A New Administration: Major Immediate Shifts in the Digital Asset Regulatory Landscape

This week’s Crypto Policy Tracker highlights major developments, including a crypto executive order from the new Trump administration and the launch of a new SEC Crypto Task Force led by Commissioner Hester Peirce, signaling upcoming regulatory changes and a potential shift toward clearer regulatory frameworks. Additionally, Caroline Pham has been appointed as acting chair of the CFTC, setting the stage for more proactive engagement with the crypto industry.

We also examine potential outcomes for existing enforcement actions under the SEC and CFTC. Looking ahead, we’ll keep an eye on upcoming executive orders, enforcement priorities and potential announcements regarding Bitcoin and other digital assets.

Crypto Executive Order

On January 23, 2025, President Trump signed an executive order titled “Strengthening American Leadership in Digital Financial Technology,” a shift in U.S. policy toward the digital asset space. The order sets forth policies and directives that are intended to “promote United States leadership in digital assets and financial technology while protecting economic liberty.” Here are the main points:

• Creation of the President’s Working Group on Digital Asset Markets: This group, chaired by the special advisor for AI and crypto, will include senior officials from key federal agencies such as Treasury, the SEC, CFTC and Homeland Security.
• • Within 30 days, agencies must identify regulations, guidance and policies affecting the digital asset sector.
• • Within 60 days, agencies must submit recommendations whether such regulations, guidance and policies should be rescinded, modified or adopted.
• • Within 180 days, the group will submit a report to the president, proposing a federal framework governing digital assets (including stablecoins), focusing on market structure, oversight and risk management.
• • The group will also evaluate creating a national digital asset stockpile, potentially sourced from crypto assets lawfully seized by the federal government.
• Enhancing Dollar Sovereignty Through Stablecoins: The administration aims to strengthen the global position of the U.S. dollar by promoting lawful, dollar-backed stablecoins. This approach seeks to ensure the dollar remains the dominant global reserve currency.
• Prohibiting Central Bank Digital Currencies (CBDCs): The order prohibits the establishment, issuance and use of CBDCs within the U.S., citing risks to financial stability, individual privacy and national sovereignty.
• Revoking Prior Frameworks: Executive Order 14067 (Ensuring Responsible Development of Digital Assets on March 9, 2022) and the Treasury’s 2022 Framework for International Engagement on Digital Assets are revoked. The Treasury Department is directed to rescind policies inconsistent with the new order.

Other Week 1 Executive Actions

The president has also signed a range of executive orders on energy, the economy and government reforms, as we spotlighted in a recent post. A general new executive order has paused all pending federal rules. One key rule this could affect is the CFPB’s recently proposed regulation to expand the Electronic Fund Transfer Act to cover digital assets, stablecoins, video game currencies and rewards points. With a CFPB leadership transition expected soon, the fate of this rule remains uncertain.

Additionally, the President granted a full and unconditional pardon to Ross Ulbricht, the founder of the Silk Road darknet marketplace.

Staff Accounting Bulletin 122 (“SAB 122”)

On January 23, 2025, the SEC, under the leadership of Acting Chairman Mark T. Uyeda, released Staff Accounting Bulletin 122 (17 CFR Part 211) (SAB 122), which revokes the guidance established by SAB 121.

Staff Accounting Bulletin 121 (17 CFR Part 211) (SAB 121), released on March 31, 2022, required banks to treat crypto assets held in custody as part of their balance sheets, increasing regulatory capital requirements and making bank custody of digital assets unfeasible. Select traditional finance entities received an exemption from SAB 121, and many in the crypto industry were frustrated by the lack of transparency.

In October 2023, the U.S. Government Accountability Office (GAO) determined that SAB 121 qualifies as a “rule” under the Congressional Review Act and therefore should have been submitted to Congress for review. This finding sparked debate, yet SAB 121 remained enforceable.

SAB 122 revokes the guidance established by SAB 121, and:

• Effectively removes the requirement for custodians of crypto assets to treat those assets as liabilities on their balance sheets.
• Instructs entities to assess their obligations to safeguard crypto assets under existing accounting standards for loss contingencies, allowing a more principles-based approach.
• Requires retrospective application for financial periods beginning after December 15, 2024, with the option for early adoption.
• Emphasizes the need for clear disclosures about obligations related to safeguarding crypto assets, ensuring investors are informed about potential risks and liabilities.

SAB 122 marks a shift, reducing the regulatory burden on entities holding crypto assets in custody, which could encourage broader participation by financial institutions in the digital asset market.

SEC Crypto Task Force

In one of his first actions as acting SEC chairman, Mark T. Uyeda announced the launch of a Crypto Task Force to “develop a comprehensive and clear regulatory framework for crypto assets.” This marks a significant shift from the SEC’s previous reliance on enforcement actions to regulate the industry. For industry participants, it offers hope for clearer guidance.

Known for her pro-innovation stance on digital assets, SEC Commissioner Hester Peirce will chair the task force. Peirce emphasized the importance of input from a wide range of stakeholders, including investors, industry participants, academics and the public.

Key objectives of the task force include drawing clear regulatory lines for digital assets and offering practical paths for crypto entities to register with the SEC, including developing disclosure frameworks tailored to the unique characteristics of digital assets.

Caroline Pham to Serve as Acting Chair of CFTC

Commissioner Pham has been an outspoken proponent for a clear regulatory framework for the crypto industry and has consistently pushed the CFTC to consider potential approaches to overseeing digital assets. In her first full day as acting chair, Pham announced CFTC leadership changes, with her top advisor tasked with leading the CFTC’s engagement on crypto, DeFi and other digital assets. In her first official statement as acting chair, Pham said it was “time for the CFTC to get back to the basics.”  

What Happens to Existing Enforcement Actions?

The SEC and CFTC’s enforcement priorities are likely to shift under the new administration. But what happens to the pending enforcement matters brought by the agencies under the prior administration? The answer to that question is important, not only to the respondents in these enforcement matters, but the entire industry. 

While it’s difficult to predict, we expect to see them go in one of three directions:

1. Complete dismissals, likely for big-name respondents whose positions are aligned with the new administration’s priorities and policies;
2. Settlements that set some sort of industry-favorable precedent; or
3. Cases that will move forward to be handled by the new administration, likely involving allegations of more obvious wrongdoing and evasion of well-settled rules. 

We will be watching closely for updates on how the Trump administration handles these agencies’ pending enforcement actions. 

This period of change presents a potential opportunity to shape the regulatory landscape for digital assets, and we’ll continue tracking developments as the administration’s priorities unfold.