Digital Assets Recent Updates – March 2025

Client Alert | April 1, 2025

We are pleased to provide you with the March edition of Gibson Dunn’s digital assets regular update. This update covers recent legal news regarding all types of digital assets, including cryptocurrencies, stablecoins, CBDCs, and NFTs, as well as other blockchain and Web3 technologies. Thank you for your interest.

ENFORCEMENT ACTIONS

UNITED STATES

SEC Drops Ripple Appeal
On March 25, Ripple Labs CLO Stuart Alderoty announced that the company will pay the SEC a $50 million civil penalty to resolve the agency’s enforcement action, and the agency and company will each drop their appeals of an adverse decision in the district court. The SEC brought the action initially in 2020. Last year, U.S. District Judge Analisa Torres ruled that secondary sales and other distributions of XRP are not securities transactions but ordered Ripple to pay $125 million for failing to register institutional sales of the XRP token, which she held were securities transactions. The SEC and Ripple cross-appealed these decisions to the Second Circuit. Law360; CoinDesk; Reuters.
DOJ Dismisses BitClout Crypto Fraud Case
Federal prosecutors have dropped their fraud case against the founder of crypto project BitClout, whom they had accused of defrauding a venture capital firm by misleading investors. According to a joint filing by the SEC and BitClout’s founder Nader Al-Naji, the SEC is also considering dropping a parallel action against Al-Naji. The Department of Justice’s order did not give a reason for the dismissal. Law360; Order Dismissing Criminal Complaint; Joint Letter.
DOJ Disrupts and Takes Down Russian Cryptocurrency Exchange and Indicts Foreign Nationals
On March 7, the DOJ announced that in coordination with German and Finnish law enforcement, it has taken down the online infrastructure of Garantex, a cryptocurrency exchange allegedly used to facilitate money laundering for transnational criminal organizations and sanctions violations. The coordinated action seized Garantex’s domain names and servers and froze over $26 million in funds. DOJ alleged that Garantex has processed at least $9 billion in cryptocurrency transactions since April 2019 and was operated by Lithuanian resident Alksej Besciokov and Russian national Aleksandr Mira Sera, who have been indicted for money laundering conspiracy and other charges that carry maximum penalties of 20+ years in prison. According to a subsequent news story, Besciokov was later arrested in India. DOJ Press Release; BBC.
Brooklyn Man Sentenced to 45 Months in Prison for $2M Crypto Fraud
On March 13, Thomas John Sfraga was sentenced by Judge Frederic Block of the Eastern District of New York to 45 months in prison and was ordered to pay $1,337,700 in forfeiture, with restitution pending. Allegedly posing as a serial entrepreneur, Sfraga allegedly solicited more than $2 million in investments from at least 17 victims for fake property flips and cryptocurrency ventures, promising returns up to 60% in three months. Sfraga then used such funds for personal expenses and to repay earlier victims. Press Release; Sentencing Memorandum.
Cryptocurrency Founder Convicted of Wire Fraud and Money Laundering
On March 12, Rowland Marcus Andrade, the founder and CEO of NAC Foundation, was convicted at trial of fraud and money laundering in the Northern District of California. By promoting a cryptocurrency, AML Bitcoin, Andrade allegedly defrauded tens of thousands of investors of over $10 million through making false statements about the AML Bitcoin’s technology and its business deals. He allegedly diverted over $2 million for personal use and laundered funds through multiple accounts. Andrade’s sentencing is scheduled on July 22. He faces up to 30 years in prison and potential forfeiture of all assets traceable to the crimes. Press Release; Law360.
Russian Cryptocurrency Manipulator Pleads Guilty and Forfeits $23 Million
On March 21, Aleksei Andriunin, a Russian founder of a market-making service company, and that company, Gotbit Consulting LLC, pleaded guilty in Massachusetts federal court. Andriunin and Gotbit both pled guilty to charges of conspiracy to commit market manipulation, and wire fraud, and agreed to forfeit $23 million in cryptocurrency. Andriunin allegedly developed codes to artificially inflate trading volume in order to list cryptocurrency on larger exchanges and has gained tens of millions of dollars through his fraudulent services. Gotbit Plea Agreement; Andriunin Plea Agreement; Law360.
SEC Closes Investigation into Crypto.com
On March 27, Crypto.com announced that it was informed by the SEC that the SEC ended its investigation into the company with no enforcement action. According to Crypto.com, it received a Wells notice from the SEC in August 2024, alleging that the company acted as an “unregistered broker-dealer and securities clearing agency under the federal securities laws.” In October 2024, Crypto.com filed a complaint seeking declaratory and injunctive relief against the SEC. Press Release; Complaint.
President Trump Pardons BitMEX Founders
On March 27, President Trump granted pardons to four former executives of the BitMEX global cryptocurrency exchange, as well as HDR Global Trading Limited, the entity that owned and operated BitMEX, all of which had pled guilty to violating the Bank Secrecy Act. The former executives, Arthur Hayes, Benjamin Delo, Samuel Reed and Gregory Dwyer, had received criminal sentences of probation and fines of more than $30 million for willfully failing to maintain anti-money laundering and know-your-customer programs. HDR had been sentenced to a $100 million fine in addition to its previous $100 million no-admit no-deny settlements with CFTC and FinCEN due to compliance failures. Pardons; Law360.

