Among the biggest news that dropped in the past two weeks was the Trump administration’s announcement of a national Bitcoin reserve plan, a move whose mere discussion marks a significant shift from the federal government’s previous stance on digital assets and crypto. The SEC has continued its trend of closing non-fraud-related investigations and enforcement actions, providing some long-awaited relief for the industry. On the litigation front, Uniswap secured a key victory at the Second Circuit against the SEC, marking another win for DeFi. Meanwhile, the SEC continues to make waves with its statement on memecoins, asserting that the tokens themselves are not securities in many contexts unless tied to an investment contract. This statement has sparked widespread debate and heightened expectations for further developments and related classifications in the coming weeks.

These developments and a few other brief notes are discussed below.

National Bitcoin Reserve Plan Announced: March 6, 2025

Background: After a few weeks of teasing it, President Trump has released his Executive Order establishing a Strategic Bitcoin Reserve and Digital Asset Stockpile capitalized with digital assets that were forfeited as part of criminal or civil asset forfeiture. On the day the Executive Order was signed, Crypto/AI Czar David Sacks released a statement on social media that under prior administrations (which includes Trump’s first term) “the federal government sold approximately 195,000 bitcoin for proceeds of $366 million. If the government had held the bitcoin, it would be worth over $17 billion today.”

Analysis: In practice, this order primarily directs federal agencies to account for and retain, rather than sell, digital assets, seized digital assets—a move that, while noteworthy, is not particularly groundbreaking. There was some interesting text in the Order about it being a "strategic advantage" to be among the first nations to create a bitcoin reserve due to its limited supply. However, beyond this symbolic step, it does little to shift the broader landscape. That said, the absence of federal government sell pressure for the next four years is a welcome development for Bitcoin markets.

More SEC Investigations and Cases Dropped: March 3, 2025

Background: The creators of Bored Ape Yacht Club NFTs and related products, Yuga Labs, have announced the SEC has closed its investigation into the company, stating on X (formally Twitter), “NFTs are not securities.” At the same time, the SEC appears to have reached an agreement with Kraken to drop its pending case against the second largest digital asset exchange in the U.S. This leaves only the Ripple and PulseChain lawsuits still active, with the Cumberland DRW case dismissed while we were finalizing this update, highlighting just how quickly things are changing. The PulseChain case, meanwhile, is effectively dead if the jurisdiction dismissal holds up.

Analysis: While it remains unclear how Ripple and the SEC can coordinate a dismissal at this stage in the appeal process, with nearly every other non-fraud case either closed or in the process of closing, it is reasonable to assume that this case is also likely to wind down or end in the near future. While fraud cases will continue and new cases may emerge, it is highly unlikely that we will see new non-fraud enforcement actions related to failure-to-register as a security until clearer regulatory rules are established. The substantial costs and uncertainty these cases have imposed on the industry make their resolution a much-needed reprieve.

Uniswap Wins with the SEC and at the Second Circuit: February 25, 2025

Background: The SEC’s Enforcement Division issued a Wells notice to Uniswap in April of last year, signaling its intention to recommend enforcement action against the decentralized exchange. Last week, Uniswap announced that it has been informed that the SEC has officially closed its investigation with no further action. In the same week, the Second Circuit upheld the dismissal of a civil securities class action filed against Uniswap.

Analysis: The closure of the SEC’s investigation into Uniswap follows similar decisions regarding the NFT platform OpenSea and the online exchange Robinhood. The ruling in the Second Circuit, meanwhile, is seen as a broader win for DeFi, holding that social media posts about the security of the platform and transactions executed via its smart contracts do not make its developers statutory sellers or solicitors of securities transactions. Combined with the SEC dropping its case against Consensys over the Metamask wallet swapping and staking functionalities (which facilitate transactions with third-party DeFi providers), DeFi had a strong week—despite market-wide token price declines.

SEC Stays Busy with Flurry of Developments: February 26, 2025

Background: In addition to the Uniswap and Consensys closures noted above, the SEC also has called off its investigation into the Winklevoss-backed platform Gemini. It also acknowledged 4 crypto ETFs, released a Staff Statement on Memecoins, had six Crypto Task Force meetings, released Commissioner Peirce’s statement on litigation by enforcement, and two statements from Commissioner Crenshaw decrying recent Agency actions.

