for enforcement, and there is a role for enforcement in some things related to crypto and we always have to ask the question, is there a securities violation here?
But if people are committing fraud and they’re thinking that this is a free pass to commit fraud, that’s just not the case. If we find a fraud and we don’t have authority to go after it, that’s something that we will look to find someone else who may have authority in that area, and send it their way. So I think this is really about using our resources most effectively, and that means that we can really save our enforcement resources for where there is bad conduct, as long as it’s within our jurisdiction.
So I should probably phrase this carefully, because again, I know you probably can’t speak to any specific cases, but a big one this week was against the Tron Foundation, and that case did have quite a few allegations of fraud and market manipulation. Is it possible that that’s something that you’re saying, maybe, the DOJ or another body might have kind of that greater authority, or the more relevant authority that you’re speaking of?
I can’t speak about individual cases, and we really do have to look at each case on its facts and circumstances. And there, there are a lot of cases that we have to look at. And so that’s what we’re doing.
Switching gears again. So Paul Atkins has been nominated to be the chair. Have you had a chance to speak with him about the last couple weeks?
Well, Chairman Atkins is focused, I think, on getting his hearing before the Senate and then getting confirmed. I think he’ll have plenty of time to engage with us, with the task force, with me, on these issues and others, but I’m trying to let him get through this part of the process. I know, having been through it myself, I know that it takes a lot of preparation, and there are a lot of other demands on his time right now.
Do you have any kind of expectation, just directionally speaking, what he might do with regard to crypto and some of these other issues that you’re now looking into or leading the charge on?
Well, I did work with Commissioner Atkins. I worked for him for four years, so I do know how he thinks about issues, and he definitely is someone who likes the law to be clear and then enforce. The goal is to get the law clear and then enforce it after it’s clear. So I suspect that some of the approaches that we’re taking will resonate with him and also as someone who is committed to due process, to thinking about notice and comment rulemaking, where that’s appropriate, to getting input from the people who will be affected. I think, again, some of the procedural decisions we’ve made about trying to get a lot of input from the outside, I suspect that’s something that will resonate with him. Then we’ll see when it comes down to what the individual, what does a good disclosure regime look like in this space. … Can we have some sort of safe harbor type of framework? Those are things that we’ll certainly talk with him about when he gets here.
I want to come back to the safe harbor aspect in a bit. But just one more question about Chairman Atkins. Before he was nominated, this was, I think, in February 2023, he gave an interview where he suggested that the Ripple case would be a good candidate to go up to the Supreme Court, because it could give a follow up on the Howey case. Just in your view, does that make sense? Is that something you would look forward to?
Well, again, I’m not going to speak about any particular case. The Howey Test has been around for a long time. It’s a Supreme Court case, and it is designed to interpret investment contracts, which is one element of the definition of security, and it has been applied in a lot of really different and very interesting fact patterns. By its nature, it’s going to pull in a lot of different types of things. So Howey, of course, everyone knows was about orange groves. Now it’s been applied very, very broadly in the crypto world. I think that Howey has been interpreted, maybe too broadly, and in instances, I think there are some areas of ambiguity that that the Supreme Court could address, but that I will say that is definitely above my pay grade. So if they decide to take that case, I will certainly watch that case, meaning a case related to Howey, regardless of who the parties are, I will definitely watch it closely if the Supreme Court decides to reconsider the Howey Test.
On the safe harbor front, I forget when exactly it was that you first introduced the idea of a safe harbor for the industry,
A long time ago, yeah.
Where are you now on that?
I still think we should do some kind of safe harbor. I think it would have been helpful if we had done that before. Because the sad thing about this, the way that we’ve done things, is that it’s actually disincentivized, if that’s a word, it’s discouraged people from making disclosures. And so I just want to get to a place where we actually encourage disclosure and we reward good disclosure, and I think that’s what a regime like the safe harbor regime could do. I’m not wedded to it. I think if people have better ideas, please send them in, tell us what they are. But my goal is to get to a world where people actually want to make disclosures, and they’re not fearing that if they make these disclosures, it’s going to make them a target of SEC enforcement actions. Now, of course, if you make disclosures and you lie, I mean, yes, then that’s fair enforcement game.
