Blockchain and Digital Assets News and Trends – June 2025

[co-author: Leila Laoufi]

This periodic bulletin is designed to help companies identify important legal developments governing the use and acceptance of blockchain technology, smart contracts, and digital assets.

While the use cases for blockchain technology are vast, this bulletin focuses on uses of blockchain and smart contracts in the financial services sector. With respect to digital assets, we have organized our approach to this topic by discussing them in terms of traditional asset type or function (although the types and functions may overlap) – that is, digital assets as:

• Securities
• Virtual currencies
• Commodities
• Deposits, accounts, intangibles
• Negotiable instruments
• Electronic chattel paper
• Digitized assets

In addition to reporting on the law and regulation governing blockchain, smart contracts, and digital assets, this bulletin will discuss the legal developments supporting the infrastructure and ecosystems that enable the use and acceptance of these new technologies.

INSIGHT

SEC staff concludes protocol staking activities on proof-of-stake networks are not securities

By Eric Forni, Michael Fluhr, Eric Hall

On May 29, 2025, the Division of Corporation Finance of the US Securities and Exchange Commission (SEC) issued a statement clarifying its views on the application of federal securities laws to certain proof-of-stake (PoS) blockchain protocol staking activities. The statement specifically addresses the federal regulatory treatment of staking activities for crypto assets that are integral to the operation and security of public, permissionless PoS networks, referred to as “Covered Crypto Assets.”

STATUTORY AND AGENCY DEVELOPMENTS

FEDERAL DEVELOPMENTS

Congress

• Senate passes the GENIUS Act. On June 17, the Senate voted to pass the GENIUS Act, which would establish the first federal licensing framework for stablecoin issuers. The bill incorporates 130 amendments and now must go to conferencing with the House’s STABLE Act. If reconciled and signed into law, the GENIUS Act would establish comprehensive stablecoin oversight.

DOL

• DOL rescinds 2022 guidance discouraging cryptocurrency in 401(k) plans. On May 28, the US Department of Labor (DOL)’s Employee Benefits Security Administration announced the rescission of its 2022 compliance release that had previously discouraged fiduciaries from including cryptocurrency options in 401(k) retirement plans. The 2022 guidance had instructed plan fiduciaries to exercise “extreme care” before adding cryptocurrency to investment menus, which purportedly represented a departure from the department’s historically neutral, principles-based approach to fiduciary investment decisions under the Employee Retirement Income Security Act. According to the press release, the rescission reaffirms the DOL’s neutral stance, clarifying that it neither endorses nor disapproves of plan fiduciaries who determine that including cryptocurrency in a plan’s investment menu is appropriate. In a statement, Secretary of Labor Lori Chavez-DeRemer said that investment decisions should be made by fiduciaries, “not DC bureaucrats.”

SEC

• SEC Chair Paul Atkins calls for an “innovation exemption” framework to foster DeFi development. On June 9, SEC Chair Paul Atkins announced that he had directed SEC staff to consider a “conditional exemptive relief framework” for digital asset participants to “bring on-chain products and services to market.” The announcement capped Chair Atkin’s remarks at an event titled “DeFi and the American Spirit,” the last in a series of five SEC-hosted roundtable discussions on cryptocurrency policy. Chair Atkins also applauded the SEC’s Division of Corporate Finance for their recent policy statements on mining and staking participation, and expressed his view that the “right to have self-custody of one’s private property is a foundational American value that should not disappear when one logs onto the internet.” Echoing this idea, SEC Commissioner Hester Peirce’s remarks suggested that DeFi resonates with the American spirit because it enables “the freedom to transact with your peers” without intermediaries. She cautioned, however, that crypto services could not avoid regulation by being “DeFi in name only,” implying that developers who “operate, administer, or maintain a platform” while taking “custody of client assets” or making “execution decisions for clients” would still be subject to SEC registration requirements. Commissioner Caroline Crenshaw likewise adopted a cautionary tone with her remarks, noting that the immense variability in crypto services presents a complex challenge for SEC regulation, and any changes should therefore undergo full notice-and-comment rulemaking.

