Digital Assets Recent Updates – May 2025

Client Alert | June 6, 2025

We are pleased to provide you with the May edition of Gibson Dunn’s digital assets regular update. This update covers recent legal news regarding all types of digital assets, including cryptocurrencies, stablecoins, CBDCs, and NFTs, as well as other blockchain and Web3 technologies. Thank you for your interest.

ENFORCEMENT ACTIONS

UNITED STATES

SEC Drops Binance Suit
On May 29, the SEC and Binance filed a joint stipulation dismissing with prejudice the SEC’s lawsuit against the trading platform. The suit had been stayed at the SEC’s request while the agency’s crypto task force considers a new regulatory framework for digital assets. Binance stated that the dismissal “signals a global green light for responsible crypto innovation, boosting confidence from the U.S. to the EU and beyond.” Gibson Dunn represented Binance in this matter. Joint Stipulation; Law360; The Block.
SEC Charges Unicoin and Its Executives with $100 Million Fraud
On May 20, the SEC brought an enforcement action under the antifraud provisions of the federal securities laws against New York-based crypto project Unicoin, Inc., and three of its executives, in the U.S. District Court for the Southern District of New York. Unicoin and its executives allegedly made false and misleading statements by offering certificates that purportedly conveyed rights to Unicoin’s tokens and common stock. SEC; Complaint; The Block.
FTC and the State of Nevada Sue Online Crypto Trading Education Firm for $1.2 Billion Fraud Targeting Young Investors
On May 1, the Federal Trade Commission and the State of Nevada filed a complaint against an entity currently operating as IYOVIA and more broadly referred to as “IML.” IML offers educational courses in cryptocurrency trading but allegedly stole over a billion dollars from young investors through fraudulent courses. The company allegedly misrepresented how much both customers and salespeople could make, claiming its salespeople could make up to $750,000 per month, while knowing that just one in five earned more than $500 per month. FTC; Complaint; The Block.
Prosecutors Drop Money-Transmitter Charge Against Tornado Cash Developer
On May 15, the U.S. Attorney’s Office for the Southern District of New York pared back a charge for conspiracy to operate a money-transmitting business in its criminal case against Tornado Cash developer Roman Storm. Storm was charged in August 2023 with three counts: conspiracy to violate sanctions, conspiracy to commit money laundering, and conspiracy to operate an unlicensed money-transmitting business. The government had argued that the money-transmitting conspiracy could be proved through either evidence that Storm failed to comply with money-transmitting regulations or evidence that he transmitted funds known to be derived from a criminal offense. The government has dropped the former theory but continues to maintain the latter (along with the remaining counts). The decision comes in response to the April 7 memorandum from Deputy Attorney General Todd Blanche, which directed federal prosecutors to avoid “enforcement actions that have the effect of superimposing regulatory frameworks on digital assets.” Law360; SDNY Letter; Blanche Memo.
Judge Vacates Fraud and Manipulation Convictions Against Mango Markets Trader
On May 23, a federal judge in Manhattan overturned a jury verdict for charges of wire fraud, commodities fraud, and commodities manipulation against Avraham Eisenberg. Eisenberg had been convicted in April 2024 of manipulating the price of Mango Markets’ MNGO token in order to artificially inflate the value of his assets on the Mango Markets platform, allowing him to “borrow” money he did not intend to return. The court vacated the commodities fraud and commodities manipulation convictions for lack of venue, and entered a judgment of acquittal for the wire fraud charge due to insufficient evidence by the government that Eisenberg had made false statements. Eisenberg’s separate conviction for possession of child pornography was left in place. Law360; Opinion and Order.
New York Man Charged with Using Sham Blockchain Venture
On May 21, the Department of Justice and the SEC filed parallel criminal and civil actions against Jeremy Jordan-Jones, CEO of start-up Amalgam Capital Ventures LLC. Jordan-Jones had allegedly misrepresented his business to investors, raising $500,000 on the claim that it had developed a blockchain-based payment processing system, when Amalgam allegedly had not developed the technology. The U.S. Attorney’s Office for the Southern District of New York charged Jordan-Jones with fraud, false statements, and identify theft offenses; in a parallel action, the SEC sued Jordan-Jones under the antifraud provisions of the federal securities laws for making material misrepresentations to investors. DOJ; Indictment; SEC.
Former Celsius CEO Alex Mashinsky Sentenced to 12 Years in Prison for Crypto-Related Fraud
On May 8, Alex Mashinsky, the former CEO of the now-defunct crypto lender Celsius, was sentenced to 12 years in prison after he had pleaded guilty to fraud and market manipulation in the U.S. District Court for the Southern District of New York. According to the U.S. Attorney’s Office, Mashinsky defrauded Celsius investors by taking inappropriate risks with their funds, including by propping up the price of Celsius’ crypto-token CEL. DOJ.
DOJ Seizes $24 Million of Cryptocurrency from Developer of Qakbot Malware
On May 22, the Department of Justice unsealed an indictment against Qakbot developer Rustam Rafailevich Gallyamov and filed a civil forfeiture action against cryptocurrency tied to Qakbot. The Qakbot malware had allegedly been used to infect thousands of computers, allowing Gallyamov to sell access to those computers to various ransomware attackers. As part of the investigation, the FBI seized approximately $24 million in cryptocurrency generated through Qakbot’s allegedly criminal activity. CoinTelegraph; DOJ; Indictment; Complaint.
Superseding Indictment Adds 12 Defendants to RICO Conspiracy for $263 Million Scheme
On May 15, a superseding indictment was unsealed in the U.S. District Court for the District of Columbia adding twelve additional defendants to a RICO criminal charge originally brought against two individuals, Malone Lam and Jeandiel Serrano. The case, originally filed in September 2024, alleges a conspiracy to steal over $263 million worth of cryptocurrency, include over $230 million of Bitcoin from one victim in Washington, D.C., and then launder the proceeds. The defendants are charged with RICO conspiracy, conspiracy to commit wire fraud, money laundering, and obstruction of justice. DOJ 1; DOJ 2; Original Indictment.
Arrests Made in Kidnapping Attempt to Steal Cryptocurrency
On May 23, two people were arrested in New York City for the kidnapping and torture of an Italian tourist. The kidnappers were allegedly attempting to extort the tourist into turning over control of “millions of dollars” in cryptocurrency. The Block; NYT.