Do you have any kind of plans right now to either reintroduce this as a formal proposal, or just trying to get momentum back on this front?
Well, I think, as you saw from the questions that we put out, it’s definitely something we’re thinking about and want feedback on. I heard from a lot of people at the time that I put it out that they thought it would be helpful to have something like this. People didn’t love every aspect of it. I think you saw some people iterating on it. And so again, what the details are is up for debate, but it’s something that that we certainly want people to provide their thoughts on
I want to get your reaction to something that was posted online recently. Cameron Winklevoss, the co-founder of crypto exchange Gemini, posted a letter saying it was from the SEC, saying that they were going to close the investigation into that platform. But in that same post, he demanded restitution for the legal fees that they incurred, and asked for the litigators and investigators working on the case to be, I forget if it was fired or just publicly named and shamed, but I’m just curious if you have any kind of reaction to that kind of a public call.
Well, for one thing, I certainly understand. I’ve been very frustrated about how we’ve approached crypto here at the SEC over the past several years, and it has real world consequences. I get that, and it’s frustrating for me sitting here. I know it’s unbelievably more frustrating for people who are actually bearing the costs directly, and I’ve had conversations with some of those people, and it’s very difficult. But I think one thing that’s really important to underscore is that decisions about how to proceed, whether we’re going to use our enforcement tool, whether we’re going to use our rule-writing tool, are made at the commission level, and so the buck does stop at the commission. When we make bad decisions, the blame lies on us. It doesn’t lie on the staff who are directed to … They report to the chairman. They are supposed to follow the policy direction that they’re getting from the Commission. They’re supposed to execute that as effectively as they can.
We have a very good, hard working, dedicated staff at the Commission, and they seek to try to carry out the directives that they’re getting. And so I really think it’s so important for people to to understand that responsibility for decision-making, when, when the decisions are bad, when the policy direction is wrong, the blame has to lie at the commission and, and unfortunately, I think that over the past several years, we have taken an approach that has not helped the American public. It has not helped the industry to grow into being able to serve the American public as it hopes to, and it is, frankly, not serving the staff of the commission either, because it has been asking enforcement lawyers to be playing a role in writing policy. And it has been saying to policy folks, people who write rules and do interpretations and provide guidance, it said to them, you can’t do that because we’re just going to let enforcement do that. And that has led to a lot of really bad consequences. And I’m hoping we can right that ship.
Just to close out in the last few minutes, is there anything we haven’t discussed that you think people either in the crypto industry, or just the general public looking at crypto — is there anything they should keep in mind or think about over the next couple of weeks and months?
I just hope people will go to our crypto web page — it’s on the SEC website, you’ll see a link to the crypto web page. Send us a message, come meet with us. We’d love to talk to you. We’d love to hear from you, and so just stay tuned.
Awesome. Thank you very much, Commissioner, pleasure as always,
Thank you so much for having me.
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XRP Token Rises After Report That Ripple Is Close to Wrapping Up SEC Case: Ripple is one of the major SEC cases that has not yet been paused or dismissed — but reportedly, that’s coming.
U.S. SEC Acting Chair Walking Back Agency Proposal on Crypto Trading Platforms: Acting SEC Chair Mark Uyeda said in a speech that he has asked agency staff to ditch the crypto aspect of a Treasury market regulatory proposal that would have broadened the SEC’s purview to decentralized finance trading platforms.
Crypto ETFs Likely Won’t Be Approved Until New SEC Chair Is Sworn In: The SEC delayed decisions on a handful of spot crypto exchange-traded funds this week, and will likely continue to do so at least until Paul Atkins, Trump’s nominee to run the agency, is confirmed by the Senate and sworn in.