IRS

• IRS extends transitional relief for brokers required to report digital asset transactions. On June 12, the Internal Revenue Service (IRS) announced that will extend transitional relief for brokers who would otherwise be required to report digital asset sale and exchange transactions on Form 1099-DA, furnish payee statements, and backup withhold on certain transactions. Under the final rule published in July 2024 (that we reported on here), a broadly defined category of “brokers” would have been required to perform these requirements starting January 2025. At the time, the IRS announced that penalties for reporting or backup withholding failures would be suspended for transactions during the 2025 calendar year. The IRS then extended this relief from backup withholding through 2026. The most recent notice further extends this relief for transactions in 2027, provided brokers supply the IRS with the payee’s name and tax identification number. Notably, the final rule would only apply to centralized exchange brokers. As we reported in our March 2025 issue, Congress repealed the portions of the rule that would have applied to DeFi protocols and operators.

Federal Reserve

• Federal Reserve report finds slight increase in American household ownership of cryptocurrency. On June 12, the Federal Reserve published its Report on the Economic Well-Being of U.S. Households in 2024 – May 2025, based on the results of its 2024 Survey of Household Economics and Decisionmaking (SHED). The report concluded that only 8 percent of US households own cryptocurrencies. While that figure represents a 1-percent increase over 2023, it is lower than the 12 percent reported in 2021. Of those households that own cryptocurrency, the report found that the majority treat it as an investment asset, while only 2 percent of surveyed adults report using cryptocurrency to make a financial transaction.

STATE DEVELOPMENTS

UCC Article 12

• Florida also adopts UCC Article 12 on controllable electronic records. Florida Governor Ron DeSantis signed HB 515 on May 23, enabling Florida to join the other 28 states and the District of Columbia in adopting the 2022 Amendments to the Uniform Commercial Code (UCC), including Article 12 governing property rights of intangible digital assets as Controllable Electronic Records (CERs). HB515 defines the term "electronic money" as "money in electronic form" and excludes central bank digital currency and "money in electronic form that cannot be subjected to control" from the definition of "money." For more information on CERs under UCC Article 12, see our prior articles from May 2023, July 2023, January 2025, and May 2025.

Digital assets

• Wyoming partners with private industry to issue state-sponsored stablecoin. On May 12, the Wyoming Stable Token Commission announced a strategic partnership with Inca Digital Federal LLC, a blockchain market intelligence and risk analytics company to support the launch of the Wyoming Stable Token (WYST). The Commission was tasked by the Wyoming Stable Token Act to issue WYST backed by US Treasuries, cash, and repurchase agreements. WYST is targeted to launch in July 2025.
• States regulate cryptocurrency kiosks. Both Iowa and Arizona adopted regulations for digital asset kiosks.

• Iowa: On May 14, Iowa Governor Kim Reynolds signed SF 449, which takes effect immediately and applies to kiosk operators from July 1, 2025. The new law sets forth requirements for daily transaction limits, maximum charges, and mandatory consumer disclosures. Operators must also issue receipts for all transactions, maintain compliance and anti-fraud policies, designate a compliance officer, and ensure customer service availability. The law provides penalties for violations, empowering the Attorney General with enforcement.
• Arizona: On May 12, Arizona Governor Katie Hobbs signed HB 2387, modifying Arizona money transmission laws to regulate cryptocurrency kiosks. The new law requires kiosk operators to provide clear and conspicuous disclosures of terms and conditions in the language of the customer, and to receive an acknowledgment of receipt of such disclosures. Operators must also issue receipts, implement fraud prevention measures, and maintain 24/7 customer service. The law also sets transaction limits and stipulates that victims of fraud are eligible for refunds, even if disclosures were provided.