INTERNATIONAL

FCA Announces Sentencing of Individual for Unregistered Crypto-Asset Activity
On February 28, the UK Financial Conduct Authority announced that it has secured a four-year sentence for an individual for illegally operating crypto ATMs. The individual allegedly operated crypto ATMs at 28 different locations across the UK, despite being refused an FCA license for his business in 2021 due to concerns over compliance with regulations. This is the first sentence for unregistered crypto-asset activity in the UK. FCA Press Release.

REGULATION AND LEGISLATION

UNITED STATES

SEC Says Cryptocurrency Mining Doesn’t Trigger Securities Laws
On March 20, the SEC’s Division of Corporation Finance confirmed in a statement that cryptocurrency mining activities, including both self-mining and mining pools, do not involve the offer and sale of securities, and thus do not require registration or exemption under securities laws. Under the previous administration, SEC has declared that proof-of-stake blockchains fall under the regulation of securities laws. SEC Statement.
CFTC Withdraws Two Staff Advisories to Ease Crypto Oversight
On March 28, the CFTC announced its withdrawal of two staff advisories that imposed extra scrutiny on the clearing and trading of digital-asset derivatives, aiming to align the regulatory treatment of these products with other derivatives under its jurisdiction. The CFTC stressed that the same listing standards and risk-management principles still apply to all derivative products, and that the withdrawal would not affect its oversight of clearing and systemic risk. Press Release; Bloomberg.
In Bipartisan Votes, Congress Votes to Overturn Crypto Tax Reporting Rule
In a significant victory for the crypto industry, Congress has passed a joint resolution under the Congressional Review Act that will repeal a Treasury Department and IRS rule that would have subjected DeFi participants to onerous tax-reporting requirements for digital-asset transactions (DeFi Broker Rule). On March 11, the House voted 292-131 to pass the resolution, which was then passed by the Senate with a 70-28 vote on March 26. Once signed into law by President Trump, the resolution will not only effectively repeal the DeFi Broker Rule, but also will prohibit Treasury and the IRS from issuing a new rule that is “substantially the same” as the repealed rule absent new legislation. The resolution will not repeal the IRS’s July 2024 broker rule applicable to custodial digital asset trading platforms. Joint Resolution; Law360; CoinDesk; Cointelegraph.
Trump Order Establishes Strategic Bitcoin Reserve, and States Consider Doing the Same
On March 6, President Trump signed an Executive Order to establish a Strategic Bitcoin Reserve and a U.S. Digital Asset Stockpile. The order aims to position to United States as a leader in digital-asset strategy. The reserve will be funded with Bitcoin finally forfeited in criminal or civil proceedings and will not be sold, akin to a “digital Fort Knox” according to newly appointed “crypto czar,” David Sacks. Texas soon followed suit on March 6 when the Texas Senate passed S.B. 21, which would establish the Texas Strategic Bitcoin Reserve and allow the state to invest public money into digital assets. The bill is waiting to be voted by the House. Similarly, on March 5, New Hampshire’s H.B. 302, which would allow the state to invest up to 5% of state funds into bitcoin and other assets, was passed by the House committee and is pending for a full floor vote. Executive Order; White House Fact Sheet; Texas S.B. 21; New Hampshire H.B. 302.
Senate Banking Committee Votes to Advance Stablecoin Bill