Latest Draft of U.S. Stablecoin Bill Aims to Split Power Between State and Federal Authorities: Sen. Bill Hagerty introduced an updated version of his GENIUS Act, i.e. the Senate’s stablecoin bill.
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This week
Tuesday
14:00 UTC (10:00 a.m. ET) The House Financial Services Committee held a hearing on stablecoin legislation.
20:30 UTC (16:30 p.m. ET) The entire House of Representatives voted in favor of the Congressional Review Act resolution overturning the IRS’ DeFi broker rule (right after narrowly voting in favor of a continuing resolution to fund the U.S. government through Sept. 30).
Thursday
14:00 UTC (10:00 a.m. ET) The Senate Banking Committee held a markup on the Senate stablecoin bill, with a bipartisan majority of the panel ultimately voting to send the bill to the full Senate.
Elsewhere:
(Reuters) A U.S. green card holder was detained by Immigration and Customs Enforcement, apparently without a warrant or charges. Mahmoud Khalil, a Columbia University graduate student of Palestinian origin, was arrested on Saturday and faces deportation. Reuters reported that he was a negotiator between Columbia administrators and student protestors at Columbia last year, and though he reportedly attended some protests he did not occupy any academic buildings or participate in any encampments. The Department of Homeland Security and U.S. President Donald Trump both acknowledged Khalil’s detention, and a White House spokesperson told The Free Press that Khalil is not accused of breaking any laws. Presumably this case will be of interest to the free speech and civil liberty proponents within the crypto industry.
(The Wall Street Journal) People representing U.S. President Donald Trump’s family have been in talks to acquire a stake in Binance.US, and Binance founder Changpeng Zhao — CZ, who owns a majority share in Binance’s global platform — has separately been looking for a presidential pardon, the Journal reported. CZ said he had not made a deal for a pardon and has not discussed a Binance.US deal, though his statement does not appear to deny the Journal’s actual reporting. Unchained reported that CZ is trying to sell part of his stake in Binance.US, and Bloomberg reported that the talks «have included the possibility» of a World Liberty-linked stablecoin.
(The Wall Street Journal) Michelle Bowman is the frontrunner to become the new Fed Vice Chair for Supervision, the Journal reported.
(Wired) X, formerly known as Twitter, was down for a bit earlier this week, apparently due to a distributed denial of service (DDOS) attack.
(Senator Cynthia Lummis) Sen. Cynthia Lummis reintroduced a bill that would direct the U.S. government to create a Strategic Bitcoin Reserve built up by using surplus remittance fees to purchase BTC.
(ProPublica) Ernst and Young (EY) is in talks with the U.S. Department of Housing and Urban Development to trial using crypto to pay federal grants.
(Cato Institute) The Financial Crimes Enforcement Network lowered the currency transaction reporting threshold from $10,000 to $200 for transactions in 30 zip codes in California and Texas.
(The Verge) Sen. Ron Wyden, an Oregon Democrat, wrote an oped defending Section 230 of the Communications Decency Act, which protects companies from being treated as the publisher or speaker of content posted to their platforms.
If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
See ya’ll next week!
Uncategorized
Trump’s Official Memecoin Surges Despite Massive $320 Million Unlock in Thin Holiday Trading

TRUMP, the memecoin tied to U.S. President Donald Trump, gained more than 9% in the past 24 hours following a $320 million token unlock. The price now sits around $8.40, still down more than 88% from its peak above $71 on Jan. 18.
The recent unlock may spell further trouble for investors, who are estimated to have lost a total of $2 billion after purchasing the token earlier this year.
Token unlocks typically flood the market with new supply and tend to depress prices. But in this case, the market appears to have priced in the release beforehand, potentially explaining the price uptick. Still, the $320 million unlock raises the risk of a large sell-off, especially given TRUMP’s thin liquidity.
Data from CoinMarketCap shows that just $1.3 million could move the token’s price by 2% on major exchanges. The move also comes during the Easter holiday weekend, when trading volumes are subdued and price swings can be more pronounced.
