DOJ will focus on criminal intent over mere code creation, seeking to balance legal accountability with support for innovation.
By Zachary Fallon, Jack McNeily, Benjamin Naftalis, Parag Patel, Barrie VanBrackle, Eric S. Volkman, Stephen P. Wink, Iris Xie, Douglas K. Yatter, and Deric Behar
On August 21, 2025, Acting Assistant Attorney General of the Criminal Division of the Department of Justice (DOJ), Matthew Galeotti, gave a speech at the American Innovation
Banking organizations should ensure appropriate risk management, but regulators are skeptical of certain crypto activities as principal.
By Arthur S. Long, Pia Naib, and Deric Behar
On January 3, 2023, the Board of Governors of the Federal Reserve System (Federal Reserve), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) (collectively, the agencies) issued a concise joint statement on crypto-asset risks to banking organizations.
Relatedly, on January 7, 2023, Mark Van
The comprehensive framework, which spans multiple reports, aims to spur risk mitigation efforts and potentially a US central bank digital currency.
By Alan W. Avery, Arthur S. Long, Yvette D. Valdez, Stephen P. Wink, Douglas K. Yatter, Pia Naib, Adam Bruce Fovent, and Deric Behar
On September 16, 2022, the White House published a fact sheet described as the first-ever “Comprehensive Framework for Responsible Development of Digital Assets” (the Framework). The Framework articulates
The US Treasury opens a Pandora’s box of legal issues as it targets a decentralized finance protocol used for both licit and illicit means.
By Eric Volkman and Deric Behar
On August 8, 2022, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against decentralized virtual currency “mixer” Tornado Cash (and 44 associated USDC and ETH addresses) — the first action of its kind against a decentralized finance (DeFi) protocol.
Mixers (or “blenders”) are centralized
A complaint filed in federal court will test the boundaries of protection from liability for individuals behind decentralized autonomous organizations.
By Stephen P. Wink, Nima H. Mohebbi, Adam Zuckerman, and Deric Behar
On May 2, 2022, a putative class action was filed in the US District Court for the Southern District of California against the bZx protocol decentralized autonomous organization (DAO), the DAO’s two individual co-founders, two limited liability corporations (LLCs) that invested in the DAO and participated in its governance, and several other associated entities. DAOs are (in theory) organizations without a centralized leadership structure like traditional corporations or other limited liability entities. Their governance is generally driven by the coded terms of smart contracts maintained on a blockchain ledger, rather than top-down by a management team. And rather than having a hierarchy of control, DAO stakeholders with tokenized voting rights are typically considered “equals” in which one token equals one vote.
The SEC’s reliance on a nebulous US Supreme Court decision raises important questions for the future of decentralized finance.
By Benjamin Naftalis, Douglas K. Yatter, and Peter E. Davis
Reves v. Ernst & Young,[1] a 30-year-old US Supreme Court decision on farmers’ co-ops, is garnering attention in the Web3[2] world, specifically in the context of protocol-driven decentralized finance (DeFi).[3] The case popped up in recent speeches by senior Securities and Exchange Commission (SEC) officials, including congressional testimony of SEC Chair Gary Gensler,[4] and featured in one of the SEC’s latest moves in crypto enforcement — an August 2021 action against a company called DeFi Money Market (DMM).[5] These developments raise several important questions. What is the relevance and application of the Reves four-factor test? How does it apply (or not apply) to Web3 generally and DeFi specifically? Most importantly, does it give the SEC broad authority to regulate DeFi?
The report addresses the market risks and regulatory challenges presented by stablecoins and urges Congress to act quickly.
By Alan W. Avery, Yvette D. Valdez, Stephen P. Wink, Pia Naib, and Deric Behar
On November 1, 2021, the President’s Working Group on Financial Markets (PWG) in conjunction with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) published its long-anticipated Report on Stablecoins (the Report). Regulators worldwide have become acutely aware of how stablecoins function as a bridge between traditional financial markets and digital asset markets. As a result, regulators are seeking to address the risks, opportunities, and regulatory gaps presented by this burgeoning asset class.
The Report first describes how payment stablecoins function, before identifying key gaps in prudential authority over stablecoins in the US financial system. It then presents recommendations for addressing those gaps.