• Connecticut prohibits state and local government investment in crypto. On June 10, the state of Connecticut enacted HB7082 which, in part, prohibits the state and all state political subdivisions from accepting or requiring payment in the form of virtual currency or purchasing, holding, investing in, or establishing a reserve of virtual currency. The bill passed unanimously after amendment.
• California DFPI deals with funding shortage. The California Department of Financial Protection and Innovation (DFPI), the regulator that will oversee California's new Digital Financial Assets Law (DFAL), is confronting a projected $193 million funding shortage for multiple programs, including the new cryptocurrency framework, amid reports that the DFPI “has made significant progress and continues to expand its efforts to protect consumers and foster trust and responsible innovation in the financial marketplace.” According to a report from the California Legislative Analyst’s Office, a DFPI fund condition report provided to the Legislature in February indicates that the DFPI fund “will become insolvent toward the end of 2025-26” and face growing deficits in future years. The implementation date for the DFAL has already been postponed to July 1, 2026, and lawmakers are reportedly now considering fee increases on financial firms to cover the deficit. While the DFPI works on rules that will implement the licensing process under the DFAL, a separate legislative bill, SB 97, has passed the state Senate to provide more regulatory clarity by exempting most video game currencies and clarifying the scope of licensure for those involved in digital asset operations. This bill will also provide the DFPI more flexibility to approve the issuance of stablecoins.

ENFORCEMENT ACTIONS AND LITIGATION

FEDERAL

Securities

• Gotbit and founder sentenced for cryptocurrency market manipulation. On June 13, the US Attorney’s Office for the District of Massachusetts announced the sentencing of Gotbit Consulting LLC, a cryptocurrency market maker, and its founder Aleksei Andriunin, for engaging in fraudulent market manipulation. Gotbit and its leadership were found guilty of conducting wash trading – artificially inflating trading volumes and prices for client cryptocurrencies such as Robo Inu and Saitama – between 2018 and 2024, with the intent to deceive investors and secure listings on major platforms. Andriunin was sentenced to eight months in prison and one year of supervised release, while Gotbit was ordered to forfeit approximately $23 million in cryptocurrency and cease operations for five years.
• SEC charges Unicoin and executives with fraudulent crypto offerings. On May 20, the SEC announced charges against Unicoin, Inc. and several top executives, including CEO Alex Konanykhin, Silvina Moschini, and Alex Dominguez, for securities fraud related to the offering of rights certificates and Unicoin tokens, which were promoted as asset-backed crypto assets. According to the complaint, Unicoin and its executives allegedly misled more than 5,000 investors by falsely claiming that the Unicoin tokens were backed by billions of dollars in real estate and equity interests, when in reality the company’s assets were worth only a fraction of that amount. The company also allegedly misrepresented that its rights certificates and tokens were SEC-registered and claimed to have sold over $3 billion in certificates, while actual sales never exceeded $110 million. The SEC’s complaint seeks injunctive relief, disgorgement, civil penalties, and officer-and-director bars against the involved individuals, and also charges Unicoin’s general counsel, Richard Devlin, for negligently making similar misstatements in private placement documents. Delvin consented to the judgment and agreed to pay $37,500 in civil penalties.
• SEC dismisses charges of unregistered offering of tokens. On May 2, the SEC announced the filing of a joint stipulation with Ian Balina to dismiss, with prejudice, the SEC’s civil enforcement action which alleged that Balina conducted an unregistered offering of crypto asset securities by offering and selling SPRK Tokens as securities in unregistered transactions, violating sections 5(a) and 5(c) of the Securities Act of 1933. According to the announcement, “[t]he Commission’s decision to exercise its discretion and dismiss this pending enforcement action rests on its judgment that the dismissal will facilitate the Commission’s ongoing efforts to reform and renew its regulatory approach to the crypto industry, not on any assessment of the merits of the claims alleged in the action.”
• New York Supreme Court declines to dismiss case alleging crypto “earn” program is a security. In People v. Gemini Trust Co., LLC, et al., (2025 NY Misc LEXIS 2293), a New York Supreme Court recently denied a motion to dismiss an action by the New York State Attorney General against Digital Currency Group Inc. (DCG) and certain individuals. The case concerns an “earn” program, under which a former defendant cryptocurrency exchange partnered with DCG’s subsidiary – former defendant Genesis Global Capital – to lend customer deposits and provide returns to the customers from the lending proceeds. A large Genesis borrower defaulted, leaving Genesis unable to return exchange customer deposits. The state Attorney General brought an action against DCG and others under General Business Law (GBL) Article 23-A (the Martin Act) and New York Executive Law section 63, alleging that former defendants and DCG conspired to conceal the “structural hole” created by the default.
  