On social media, rumors are swirling about a possible event for large token holders, supposedly being organized by Trump himself. These claims remain unverified and highly speculative.
Data from Dune analytics shows there are currently 636,000 TRUMP token holders on-chain, with just 12,285 wallets having more than $1,000 worth of the cryptocurrency.
Uncategorized
Slovenia Moves to Tax Crypto Profits at 25%

Slovenia’s finance ministry has proposed a 25% tax on capital gains from cryptocurrency starting in 2026, under a draft law aimed at closing a gap in the country’s tax system.
The tax will apply to profit made when individuals sell crypto for fiat currency or spend it on goods and services. However, swapping one cryptocurrency for another will remain tax-free, and any gains made before January 1, 2026, will not be taxed, according to the finance ministry’s proposal.
The measure is meant to treat crypto gains more like other capital investments, such as stocks or bonds, which are already taxed.
Under the law, individuals would calculate their profit as the difference between the value at acquisition and at sale, adjusted for transaction fees. Losses can be carried forward to offset future gains. Taxpayers would need to file an annual return by March 31 and make payment within 15 days.
The tax could generate between €2.5 million and €25 million annually, according to preliminary government estimates. The country’s Ministry of Finance is soliciting public feedback on the proposal, which would come into effect next year.
The proposal comes as data from the European Central Bank’s ‘Survey on Consumer Payment Attitudes in the Euro Area’ shows Slovenia has the highest share of cryptocurrency owners in the euro area, with 15% of adults holding digital currencies last year, up from 8% in 2022.
Disclaimer: Information collected for this article was translated with the use of artificial intelligence.
Uncategorized
Unpacking the DOJ’s Crypto Enforcement Memo

Earlier this month, the Department of Justice disbanded its National Cryptocurrency Enforcement Team and said it would no longer pursue what Deputy Attorney General Todd Blanche described as «regulation by prosecution.»
You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.
‘Regulation by prosecution’
The narrative
The U.S. Department of Justice «will no longer pursue litigation or enforcement actions that have the effect of superimposing regulatory frameworks on digital assets» in lieu of regulatory agencies putting together their own frameworks for overseeing the sector, a 4-page memo signed by Deputy Attorney General Todd Blanche on April 7 said. In other words, the DOJ will no longer pursue «regulation by prosecution,» the memo said.
Why it matters
The DOJ’s memo raised concerns that it may mean criminal activities in the crypto sector would not be prosecuted, or at least prosecuted as heavily as it was under the past several years — both by disbanding the National Cryptocurrency Enforcement Team (NCET) and by shifting the entity’s priorities.
Breaking it down
At a practical level, the memo itself is internal guidance but may not be a binding document. Multiple attorneys told CoinDesk they interpreted the guidance to indicate that the DOJ would still bring fraud or other criminal cases involving crypto, but would try to avoid any cases where the DOJ itself had to determine if a digital asset was a security or a commodity.
«Fraud is still fraud,» said Josh Naftalis, a partner at Pallas Partners LLP and a former prosecutor with the U.S. Attorney’s office for the Southern District of New York. «This memo does not seem to say the DOJ is not going to prosecute fraud in the crypto space.»
Still, the memo raised alarms for prominent Democrats who questioned whether the DOJ was suggesting it would let criminal conduct occur. Senators Elizabeth Warren, Mazie Hirono, Richard Durbin, Sheldon Whitehouse, Christopher Coons and Richard Blumenthal wrote a letter to Blanche, saying his «decision to give a free pass to cryptocurrency money launderers» and shut down the NCET were «grave mistakes that will support sanctions evasion, drug trafficking, scams and child sexual exploitation.»
«Specifically, the Department will no longer target virtual currency exchanges, mixing and tumbling services and offline wallets for the acts of their end users or unwitting violations of regulations — except to the extent the investigation is consistent with the priorities articulated in the following paragraphs,» the DOJ memo said, a passage the Senators’ letter referenced.