On March 13, a bipartisan group of senators in the Senate Banking Committee, led by Senator Bill Hagerty (R-Tenn), voted to advance the “GENIUS Act” (Guiding and Establishing National Innovation for US Stablecoins) to the Senate. The Act aims to create a regulatory framework for stablecoins, defining when issuers fall under state or federal oversight. Senator Elizabeth Warren (D-Ma) expressed concern over the bill, cautioning that it could allow tech billionaires like Elon Musk to issue their own currencies to compete with the US dollar. The Block.
OCC Clarifies Certain Crypto Activities are Permissible for Banks
In an Interpretive Letter issued on March 7, the OCC reaffirmed that banks may engage in certain cryptocurrency-related activities, including crypto-asset custody, stablecoin transactions, and participation in independent node verification networks. The Letter removes existing requirements for banks to obtain supervisory nonobjection before engaging in such activities. According to Rodney Hood, the acting Chief of the OCC, the agency intends to align the regulations of novel and traditional bank activities. Interpretive Letter; Press Release.
FDIC Allows Banks to Engage in Crypto Activities without Prior Approval
On March 28, the FDIC issued a Financial Institution Letter clarifying that banks may engage in permissible activities without prior FDIC approval, as long as they manage the risks. The FDIC will coordinate with the President’s Working Group on Digital Asset Markets and the other banking agencies to issue further guidance or regulations. Press Release.
Tim Scott (R.-S.C.) Introduces FIRM Act Aimed at Debanking
On March 6, Senate Banking Chair Tim Scott introduced the Financial Integrity and Regulation Management (FIRM) Act to address concerns about the debanking of certain companies, particularly in the crypto industry. The bill aims to eliminate the use of reputational risk as a component of regulatory supervision, which Scott argues has been misused by federal regulators to carry out political agendas. The bill has passed out of the Senate Banking Committee and will next move to the Senate for a vote. Bill; Press Release; Axios.
OCC Ceases Examinations for Reputational Risk
On March 20, the OCC issued a statement that it will no longer examine national banks for reputational risk and is removing references to reputational risk from its Handbook and guidance issuances. Certain crypto companies have previously argued that examinations focused on reputational risk contributed to banks refusing to open accounts or otherwise work with crypto companies. This action indicates that the OCC may be seeking to ease the compliance path for banks engaging with crypto businesses. Press Release; Law360; Coindesk;
SEC Acting Chairman Directs Staff to Reexamine Proposed Crypto Custody Rule
During a March 17 speech, the SEC’s Acting Chairman, Mark Uyeda, said that the SEC is considering modifying or eliminating a crypto custody rule proposed by the prior administration that would have required registered investment advisors to custody digital assets with a qualified custodian, among other things. Given the concerns expressed by commenters, Uyeda said, “there may be significant challenges to proceeding with the original proposal.” Uyeda said that he had directed SEC staff to work with the SEC’s new crypto task force to “consider appropriate alternatives.” The Block; Reuters.
Nebraska Enacts New Law to Prevent Crypto ATM Fraud
On March 12, Nebraska Governor Jim Pillen signed into law legislation requiring kiosk operators to be licensed and make adequate disclosures to customers including warnings about crypto fraud. The law was passed after the U.S. Federal Trade Commission pointed out in a September report that there has been a massive increase in consumer losses due to scams involving Bitcoin ATMs. The Block.