  DCG filed a motion to dismiss, which the court granted in part and denied in part. First, the court rejected DCG’s argument that the “earn” product falls outside the definition of security, requiring dismissal of the Martin Act claims. Applying the federal Howey test, the court reasoned that exchange customers invested in a common lending enterprise, from which they derived profits. The court noted Genesis’s discretion in selecting the types of cryptocurrencies it would borrow, the yield it paid, and how it would deploy the borrowed assets. Second, the court rejected the defendants’ arguments that the state Attorney General had failed to plead fraud with specificity, reasoning that the state had sufficiently alleged defendants publicly misrepresented Genesis’s solvency in light of its large borrower’s default. Third, the court dismissed Executive Act claims based on alleged Penal Law violations as duplicative of the claims above.

OFAC

• OFAC sanctions computing company for support of virtual currency scams. On May 29, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against Funnull Technology Inc., a Philippines-based company that provides computer infrastructure for “hundreds of thousands of websites involved in virtual currency investment scams, commonly known as pig butchering,” along with its administrator, Liu Lizhi. OFAC asserts that “Funnull directly facilitated several of these schemes, resulting in over $200 million in U.S. victim-reported losses,” “by purchasing IP addresses in bulk from major cloud services companies worldwide and selling them to cybercriminals to host scam platforms and other malicious web content.” In connection with sanctions, OFAC added Funnell and its administrator to the OFAC specially designated nationals (SDN) list.

Fraud

• New York man charged with defrauding investors in sham blockchain startup. On May 21, the US Attorney’s Office for the Southern District of New York announced that it had indicted Jeremy Jordan-Jones for allegedly orchestrating a fraudulent scheme involving a purported blockchain technology company, Amalgam Capital Ventures. According to the indictment, Jordan-Jones misled investors by falsely claiming that Amalgam had developed functional blockchain-based payment and security solutions, secured high-profile partnerships, and was financially successful. He further deceived investors by stating their funds would be used for listing a proprietary cryptocurrency coin on global exchanges and for legitimate business expenses, when in reality, Amalgam had no operable products or real partnerships. Instead, Jordan-Jones misappropriated over $1 million for personal use, and the company ultimately shut down. He faces charges of wire fraud, securities fraud, making false statements to a bank, and aggravated identity theft.

Money laundering

• SafeMoon founder convicted for conspiracy to commit securities fraud, wire fraud, and money laundering. On May 21, the IRS and US Attorney’s Office for the Eastern District of New York announced that Brand Karony, CEO of digital asset company SafeMoon LLC, had been convicted on a three-count indictment, charging him with conspiracy to commit securities fraud, wire fraud, and money laundering. The court found Karony lied to investors claiming that neither he nor other SafeMoon executives could access SafeMoon liquidity pools while, in reality, Karony misappropriated millions of dollars to buy himself multiple homes, sports cars, and other luxury goods. The conviction was the result of a joint effort between the Federal Bureau of Investigation (FBI), the IRS, and the IRS’s Australian, Canadian, Dutch, and UK counterparts.
• Vending machine operator sentenced for Bitcoin money laundering scheme. On May 22, the IRS announced that a federal court had sentenced Trung Nguyen to six years in prison for operating a “no questions asked” Bitcoin-for-cash business posing as a vending machine company. According to the press release, Nguyen converted more than $1 million in cash to Bitcoin, and accepted hundreds of thousands of dollars’ worth of Bitcoin stolen from victims of romance scams.
• DOJ charges Russian citizen residing in New York with money laundering. On June 9, the US Department of Justice (DOJ) announced unsealing of a 22-count indictment charging Iurii Gugnin, also known as Iurii Mashukov and George Goognin, with offenses related to the use of his cryptocurrency company Evita “to funnel more than $500 million of overseas payments through US banks and cryptocurrency exchanges… to aid sanctioned Russian banks and help Russian end-users acquire sensitive US technology.” The DOJ alleges Gugnin, the founder, President, Treasurer, and Compliance Officer of Evita Investments Inc. and Evita Pay Inc., enabled foreign customers holding funds at sanctioned Russian banks to provide him with cryptocurrency, which he then laundered through US bank accounts – converting the funds into US dollars or other fiat currency. Charges include wire and bank fraud, evading sanctions and export controls, defrauding financial institutions, operating an unlicensed money transmitting business, money laundering, and violating the Bank Secrecy Act.