Analysis: It is hard to imagine all of this would be happening so quickly if there wasn’t unofficial buy-in from the likely future Chair of the SEC, Paul Atkins. The biggest development by far was the statement on memecoins, which is seemingly an official shift in the SEC’s interpretation of the Howey test as well as an official statement that the tokens themselves aren’t securities in certain situations and need a separate investment contract, which is basically the exact opposite position the SEC took in LBRY and Kik. 

Briefly Noted:

OCC Permits Banks to Engage in Cryptocurrency Activities: The Office of the Comptroller of the Currency (OCC) has issued Interpretive Letter 1183, clarifying that national banks and federal savings associations can engage in cryptocurrency-related activities, including custody services and certain stablecoin operations, without needing prior regulatory approval. This marks a significant policy shift, removing previous barriers for banks offering crypto services.

White House Crypto Summit: The White House hosted a summit of leaders in the crypto industry. While not much in terms of developments came from that meeting, it is nice to see this level of interaction between government officials and industry leaders.

Richard Heart Beats SEC: It looks like the court overseeing the Richard Heart/Hex/PulseChain case has agreed that his interactions with the U.S. were not sufficient to create specific jurisdiction or satisfy what is required for application of U.S. securities laws to his (alleged) conduct.

OKX Exchange Settles with DOJ: OKX has agreed to pay over $500 million for serving as an unregistered money transmitter for U.S. customers from 2018 until 2024.

ByBit Hack Developments: There appears to be conflicting information on whether Bybit had its own systems compromised or if the breach was solely due to a hack of its SAFE multi-sig provider. The attack resulted in significant fund losses, though the full extent is still being assessed. Notably, the founder gave a full 1-hour interview in the days following the incident—an unusual level of transparency in the aftermath of a major security breach and possibly even a level of pretty radical transparency.

Senate Banking Hearing on Digital Asset Legal Framework: The Senate Banking Subcommittee on Digital Assets held a hearing titled Exploring Bipartisan Legislative Frameworks for Digital Assets, demonstrating that lawmakers are following through on their commitment to prioritize the fast-tracking of digital asset regulations in the coming months.

Senate Passes CRA to Overturn IRS Crypto Broker Rule: In a strong bipartisan move, the Senate passed a 70-28 resolution to overturn a controversial tax reporting rule enacted in the final days of the previous administration. This rule would have broadly classified internet service providers as brokers, requiring them to collect tax information, including Social Security numbers, from users. President Trump has already stated that he will sign this resolution into law if and when it passes in the House. If enacted, this legislation will prevent the IRS from reintroducing similar tax reporting requirements in the future without Congressional approval.

SEC Sets First Crypto Roundtable: The SEC is set to host their first roundtable for the crypto task force, conveniently scheduled for the Friday before the D.C. Blockchain Summit. The SEC also named a number of industry veterans as the staff of its Crypto Task Force, with a promising sign that those with hands-on experience in the space will have a role in shaping policy.

Bi-Partisan “Congressional Crypto Caucus” Formed: Republican House Majority Whip Tom Emmer and Democrat Ritchie Torres are creating a “Congressional Crypto Caucus,” which is intended to create a unified and bipartisan coalition to spearhead bills that support the growth of digital assets in America.

Senate Bill to Stop Chokepoint 3.0: The chair of the Senate Finance Committee is proposing a bill that eliminates “reputational risk” as a component of the supervision of depository institutions after it was used to debank unfavored industries in Operation Chokepoint and Chokepoint 2.0.

Houlihan Capital Issues Q4 2024 Crypto Market & VC Industry Report: Houlihan Capital released its latest report analyzing crypto market trends, venture capital deal activity and sector performance. A key takeaway is that while early-stage investments slowed, later-stage crypto deals saw an uptick, reflecting growing investor confidence in established blockchain projects.

Crypto Market Sees Price Declines, Over the past two weeks, Bitcoin (BTC) dropped about 21% to $78,000, while Ethereum (ETH) fell nearly 15% to $1,873. Despite prices still being much higher than six months ago, the decline suggests that crypto remains viewed as a high-risk asset rather than a hedge like gold, reflecting its continued correlation with equities.

Conclusion:

Although the current iteration of the national Bitcoin reserve strategy is quite limited—essentially just preventing the federal government from selling Bitcoin it otherwise would have—it is symbolically significant and has the potential to evolve into something much more impactful. The SEC appears to be following through on its commitment to wind down non-fraud-related litigations and investigations, providing some regulatory relief for the industry. Beyond the SEC, Congress has been increasingly active in exploring and advancing crypto-related legislation and regulatory frameworks, further intensifying focus on the industry.