With Congress in full swing and administrative agencies’ new leadership announcing their agendas, it was a BUSY week in Web3 legal developments. It seems likely there will be stablecoin legislation going through Congress in the next few months with a total market structure bill following shortly thereafter. Also, just to stay up to date on a rage of tech and privacy issues (including a few articles from yours truly) check out the 2025 Technology Transactions & Data Privacy Report.
Here’s everything that happened last week in Web3 legal:
Joint Press Conference Held on Bipartisan Roadmap to Digital Asset Legislation
“Crypto and AI Czar” David Sacks held a press conference with Senate Banking Chair Tim Scott, House Financial Services Chair French Hill, House Agriculture Chair Glenn “GT” Thompson, and Senate Agriculture Chair John Boozman to discuss the previously issued Executive Order titled Strengthening American Leadership in Digital Financial Technology and how the Executive and Legislative branches planned to work together in establishing a clear framework for U.S. digital assets and their issuers.
Tl;dr– The main takeaway seemed to be that stablecoin legislation is on the immediate horizon, which is discussed below as well related to Senator Hagerty’s GENIUS Act being released the same day as the press conference. It also appears that FIT 21 (passed through the House last year) will be the starting point for a market structure bill, but as I have previously covered, there are still significant hurdles to overcome to make that market structure bill fit for purpose. There was a recognition by all the speakers that digital assets are going to be foundational in financial services for the foreseeable future, so creating a framework to ensure U.S. dominance in the sector will be crucial in maintaining the current dominance of American financial markets.
Congress Holds Hearings on Debanking (Chokepoint 2.0)
The Senate Banking Committee held a hearing titled Investigating the Real Impacts of Debanking in America on February 5th, followed shortly thereafter by a House Financial Services Committee hearing titled Operation Choke Point 2.0: The Biden Administration’s Efforts to Put Crypto in the Crosshairs on February 6th. While both had a aim at determining the scope of debanking and potential solutions to legally operating individuals and companies being refused banking services, the House’s hearing focused especially on digital assets and had testimony from Coinbase head of legal Paul Grewal and NYU Professor Austin Campbell, who are two of the most knowledgeable individuals when it comes to the effect of debanking on digital asset participants.
Tl;dr– Directly before the Senate’s hearing, Senator Cramer (R-ND) reintroduced his Fair Access to Banking Act, which aims to require banks provide impartial and risk-based explanations for granting or refusing lending or other banking services. The FDIC also released 175 documents related to its supervision of banks that engaged in, or sought to engage in, crypto-related activities before the hearings (previously withheld despite FOIA requests/litigation over those requests; also, read this bench slap transcript in that FOIA action if you are ever having a bad day and need a pick-me-up). This was a great section of the think pieces referenced below about the effect debanking can have on ordinary people and the need for access to DeFi for people that want more control over their own finances.
CFTC and SEC Announce Digital Asset Agendas
In a statement titled “The Journey Begins” Commissioner Peirce put forward her plans as the leader of the newly formed SEC Crypto Task Force. While at the CFTC, Acting Chair Pham announced a plan to “Refocus on Fraud and Helping Victims, Stop Regulation by Enforcement” and various taskforce realignments at the agency. Both seem intent to remain focus on bringing actions against fraudster or bad actors, while removing enforcement focus from good actors who are attempting to abide within the bounds of commodities and securities laws when applied to blockchain-enabled cryptographic technologies.
Tl;dr– Commissioner Peirce’s statement is especially well done. “In this country, people generally have a right to make decisions for themselves, but the counterpart to that wonderful American liberty is the equally wonderful American expectation that people must decide for themselves, not look to Mama Government to tell them what to do or not to do, nor to bail them out when they do something that turns out badly.” The Digital Chamber, Blockchain Association, and others have already announced organized working groups to assist the agencies in reaching sound policies that protect against fraud while preserving American freedoms and innovations. There seems to be renewed hope that a sensible and transparent framework for operating a digital asset company in the United States is feasible in the next few years.
OTHER STORIES
SEC Takes Away Investigation Power: The staff at the SEC will need to obtain approval of the Commissioners for all formal orders of investigations for the time being. Prior to this, enforcement directors or other senior staff had the power to launch investigations, but that apparently has changed under new leadership. It also reassigned the litigator overseeing many of the agency’s crypto cases to the building where the SEC’s IT is housed. With the level of disruption that a mere investigation can have on an individual/business, probably good for a reset on that.
DeFi Handles Flash Crash Like Pros: I said it in the last update, but the ability for DeFi to handle the 1-day flash crash of a nearly half trillion drawn down in the crypto markets (from ~$3.5 trillion to $3 trillion) was impressive.
Senate Stablecoin Bill Introduced: Senate Banking Committee member Bill Hagerty (R-TN) has introduced a bipartisan Senate stablecoin bill (Senator Gillibrand (D-NY) is a co-sponsor) as a companion to the House bill passed through their financial services committee last year. The House also dropped a discussion draft bill. While I have reservations on rushing a market structure bill, bills like this for discrete digital asset issues combined with knowledgeable people in administrative leadership roles make total sense.
Venture Firm Releases Think Pieces on Crypto: I really enjoyed this editorial about how to encourage crypto development in America and especially the section on decentralization from Miles Jennings and the a16z crypto team. “We don’t need loopholes making exceptions for anything labeled ‘crypto’; we just need good guiderails. Because decentralization matters. Control matters. If we value freedom, fairness, and resilience, then we should all care about the topic.” Well said.
Lawyer Suing Pump Fun Issues C&D Over Memecoin: The law firm suing Pump Fun has issued various C&Ds and public statements regarding memecoins using their name and the memecoin “DOGSHIT2” which was seemingly created as a part of one of their lawsuits against Pump Fun to show how easy it is to issue “securities” through the platform.
Tornado Cash Developer Petitions SCOTUS: I didn’t see this when it was at the Second Circuit, but apparently Roman Storm is being forced to reveal his criminal defense strategy re: expert testimony in what appears to directly contravene the federal criminal procedure rules on the issue? So now he’s asking SCOTUS to step in. I think this is extremely upsetting and creates irreparable harm because if later deemed incorrected, prosecutors can’t forget what they learned in a retrial.
Memecoin Update: I am very tired of the memecoin craze, but the Kanye and Dave Portnoy memecoin sagas were such big stories this week that I have to include them in the update. Looking forward to market structure bills so the adults in the room can build products with real value.
Tigran Gambaryan Story of Nigerian Imprisonment: This story of former IRS agent turned Binance employee’s imprisonment in Nigeria is fascinating. The fact he went back after a first bribery extortion attempt gone wrong by officials is crazy.
CONCLUSION
If you have any questions or would like me to write about anything else, let me know on Twitter (X?) or Warpcast. As always, I am an attorney, I am not your attorney. For legal advice, you should always consult (and pay for) an attorney.
Outro/Disclaimer: Since late 2022, I’ve prepared weekly updates for attorneys at my firm to stay abreast of the latest Web3 legal developments. The biggest stories are included in Bi-Weekly posts on the firm’s BitBlog, where we provide tl;dr overviews and insights into the biggest stories from the past two weeks. I post the weekly updates on my personal blog every Tuesday, where I also provide links to more obscure legal developments and otherwise discuss industry trends and stories. Please note, the views and opinions I express, both on BitBlog and my personal blog, are solely my own. They do not reflect the official stance or endorsement of my firm.
The NFTtorney 