New York Attorney General Letitia James wrote an open letter to Senate leaders in the same week asking them to advance legislation to address cryptocurrency risks. She did not specifically reference Blanche’s memo but detailed possible ways to better police the sector through legislation.
Katherine Reilly, a partner at Pryor Cashman and a former prosecutor with the U.S. Attorney’s Office for the Southern District of New York, told CoinDesk that most of the major crypto cases brought by the DOJ in recent years would not have been affected had this guidance been in effect.
The BitMEX case in 2020, when the DOJ and Commodity Futures Trading Commission brought unregistered trading and other charges against the platform, is «probably closest to the line» of being a case that may not have been brought under this guidance, she said.
Trump pardoned BitMEX, its founders and a senior employee in late March, barely two weeks before the DOJ memo was shared.
«I think that it’s clear that the Justice Department wants to limit the DOJ’s role in regulating the crypto industry … looking beyond its role in other crimes, fraud, laundering proceeds from narcotics trafficking, things like that, and sort of take a step back from the role of trying to bring order and fairness to the crypto industry as a whole,» Reilly said.
That’s «probably the intent behind the BitMEX pardons too,» she said.
Naftalis said the DOJ will continue to pursue drug, terrorism or other illicit financing charges even under the memo.
«I think that the headline for the industry is to the extent that there are legal uses of crypto, they’re not going to set the guard rail by criminal enforcement,» he said. «That’s for Congress.»
One section of the memo tells prosecutors not to charge Bank Secrecy Act violations, unregistered securities offering violations, unregistered broker-dealer violations or other Commodity Exchange Act registration violations «unless there is evidence that the defendant knew of the licensing or registration requirement at issue and violated such a requirement willfully.»
Carla Reyes, an Associate Professor of Law at SMU Dedman School of Law, told CoinDesk that this may be referencing recent cases where developers build tools under the impression that they were not committing unlicensed money transmitting activities under existing guidance but may get charged anyway.
«Most criminal statutes require some level of knowledge to define your intention, and knowledge that you’re committing a crime when you do it,» she said. «The further away you get from that, the lesser the charge, but the more willful [and] intentional it is, the higher the charge.»
What the memo seems to want to explicitly move away from is any suggestion that federal prosecutors would interpret how securities or commodities laws might apply to digital assets.
«Prosecutors should not charge violations of the Securities Act of 1933, the Securities Exchange Act of 1934, the Commodity Exchange Act, or the regulations promulgated pursuant to these Acts, in cases where (a) the charge would require the Justice Department to litigate whether a digital asset is a ‘security’ or ‘commodity,’ and (b) there is an adequate alternative criminal charge available, such as mail or wire fraud,» the memo said.
A popular critique leveled against former SEC Chair Gary Gensler by the crypto industry was that he was «regulating by enforcement,» rather than focusing on developing guidance for the industry to know what was or wasn’t acceptable. Blanche seems to be referring to a similar critique in the memo, Naftalis said, in that one-off enforcement decisions by the SEC or DOJ should not define the guardrails for the industry.
Steve Segal, a shareholder at Buchalter, said that some of the DOJ’s past cases would charge trading venues for failing to police their own customers. The memo now seems to suggest that if a crypto exchange’s executives were running a clean platform, and customers were laundering funds derived from criminal activities, the executives would not be charged. This is in contrast with, for example, FTX, where the executives were charged and convicted of (or pled guilty to) fraud charges.
«Of course, a lot of the big crypto cases we’ve seen over the last few years are sort of pure investor fraud, things like FTX. And one of the more interesting things about this memo is it talks about crypto investors and really prioritizing cases where crypto investors are being victimized,» Reilly said. «And so I don’t think we should conclude that this memo means we’re going to see a lot fewer cases in the crypto space, or that crypto companies can sort of breathe a sigh of relief that the DOJ is out of the picture for a few years.»
The DOJ’s future cases may appear a bit different in terms of the specific allegations made, but «it’s much too soon to say that everybody can assume the DOJ is out of the crypto business,» she said.
