SEC Clarifies the Application of Federal Securities Laws to Crypto Assets

Pointing to the U.S. Supreme Court’s Loper Bright decision from June 2024 overturning longstanding precedent on deferral to federal agencies in their promulgation of rules and regulations, on January 2, 2025, a three-judge panel on the 6th Circuit Court of Appeals ruled that the Federal Communications Commission (FCC) lacked the statutory authority to regulate broadband internet service providers (ISPs), invalidating the FCC’s net neutrality rule that was partially reinstated under President Joe Biden’s administration.

Without the FCC’s enforcement of net neutrality, the ability of private carriers to slow, block, or otherwise restrict access to internet content significantly undermines principles of openness and permissionless—principles that mirror the very ethos of decentralized blockchain networks. Ultimately, this change and the policy efforts of the Trump administration could jeopardize the frictionless flow of on-chain database transactions and access to various blockchain networks and dApps and could even threaten the innovation and adoption of AI technologies.

Last updated 05/21/2025.

See the case docket

On April 10, 2025, President Donald Trump signed a binding resolution passed by both chambers of the Congress under the Congressional Review Act (RCA) that nullified digital asset reporting obligations imposed on operators of decentralized exchanges and DeFi platforms pursuant to a December 2024 rule promulgated by the Treasury Department’s Internal Revenue Service (IRS) under the 2021 Infrastructure Investment and Jobs Act (IIJA). Under the CRA, a disclaimer of an agency rule prevents the agency from passing the same or a substantially similar rule in the future.

The IRS had promulgated its final rule under the IIJA with only weeks left in President Joe Biden’s administration, seeking to require operators of ‘front-end’ web interfaces providing access to DEXs or other DeFi services to, starting in 2027, perform due diligence on users and file related transaction reports with the Internal Revenue Service (IRS). The originally proposed rule was sought to be applied even against the developers of DeFi protocols and self-hosted digital asset wallets, but the new legislation would likely prevent the IRS from pursuing similar rulemaking efforts in the future.

Last updated 05/21/2025.

See the CRA resolution

Congress, exercising its power under the Congressional Review Act (CRA), officially disclaimed and effectively nullified the CFPB’s final rule establishing federal oversight over large digital payment service providers. Under the CRA, a disclaimer of an agency rule prevents the agency from passing the same or a substantially similar rule in the future.

The final rule, published December 10, 2024, required certain consumer-facing payment apps to comply with existing consumer protection laws and CFPB supervisory authority. Intended to safeguard personal data, reduce fraud, and prevent unfair account closures (sometimes referred to as “illegal debanking”), the rule defined “larger participants” in the digital payments market based on transaction volume and other objective criteria, thereby extending CFPB examination to those meeting the specified thresholds. The final rule became effective on January 9, 2025, and was officially disclaimed on May 12, 2025.

Last updated 05/21/2025.

See the CRA resolution

On December 11, 2025, the President issued an executive order (the “EO”) launching a national artificial intelligence policy framework and directing federal agencies to challenge state laws that conflict with federal priorities. The EO tasks the Department of Justice to create an Artificial Intelligence Litigation Task Force and bring challenges in courts seeking to block state AI laws based on conflict preemption, obstacle preemption, or interstate commerce grounds. The EO also tasks the Secretary of Commerce to review existing state laws and identify provisions that conflict with the policy objectives set out in the EO. It also directs grant-making agencies to condition certain discretionary federal funds on state commitments not to enforce conflicting artificial intelligence statutes.

The EO additionally charges the Federal Communications Commission (FCC) to begin considering federal disclosure and reporting standards for AI models, and it requires the Federal Trade Commission (FTC) to ssue a policy statement applying Section 5 of the Federal Trade Commission Act to AI practices that implicate unfair or deceptive conduct. Under the EO, the President’s advisors must prepare legislative recommendations for a comprehensive federal framework that could preempt conflicting state laws while preserving state authority over child safety, permitting, and the procurement and use of AI systems. The EO expands on the Trump administration’s existing laissez-faire posture on AI policy and stands in stark tension with the Senate’s July action striking a 10-year moratorium on state AI laws in the 2025 budget reconciliation bill (formerly known as the “One Big Beautiful Bill”).

Last Updated 12/11/2025.

Read the E.O.

Immediately after assuming office, President Donald Trump signed an Executive Order that expressly repealed the former President Joe Biden’s October 2023 order on the safe and responsible development of AI (‘artificial intelligence‘). The repealed order had established several directives for the Department of Commerce’s Bureau of Industry and Security (BIS) on which parts of its January 2024 Proposed Rule was based that seeks to impose KYC (‘know-your-customer‘) and enhanced due diligence requirements on large cloud service providers and were based.

The BIS’s Proposed Rule would implement additional measures to address the ‘ongoing national emergency’ related to significant malicious cyber-enabled activities. It would expand on existing U.S. export control frameworks in an effort to deter malicious actors from exploiting U.S. technologies and services by imposing new restrictions and due diligence requirements, particularly for cloud infrastructure providers and other potentially vulnerable platforms. Organizations involved in providing or hosting software, data processing, or cloud services would be subject to heightened compliance obligations under the proposed regulations, having a potentially profound impact on the digital assets industry. The BIS has not indicated whether its publication of a final rule could still be expected or whether it would accord with a lesser scope than the Proposed Rule.

Last updated 05/21/2025.

See the BIS Proposed Rule