Commodities

• Federal court overturns jury conviction of Mango Markets trader for fraud. On May 23, the US District Court for the Southern District of New York granted Avraham Eisenberg’s motion for acquittal, overturning the jury’s conviction of Eisenberg for commodities fraud, commodities manipulation, and wire fraud related to his trading scheme involving Mango Markets, a cryptocurrency exchange. The case alleged Eisenberg manipulated the price of the MNGO token to fraudulently withdraw more than $100 million in cryptocurrency. The court found that the government had not sufficiently linked Eisenberg’s manipulative trading conduct to New York and had failed to prove a false statement to support a conviction for wire fraud, vacating counts one and two for lack of venue, and entering a judgment of acquittal on count three for fraud.
• Federal court orders over $25 million in penalties and restitution for digital asset fraud involving My Big Coin. On June 11, the Commodity Futures Trading Commission (CFTC) announced that the US District Court for the District of Massachusetts entered a final default judgment against Mark Gillespie, John Roche, My Big Coin Pay, Inc., and My Big Coin, Inc., requiring them to pay over $25 million in civil penalties and restitution for their roles in a fraudulent digital asset scheme. The court found that from January 2014 through June 2017, the defendants defrauded at least 28 customers of more than $6 million by falsely representing the value, backing, and functionality of the virtual currency “My Big Coin,” which was marketed as a fully functioning digital asset and purportedly backed by gold. The order also imposes permanent bans on trading and registration with the CFTC. Parallel criminal proceedings resulted in Crater being convicted and sentenced to prison for related offenses, including wire fraud and operating an unlicensed money transmitting business.

DOJ

• Five plead guilty in $36.9 million international digital asset scam. On June 9, the DOJ announced that five defendants had pleaded guilty to laundering over $36.9 million from victims of an international digital asset investment scam that operated from Cambodia. The scheme involved inducing US victims to invest in fraudulent digital asset opportunities, and then laundering the proceeds through US shell companies, international bank accounts, and digital asset wallets. Victim funds were ultimately transferred to a Deltec Bank account in the Bahamas, converted to the stablecoin Tether (USDT), and sent to digital wallets controlled by individuals in Cambodia, where the funds were further distributed to scam centers. The defendants played various roles in managing the laundering operations, including opening bank accounts, registering shell companies, and directing digital asset conversions. Several co-conspirators have also pleaded guilty, and the case involves ongoing investigations by multiple US and international law enforcement agencies.
• DOJ seeks forfeiture of $7.74 million in cryptocurrency linked to North Korean sanctions evasion. On June 5, the DOJ announced it had filed a civil forfeiture complaint to seize over $7.74 million in cryptocurrency allegedly laundered on behalf of the North Korean government. According to the DOJ, North Korean IT workers, using fraudulent identities, allegedly obtained illegal remote employment with US and international companies, generating revenue that was paid in digital assets, such as stablecoins USDC and USDT. These workers used sophisticated money laundering techniques – including setting up accounts with fictitious identities, moving funds in small increments, chain hopping, token swapping, purchasing NFTs, and commingling proceeds – to obscure the origin of the funds and transfer them back to North Korea, circumventing US sanctions. The scheme involved sanctioned entities Sim Hyon Sop, Kim Sang Man, and the Chinyong IT Cooperation Company, all of whom are linked to North Korea’s Ministry of Defense and appear on the OFAC’s SDN list. The forfeiture action is part of ongoing efforts to disrupt North Korea’s use of the cryptocurrency ecosystem to fund its weapons program and evade international sanctions.

DAOs

• Case dismissed against DAO due to lack of jurisdiction. In the case of Carbone v. Kaal 2025 U.S.App. LEXIS 15258 (6th Cir. Ct.App. June 20, 2025), plaintiff Robert Carbone, a Connecticut resident, brought suit against two DAOs and several managing DAO members, alleging that they removed him from the DAO based on false allegations of sexual misconduct. Plaintiff asserted claims for defamation, tortious interference, breach of fiduciary duty, and negligent misrepresentation and filed the lawsuit in the US District Court for the Southern District of Ohio, claiming that the DAOs used certain web servers located in Ohio to circulate the allegedly defamatory statements. Plaintiff did not allege that he or any defendant lived in or visited Ohio.

