Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
Senate Agriculture Committee Advances Crypto Market
Structure Bill
On Jan. 29, the U.S. Senate Agriculture Committee voted
along party lines to advance a cryptocurrency market structure bill
that would grant the Commodity Futures Trading Commission (CFTC)
regulatory authority over digital commodities. Committee Chairman
John Boozman, R-Ark., moved forward with the legislation despite
losing bipartisan support for an earlier version. Boozman had
previously collaborated with Sen. Cory Booker, D-N.J., on a draft
bill last year, but Booker declined to support the version the
committee approved Thursday. Although this marks the first time a
crypto market structure bill has advanced beyond a Senate
committee, additional hurdles remain. The Senate Banking Committee
must also approve its own version of a crypto market structure bill
before the two measures can be reconciled and brought to the full
Senate for consideration. The full press release is
available here.
White House Officials Meet with Banks to Advance Crypto
Market Structure Bill
On Feb. 2, executives from Coinbase, crypto trade groups,
and banking associations met with White House officials to resolve
a standoff over the stablecoin reward provisions that derailed the
U.S. Senate Banking Committee's crypto market structure bill
last month. During the meeting, the White House reportedly ordered
the two sides to come to an agreement by the end of February.
The media reporting of the event is available here.
SEC Drops Charges Against CryptoFed
On Feb. 4, the Securities and Exchange Commission (SEC)
dismissed proceedings against American CryptoFed DAO LLC. The case
originated on Nov. 10, 2021, when the SEC refused to allow
CryptoFed to withdraw a "misleading" Form S-1
registration statement related to the issuance of a stablecoin and
a governance token. In its order, the SEC acknowledged that
"much has changed about the regulation of crypto assets since
these events, including on topics that could affect a company's
decision on whether or how to file registration statements
concerning crypto assets." The agency cited several recent
developments: the enactment of the GENIUS Act, the executive order
supporting the growth of blockchain and digital assets, and SEC
Chairman Paul Atkins' support for clearer guidelines for market
participants. The order is available here.
OFAC Sanctions Two Crypto Exchanges.
On Jan. 30, the Office of Foreign Assets Control (OFAC)
sanctioned two crypto exchanges–Zedcex Exchange Ltd. (Zedcex)
and Zedxion Exchange Ltd. (Zedxion)–for the first time under
Iran-specific financial institution sanctions. Both exchanges are
UK-registered digital asset platforms with connections to a
sanctioned Iranian businessman. In addition to designating the
exchanges for operating in the financial sector, OFAC designated
Zedcex and Zedxion pursuant to E.O. 13224, as amended, for having
materially assisted, sponsored, or provided financial, material, or
technological support for or goods or services to or in support of
the Iranian Revolutionary Guard Corps. The press release is
available here.
CFTC Withdraws Prediction Markets Advisory and Proposed
Rules
On Feb. 4, the CFTC announced it has withdrawn the notice
of proposed rulemaking titled "Event Contracts" that was
published June 10, 2024, and the CFTC Staff Advisory 25-36 on
certain contract markets, issued Sept. 30, 2025. CFTC Chairman
Michael Selig noted that "[t]he 2024 event contracts proposal
reflected the prior administration's frolic into merit
regulation with an outright prohibition on political contracts
ahead of the 2024 presidential election" and that the CFTC
will be advancing "a new rulemaking grounded in a rational and
coherent interpretation of the Commodity Exchange Act that promotes
responsible innovation in our derivatives markets in line with
Congressional intent." The press release is available
here.
Nu Receives Conditional Approval for a National Bank Charter from the Office of the Comptroller of the Currency
On Jan. 29, the Office of the Comptroller of the Currency (OCC)
conditionally approved the application from Brazil-based digital
challenger Nubank (Nu) to form a national bank in the United
States. The approval arrived just 121 days after Nu, one of the
world's largest digital financial services platforms with over
127 million customers across Brazil, Mexico, and Colombia,
submitted its application on September 30, 2025. See the full
press release here.
Canada Issues New Crypto Custody Rules
On Feb. 3, the Canadian Investment Regulatory Organization (CIRO), Canada's investment regulator, introduced a new digital asset custody framework that tightens rules on how crypto assets are held. The guidance establishes a tiered, risk-based structure for custody; sets minimum capital requirements; and requires dealer members to hold digital assets with approved digital asset custodians unless they can demonstrate satisfactory custody technology for internal custody. The framework also differentiates between crypto assets and tokenized versions of traditional assets with respect to required safeguards. Tokenized assets must be held with entities that qualify as acceptable securities locations under the traditional custody framework, but because custody is performed through digital asset infrastructure, tokenized asset custodians must also meet certain specified digital custody safeguards applicable to crypto asset custodians. The full notice is available here.
Nevada Issues Temporary Restraining Order Against
Prediction Markets Exchange
On Jan. 29, Nevada state court Judge Jason Woodbury issued
a temporary restraining order (TRO) blocking Blockratize–the
entity behind Polymarket, the world's largest prediction
markets exchange–from offering event-based contracts in the
state. The two-week order concluded that the platform's
activities likely violate Nevada gaming law and are not shielded by
exclusive federal derivatives oversight. "The resulting harm
in evasion of Nevada's 'comprehensive regulatory
structure' and 'strict licensing standards' is
immediate, irreparable, and not sufficiently remediable by
compensatory damages," the judge wrote. Days later, on
February 3, Nevada's Gaming Control Board announced that it had
filed a civil enforcement action against Coinbase, the largest U.S.
crypto exchange, for allegedly offering unlicensed wagering in the
state through its sports events contracts. The TRO was first
reported here, and the press release is
available here.
Hawaii Introduces Bill Defining Prediction Markets as
Gambling
On Jan. 30, Hawaii lawmakers referred proposed legislation
that would expressly prohibit prediction market contracts. To the
state's definition of gambling, the proposed bill adds
"gambling does include the purchase, sale, or
financial speculation upon securities, commodities, or other
similar financial products where the outcome or future contingent
event relates to" sports, contests, people, politics,
catastrophe, and death. The bill text is available here.
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