INTERNATIONAL

Japanese Ruling Party Considers Slashing Crypto Capital Gains Tax Rate
On March 6, Japan’s ruling Liberal Democratic Party (LDP) proposed reducing the crypto capital-gains tax rate from a maximum of 55% to 20% and is seeking public feedback until March 31. The proposal aims to reclassify cryptocurrencies as “financial products” under a new regulatory framework, which would introduce a separate 20% tax rate similar to securities investments. The LDP’s proposal also includes deferring taxes on crypto-to-crypto swaps until the crypto is exchanged for fiat currency. CoinTelegraph; The Block.
South Korea Plans to Publish Institutional Cryptocurrency Investment Guideline
On March 12, following its statement in January that it would gradually lift the de facto ban on institutional investment in cryptocurrencies, the Financial Services Commission (FSC) of South Korea announced its plan to issue a two-phase guideline. The first part will be released in April to establish the framework and address anti-money-laundering issues. The second part, scheduled in the third quarter, will cover comprehensive instructions for public companies and professional investors. Coin Edition; The Block; Binance.
Bank of Russia Submits Proposal to Allow Cryptocurrency Investment by Selected Investors
On March 12, the Bank of Russia announced a proposal to allow “limited circle of Russian Investors” to trade cryptocurrency under a special experimental legal regime for three years, despite the country’s current ban on cryptocurrency to be used as payments. Eligible investors include those with securities and deposits exceeding 100 million rubles ($1.14 million) or with income for the past year exceeding 50 million rubles ($570K). Yahoo Finance; CoinTelegraph.
Dubai Financial Services Authority Seeks Expressions of Interest for Tokenization Regulatory Sandbox
On March 17, the Dubai Financial Services Authority invited firms to express interest in participating in its Tokenization Regulatory Sandbox, with submissions due by 24 April 2025. The initiative, part of the DFSA’s Innovation Testing Licence program, allows firms to test tokenized investment products and services in a controlled environment. The sandbox aims to facilitate a regulatory pathway from experimentation to full authorization. DFSA.
Dubai Virtual Assets Regulatory Authority Issues Reminder on AML/CFT Compliance for Virtual Asset Service Providers
On February 25, the Dubai Virtual Assets Regulatory Authority issued a compliance reminder to cryptocurrency companies in Dubai, including those operating in mainland and free zones, reminding them of their obligations under the UAE’s anti-money-laundering and combating the financing of terrorism framework. The circular also included a reminder for VASPs to adhere to the Travel Rule for transfers exceeding AED 3,500, ensuring that originator and beneficiary information is obtained, stored, and made available upon request. VARA.
EU Commission Publishes Regulations on Notification of Intention to Provide Crypto-Asset Services Under Markets in Crypto-Asset Regulations
On February 20, the EU Commission published two regulations to supplement the Regulation on Markets in Crypto-Assets ((EU) 2023/1114) (MiCA) in the Official Journal of the European Union. Regulation 2025/303 supplements MiCA by specifying the information to be included by certain financial entities in the notification of their intention to provide crypto-asset services, while Regulation 2025/304 supplements MiCA by laying down implementing technical standards with regard to standard forms, templates and procedures for the notification by certain financial entities of their intention to provide crypto-asset services. Both regulations came into force on March 12. Commission Delegated Regulation (EU) 2025/303; Commission Implementing Regulation (EU) 2025/304.
European Securities and Markets Authority Publishes Official Translations of its Guidelines on the Procedures and Policies Applicable to Transfer Services for Crypto-Assets
On February 26, the European Securities and Markets Authority (ESMA) published the official translations of its guidelines on the procedures and policies in the context of transfer services for crypto-assets. The guidelines apply to competent authorities and to crypto-asset service providers that provide transfer services for crypto-assets on behalf of clients within the meaning of Article 3(1)(26) of MiCA. They are intended to establish consistent, efficient and effective supervisory practices and to ensure the common, uniform and consistent application of the provisions in Article 82 of MiCA. The guidelines apply from 27 April 2025 (that is, 60 calendar days after the date of publication of the official translations on ESMA’s website). ESMA.
Monetary Authority of Singapore Responds to Parliamentary Question on Tightening of Regulations for Digital Payment Token Service Providers
On March 5, the Monetary Authority of Singapore (MAS) responded to a Parliamentary Question on the Singapore Government’s key considerations in deciding to tighten regulations for Digital Payment Token Service Providers including the prohibition of payments via locally issued credit cards. Minister of State Alvin Tan, speaking on behalf of Deputy Prime Minister and Chairman of the MAS, Gan Kim Yong, noted in his response that MAS continues to view cryptocurrencies as highly volatile and unsuitable for the general public. Using credit cards to buy them can lead to high-interest debt and compounded losses, therefore MAS prohibits digital payment token service providers from offering credit or leverage to retail customers. MAS Oral Reply.