  On defendants’ motion, the trial court dismissed for lack of personal jurisdiction, and the Sixth Circuit affirmed, finding that plaintiff failed to allege facts sufficient to show that defendants purposefully availed themselves of the privileges of conducting business in Ohio such as to have expected suit there. The court reasoned that plaintiffs had not alleged that defendants visited Ohio, contacted anyone there, targeted Ohio residents, or more generally made Ohio a “focal point” of the harm suffered. The court further noted that the arbitrary location of web servers had “little, if any, effect in Ohio,” and that the server location was chosen by defendants’ contractor, not defendants.

STATES

• Alabama Securities Commission continues enforcement. On June 13, the Alabama Securities Commission announced that it was able to locate and seize more than $127,000 of funds lost by state residents to online cryptocurrency pig butchering scams.

SPOTLIGHT ON INTERNATIONAL DEVELOPMENTS

• What is an asset-reference token? Lessons from the Ethena case. Regulation 1114/2023 (the Markets in Crypto-Assets Regulation, or MiCA) became fully applicable in January 2025. Since then, many businesses have successfully received authorization from national competent authorities to provide services with crypto-assets, or to offer crypto-assets to the public. One of MiCA’s singularities, in comparison with other national regulatory frameworks, is the way it regulates the commercialization of crypto-assets known as stablecoins. Stablecoins are generally defined as crypto-assets that reference the value of an official currency, making them attractive instruments for cross-border payments. MiCA regulates two types of stablecoins: asset-reference tokens (ARTs) and e-money tokens (EMTs). The difference between both types is, according to the regulation, the value that is being referenced by the crypto-asset: if it is only the value of one official currency (like the euro or the US dollar), then the token falls under the definition of EMT; however, if the value referenced is the value of more than one official currency (like a basket of currencies) or the value of another asset or right (for example, the value of a commodity, or of other crypto-assets), then the token falls under the definition of an ART.

• French DDADUE law establishes a legal regime for pledging crypto-assets. On May 2, the French DDADUE Law 5 was published, introducing notable changes to the taking of security interest over crypto-assets in France. This legislation further aligns France with the European Union’s broader regulatory framework, particularly MiCA, which entered into application on December 30, 2024. However, as MiCA did not address nor create a harmonized EU legal regime for pledging crypto-assets, the DDADUE law innovates in this respect.

  The DDADUE law clarifies the legal regime for transactions in financial securities registered using distributed ledger technology (article L. 211-7 of the Financial Code), permits the use of crypto-assets as collateral for financial obligations (article L. 211-38 of the Financial Code), and establishes a regime for pledging crypto-assets (article L. 226-5 of the Financial Code).

• UK financial regulator issues consultation papers on stablecoins and crypto-assets. On May 28, the United Kingdom Financial Conduct Authority (FCA) issued consultation papers calling for public comment on the following:

• Hong Kong enacts stablecoin bill. On May 21, the Hong Kong Monetary Authority announced the passage of the “Stablecoins Bill,” which establishes a licensing regime for fiat-referenced stablecoin issuers in Hong Kong, supporting Hong Kong’s existing regulatory framework for virtual-asset activities. The new law requires persons issuing stablecoins to obtain a license from the Monetary Authority and “to maintain a stable value with reference to Hong Kong dollars.”

LISTEN

Digital Transformation – The never-ending journey. Digital transformation is more than a trend – it’s a continuous journey. Our Tech Index 2024 looks at the rise of blockchain to the advancements in AI and the potential of quantum computing – the evolution never stops. Organizations are encouraged to adapt and lead the way in this ever-changing landscape. Mark O'Conor, Paul Allen, and Chloe Forster take a deep dive into digital transformation.

READ

Digital Asset Market Clarity Act: The increasing role of the CFTC in regulating crypto markets

Digital Transformation: eSignatures and ePayments News and Trends

Market Edge – covering SEC developments for publicly traded companies

SEC roundtable presents both risks and opportunities of AI in the financial industry

Digital Digest addresses the growing challenges faced by the UK commercial and financial sector due to the increasing number of laws, regulations, and market practices affecting the digital and crypto industry.

[View source.]