DSG Crypto Regulatory Roundup: January 2025
International Bodies
European Union Implements MiCA: This month, the European Union’s Markets in Crypto-Assets (MiCA) regulation fully took effect, establishing a uniform regulatory framework for crypto-asset service providers (CASPs) across the 27 EU member states. Several major cryptocurrency exchanges, including OKX (Malta), Crypto.com (France), and Bitpanda (Germany), have secured MiCA licenses, allowing them to operate across the EU under a single authorization. The European Securities and Markets Authority (ESMA) will oversee compliance and enforcement measures, with additional guidance expected in mid-2025. More here.
United Kingdom Develops Its Own Crypto Regulatory Framework: While the EU moves forward with MiCA, the United Kingdom continues working on its independent regulatory framework for digital assets. As of this month, only a limited number of firms have received Financial Conduct Authority (FCA) approvals for crypto-related activities, despite a high number of applications. The UK Treasury has indicated that comprehensive crypto regulations are expected by 2026, allowing time to refine the framework while analyzing MiCA’s early impact. The proposed UK rules will focus on anti-money laundering (AML) compliance, stablecoin oversight, and investor protection while ensuring innovation in the sector. Some industry experts believe the delayed approach may allow the UK to establish a more tailored regulatory model with lessons learned from MiCA’s implementation. More here.
China Places Blockchain at the Core of National Data Strategy in New Guidelines: China’s new “National Data Infrastructure Construction Guidelines” position blockchain as a central component of China’s approach to improving data security, transparency, and scalability. The guidelines, introduced by the National Development and Reform Commission, outline a phased implementation plan with a fully operational blockchain-powered data infrastructure by 2029. Key features include the creation of “trusted data spaces” for secure data exchange, blockchain-based data markets for asset tokenization, and decentralized applications for industries like finance and manufacturing. More here.
ESMA Provides Guidance on MiCA Best Practices: On January 31, the European Securities and Markets Authority (ESMA) published a supervisory briefing aiming to align practices across the EU member states. The briefing, developed in close cooperation with National Competent Authorities (NCAs), promotes convergence and prevents regulatory arbitrage, providing concrete guidance about the expectations on applicant Crypto Asset Service Providers (CASPs), and on NCAs when they are processing the authorization requests. More here.
United States
FDIC ‘Pause’ Letters Focused on Banks’ Crypto Activity: Documents released on January 5 reveal that the Federal Deposit Insurance Corporation (FDIC) requested banks to pause crypto-related activities in 2022 and 2023 but did not mandate they cease serving crypto companies. The letters, which had previously been redacted, show the FDIC discouraged banks from offering services tied to public blockchain networks and asked at least one bank to delay a new crypto product while the regulator assessed its risks. These documents were made public as part of a court case between Coinbase consultant History Associates and the FDIC, counter claims from the crypto industry that the FDIC had ordered banks to “de-bank” crypto firms. Coinbase’s legal chief, Paul Grewal, criticized the FDIC’s actions, alleging a broader, coordinated effort to stifle crypto activity, which he likened to the Obama-era “Operation Choke Point” that targeted high-risk industries. The FDIC also published an internal memo from 2022 detailing its approach to reviewing crypto-related activities by banks, citing concerns over financial stability and consumer protection. More here.
SEC Rescinds Crypto Accounting Rule: On January 19, the SEC rescinded Staff Accounting Bulletin 121 (SAB 121), which previously required financial institutions to record custodied crypto assets as liabilities on their balance sheets. The decision follows increasing pressure from lawmakers and financial institutions arguing that the rule discouraged banks from engaging in digital asset custody services. The reversal is expected to facilitate broader institutional participation in crypto markets, though other banking regulators, including the Federal Reserve and the Federal Deposit Insurance Corporation (FDIC), continue to evaluate potential risks, with other financial institutions indicating they will reassess their crypto offerings following the rule change. More here.
SEC Acting Chairman Launches Crypto Task Force: On January 21, SEC Acting Chairman Mark Uyeda announced the creation of a crypto task force aimed at establishing a comprehensive regulatory framework for crypto assets. The task force will be led by SEC Commissioner Hester Peirce, with two Senior Advisors to Acting Chairman Uyeda serving in key roles. The initiative seeks to collaborate with SEC staff, industry stakeholders, and the public to craft a regulatory approach that balances investor protection, market integrity, and innovation, with the objectives including defining clear regulatory lines, creating realistic paths to registration, designing practical disclosure frameworks, and ensuring enforcement resources are deployed judiciously. The task force will coordinate efforts with other federal, state, and international agencies, such as the CFTC, operating within the statutory framework established by Congress and providing technical assistance to lawmakers as they consider updates to crypto regulation. More here.
President Trump Announces Executive Order Advancing U.S. Leadership in Digital Financial Technology: On January 23, President Donald Trump signed an Executive Order (EO), “Strengthening American Leadership in Digital Financial Technology,” which established a comprehensive framework to promote U.S. leadership in digital assets and blockchain technology alongside safeguarding economic liberty, encouraging innovation, and securing national sovereignty. A fact sheet on the EO released by Trump’s Administration can be found here. The EO explicitly prohibits the establishment, issuance, circulation, or use of Central Bank Digital Currencies (CBDCs) within the United States, citing risks to financial stability, individual privacy, and national sovereignty. All ongoing agency efforts related to CBDCs must be immediately terminated unless required by law. To strengthen U.S. competitiveness, the order revokes Executive Order 14067 issued in March 2022 and the Treasury Department’s “Framework for International Engagement on Digital Assets,” directing the Treasury Secretary to rescind or modify any inconsistent policies. Senate Banking Committee Chairman Scott (R-SC), HFSC Chairman Hill (R-AR), Representative Steil (R-WI), and Senator Lummis (R-WY) voiced their support for the EO. More here.