Many of the attorneys speaking to CoinDesk agreed that the memo itself did not clarify all of the different issues that may come up with a criminal case, nor was it an end-all/be-all document.
The memo announced prosecutorial discretion but it isn’t itself a law, Reyes said, adding that it may guide internal decision-making about which cases to pursue the most heavily, as well as the strategies that guide those prosecutions.
A lot of details about how this memo ties together with Trump’s executive order on the strategic bitcoin reserve still need to be spelled out, Segal said. Sections on victim compensation and how seized funds should be handled in the memo do not explain how the DOJ might handle situations where seized funds are turned over to bankruptcy estates, such as what happened with FTX or other similar scenarios.
«I think we’ll really have to see how it plays out, because this guidance, I do think, leaves prosecutors a lot of room to bring cases even of these kinds of violations that are being cast as more regulatory,» Reilly said. «So even if that’s the intent, I think the devil is in the details on what cases we see going forward.»
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- Feds Mistakenly Order Estonian HashFlare Fraudsters to Self-Deport Ahead of Sentencing: Ivan Turogin and Sergei Potapenko, who were extradited from Estonia to the U.S. on charges tied to the HashFlare Ponzi scheme, await sentencing after pleading guilty to one conspiracy charge each earlier this year. Though they’re under a court order to not travel before their sentencing, they received an email from the Department of Homeland Security telling them to self-deport, seemingly by mistake.
- Kraken Sheds ‘Hundreds’ of Jobs to Streamline Business Ahead of IPO, Sources Say: Kraken cut 400 roles last October, which at the time was about 15% of its workforce. It’s since continued shedding jobs, Ian Allison reports.
- Republican States Pause Lawsuit Against SEC Over Crypto Authority: A group of Republican Attorneys General have filed to pause a lawsuit against the Securities and Exchange Commission alleging its crypto enforcement actions intruded into state regulators’ remits.
- Crypto Casino Founder Richard Kim Arrested After Gambling Away Investor Funds: Zero Edge founder Richard Kim was arrested this week on wire and securities fraud charges after allegedly losing «nearly all» of the $7 million he raised from his investors. Kim told CoinDesk last year that he had gambled over $3.6 million of his investors’ funds away.
This week
Monday
- The Securities and Exchange Commission and Binance were set to file a joint status report on their discussions after a judge paused the regulator’s case against the exchange and its affiliated entities and executives in February. Last Friday, the parties asked for an extension of this deadline, and the judge overseeing the case signed off on Monday, giving the parties until mid-June to file a follow-up.
Elsewhere:
- (The Wall Street Journal) Binance executives met with U.S. Treasury Department officials in March about potentially «loosening U.S. government oversight» of the exchange following Binance’s November 2023 guilty plea, the Journal reported. Binance agreed to a court-appointed monitor as part of the plea. At the same time as last month’s discussions, Binance was in talks with the Trump-backed World Liberty Financial to develop a dollar-pegged stablecoin.
- (Fortune) Fortune spoke to and profiled Bo Hines, the executive director of U.S. President Donald Trump’s digital assets advisory council.
- (CNBC) U.S. importers are seeing more «canceled sailings» due to a drop in demand as a result of tariffs, CNBC reports.
- (The Verge) ICERAID claims to be a protocol on Solana where people can crowdsource images of «criminal illegal alien activity» in exchange for tokens, but it does not appear to have any connection to Immigration and Customs Enforcement (ICE), The Verge reports.
- (NPR) The Department of Homeland Security is revoking parole for a number of migrants, telling them to self-deport from the U.S. U.S. citizens, born within the U.S., are also receiving these emails.
- (The New York Times) Acting IRS Commissioner Gary Shapley has been replaced after just three days on the job, after Treasury Secretary Scott Bessent reportedly complained to President Donald Trump that he was not consulted on Shapley’s promotion, which was pushed by Elon Musk.
If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
See ya’ll next week!
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