Our team of litigators has years of experience litigating digital asset cases as well as handling the wide array of regulatory issues associated with structuring investment vehicles for digital assets.
We currently represent leaders in the industry in some of the largest digital asset litigations, such as our representation of SkyBridge Capital in the FTX Cryptocurrency Exchange Collapse Litigation, 1:23-md-03076-KMM.
We can represent you in a crypto fraud or theft case, a crypto trade secret/technology misappropriation case, a crypto bankruptcy claw back case, a crypto related business dispute, or class action or regulatory action. We offer full contingency fees for cases involving significant damages.
If you would like to discuss a potential matter, you can reach us by contacting Douglas Hirsch or Sam Lieberman pursuant to the contact information below.
Navigating the Complex World of Crypto Litigation and Regulation
The legal and regulatory framework for digital assets changes weekly. Courts have issued conflicting decisions on whether a digital asset is a security under U.S. security laws and the SEC has just begun abandoning its regulation by enforcement approach. Below is a list of some of the more recent developments:
In January 2025, President Donald Trump signed Executive Order 14178, titled "Strengthening American Leadership in Digital Financial Technology." This order revoked previous directives and prohibited the establishment or promotion of a Central Bank Digital Currency (CBDC). It also established a group tasked with proposing a federal regulatory framework for digital assets within 180 days.
The SEC dismissed its enforcement case against Coinbase in which the SEC argued that Coinbase was operating an illegal securities exchange under the 34 Act.
Digital Asset Regulatory Framework
There are currently a number of laws that apply to digital currency and blockchain transactions:
Financial Crimes Enforcement Network (FinCEN): FinCEN, a bureau of the U.S. Department of the Treasury, oversees cryptocurrency exchanges under the classification of money services businesses. Since 2013, it has mandated that these entities comply with Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) regulations, including registration, record-keeping, and reporting obligations
Securities and Exchange Commission (SEC): The SEC regulates cryptocurrencies that qualify as securities under the Howey Test, which defines a security as an investment in a common enterprise with profits expected primarily from the efforts of others. Under the Trump administration, the SEC has ceased its regulation by enforcement approach, dismissed significant enforcement cases, such as the case against Coinbase, and has indicated that it will narrow its focus to cryptocurrency fraud.
Commodity Futures Trading Commission (CFTC): The CFTC classifies certain cryptocurrencies, such as Bitcoin, as commodities and oversees derivatives trading involving these digital assets. It ensures that trading practices adhere to the Commodity Exchange Act, aiming to prevent market manipulation and fraud.
Internal Revenue Service (IRS): The IRS treats cryptocurrencies as property for tax purposes. Taxpayers must report cryptocurrency transactions, including sales, exchanges, and income derived from mining or staking, to ensure compliance with federal tax laws.
State Regulations: Individual states have enacted varying laws concerning cryptocurrency. For instance, New York's BitLicense framework requires cryptocurrency businesses to obtain a specific license to operate within the state, imposing stringent compliance standards.
Pending Legislation
Financial Innovation and Technology for the 21st Century Act (FIT21): This bipartisan bill aims to establish a clear regulatory framework for digital assets in the United States. It delineates responsibilities between the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), assigning the CFTC authority over decentralized digital commodities and the SEC over digital assets that function as securities. The House passed the bill in May 2024, and it is currently under Senate consideration.
Stablecoin Regulation Act: This proposed legislation aims to define and regulate stablecoins—digital currencies pegged to stable assets like the U.S. dollar. The bill proposes that stablecoins be backed one-to-one by U.S. dollars and places them under the regulatory purview of the SEC. In July 2023, the House Financial Services Committee advanced the bill with bipartisan support, and it is currently awaiting further action in Congress.
Digital Commodities Consumer Protection Act (DCCPA): Introduced to regulate the trading of cryptocurrencies and related digital assets, this proposed law seeks to place crypto asset regulation under the CFTC's authority. The bill has bipartisan support; however, its progress has been impacted by recent events in the crypto industry, delaying its enactment.
Executive Order on Strengthening American Leadership in Digital Financial Technology: On January 23, 2025, President Donald Trump signed an executive order establishing a "strategic bitcoin reserve" and a "digital asset stockpile." This move has sparked controversy within the crypto industry and among lawmakers, with critics arguing it could lead to the government picking winners and losers within the industry while undermining bipartisan efforts to pass industry-friendly legislation.
Note: The regulatory landscape for cryptocurrencies and digital assets is continually evolving. Our firm stays abreast of these developments to provide clients with up-to-date legal advice and representation.