CIVIL LITIGATION

UNITED STATES

Treasury Lifts Sanctions Against Tornado Cash
On March 21, the Department of Treasury removed the economic sanctions against Tornado Cash. Treasury soon filed a notice requesting briefing on mootness in Van Loon v. Department of the Treasury, which is on remand after the Fifth Circuit held that Treasury exceeded its statutory authority in designating Tornado Cash. On March 24, the plaintiffs responded, arguing the case is not moot and asking the court to enter final judgment. August 2022 Press Release; March 2025 Press Release; Treasury Notice; Plaintiff Response; CoinTelegraph.
Delaware Bankruptcy Court Grants Three Arrows Capital’s Amended $1.5B Claim in FTX Bankruptcy
On March 13, Judge John T. Dorsey held that liquidators for hedge fund Three Arrows Capital could amend its original complaint to bring a $1.53 billion bankruptcy claim in the FTX Trading Ltd. bankruptcy, over the objection of FTX. The Court held that the Three Arrows Capital liquidators did not learn until more than a year after filing the initial claim in June 2023 that Three Arrows had $1.53 billion in assets on the FTX platform. Because their initial claim was based on limited information, the liquidators were within their rights to amend the claim once more details became available. Opinion; Law360.
Western District of Texas Enters Default Judgment a gainst Bancor DAO
On March 13, Judge Robert Pitman of the Western District of Texas issued a default judgment against Bancor DAO, which operates the decentralized finance platform Bancor, after it failed to respond to a January 2024 online summons. The default judgment stems from a class-action lawsuit involving investors’ claims that they lost tens of millions of dollars due to Bancor’s allegedly failure to warn about liquidity issues during a 2022 withdrawal spike and its allegedly deceptive practices regarding claims that Bancor’s token was an unregistered security. CoinTelegraph; Law360.

SPEAKER’S CORNER

UNITED STATES

SEC Moves Quickly to Remake Crypto Policy
The SEC is actively working with the crypto industry to develop policy for overseeing digital-asset transactions. At the agency’s first crypto-focused roundtable on March 21, SEC commissioners assured attendees they are “earnestly” seeking to find a “workable framework.” The panel featured industry advocates and critics. Commissioner Hester Peirce indicated that non-fungible tokens may be the subject of the SEC’s next staff statement. On March 25, SEC announced four more roundtables between April to June, covering topics including crypto-trading regulation, crypto custody, tokenization and DeFi. All roundtables will be open to the public. Coindesk; Press Release.
OCC Chief Voices Opposition to Debanking and Support to Crypto and Fintech
On March 18, at the Consumer Bankers Association’s annual conference, the acting chief of the OCC, Rodney Hood, expressed his opposition to debanking and emphasized his commitment to reduce regulatory burdens on community banks, foster financial inclusion, and promote bank-fintech collaboration. Hood believes all customers should have fair access to financial services, including digital assets. According to Hood, the OCC will not interfere with bank’s account decisions or create hurdles to discourage banks from creating accounts with individualized risks. This signals a shift of OCC regulatory priorities since the new administration, as regulators used to caution banks against involving with cryptocurrency during the last administration. Law360.

OTHER NOTABLE NEWS

Crypto Leaders Meet at White House for First-of-its-Kind Crypto Summit
On March 7, President Donald Trump hosted the first “crypto summit” at the White House, gathering over two dozen leaders from the U.S. cryptocurrency industry. In the remarks given at the summit, President Trump reaffirmed his support for the growth of the crypto industry and emphasized that the United States should “stay in the front of this one” to secure its leading role in the global financial system. President Remarks; Reuters.
Ripple-Funded Non-Profit Launches
On March 5, the National Cryptocurrency Association (NCA), a new non-profit organization aimed at enhancing crypto literacy launched. NCA was seeded with $50 million in funding from Ripple and Ripple CLO, Stuart Alderoty, and aims to demystify cryptocurrency and provide resources for users, including educational materials and real-life stories. Business Wire; CoinDesk.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Kendall Day, Jeff Steiner, Sara Weed, Sam Raymond, Nick Harper, Raquel Alexa Sghiatti, Simon Moskovitz, Apratim Vidyarthi, and Gabriela Li.

FinTech and Digital Assets Group Leaders / Members:

Ashlie Beringer, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (+1 202.955.8256, mbopp@gibsondunn.com

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ella Alves Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Sébastien Evrard, Hong Kong (+852 2214 3798, sevrard@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)

Martin A. Hewett, Washington, D.C. (+1 202.955.8207, mhewett@gibsondunn.com)

Sameera Kimatrai, Dubai (+971 4 318 4616, skimatrai@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Stewart McDowell, San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Hagen H. Rooke, Singapore (+65 6507 3620, hhrooke@gibsondunn.com)

Mark K. Schonfeld, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Orin Snyder, New York (+1 212.351.2400, osnyder@gibsondunn.com)

Ro Spaziani, New York (+1 212.351.6255, rspaziani@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Eric D. Vandevelde, Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Benjamin Wagner, Palo Alto (+1 650.849.5395, bwagner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

Digital Assets Recent Updates – March 2025

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