INTERNATIONAL

Argentinian President Milei Dissolved Investigation into LIBRA Scandal
On May 19, Argentinian President Javier Milei and Justice Minister Mariano Cúneo Libarona signed a decree dissolving a task force which was investigating the LIBRA cryptocurrency. LIBRA was originally promoted by Milei via social media as a “private project” to stimulate the Argentine economy. Milei’s promotion of LIBRA caused a scandal when the cryptocurrency reached a market valuation of more than $4.5 billion before soon losing nearly 90% of its value. Forbes; CoinDesk.
German Authorities Seize Over $38 Million from Now-Defunct Crypto Exchange Platform eXch
On May 9, the German Federal Criminal Police Office (BKA) announced that it had seized the server infrastructure of eXch, along with €34 million in Bitcoin, Ether, Litecoin, and Dash. The crypto exchange, which had been operating since 2014, enabled anonymous exchanges of crypto assets without any KYC measures or anti-money laundering protocols. German prosecutors said that the platform advertised this lack of measures on websites and other platforms of “criminal underground economy.” It is estimated that up to $1.9 billion has been moved through the exchange since its inception, in large part from criminal origins. The German authorities also claimed that a portion of the $1.4 billion in crypto stolen from Bybit earlier this year was laundered through eXch. BKA; The Block.

REGULATION AND LEGISLATION

UNITED STATES

Senate Advances GENIUS Act
On May 19, the Senate invoked cloture on the Guiding and Establishing National Innovation for U.S. Stablecoins (“GENIUS”) Act. The bill is the first comprehensive federal regulatory framework for stablecoins. The bipartisan cloture vote (66-32) limits the amount of further debate before a final vote is taken to approve or reject the bill. There is still an opportunity to propose amendments before the final vote, after which the bill will advance to the House of Representatives. The Block; MSN; Democrat Amendments.
Crypto Market Structure Bill Formally Introduced in House of Representatives
On May 29, a bipartisan group of House members formally introduced the crypto market-structure bill that would clarify the jurisdictional boundaries of the SEC and CFTC over digital assets. A discussion draft of the legislation had been released earlier in the month. The House Financial Services and Agriculture committees will consider and revise the bill before voting on whether to send the bill to the full chamber. The House Financial Services Committee held a hearing on the bill on June 4. Axios; Law360; Bill.
New Hampshire Becomes the First U.S. State to Pass “Strategic Bitcoin Reserve” Bill
On May 6, New Hampshire Governor Kelly Ayotte signed bill HB 302 into law, enabling up to 10% of the State’s general fund to be allocated to both precious metals and digital assets with a market cap exceeding $500 billion – a threshold currently met only by Bitcoin. The State can invest in qualifying digital assets either directly or via an exchange-traded fund, and may self-custody these assets or use a custodian. On May 7, Arizona followed suit and passed its own crypto reserve bill, but Governor Katie Hobbs vetoed it five days later. A similar bill has been adopted by the Texas State Legislature and is awaiting the signature of Governor Greg Abbott. Other States are currently considering adopting similar legislation, while these efforts have been paused in Florida. The Block; Axios.
The OCC Confirms that U.S. Banks Can Buy and Sell Customers’ Crypto on Their Behalf
On May 7, the Office of the Comptroller of the Currency published Interpretive Letter No. 1184, which clarified that national banks and federal savings associations may buy and sell crypto-assets held in custody on a customer’s behalf at the direction of the customer. The agency also stated that national banks can outsource crypto custody and trade execution services to third parties if proper risk-management procedures are in place. The guidance is consistent with prior OCC, Federal Reserve, and FDIC guidance and other actions as they continue to signal increased receptivity to crypto-related activities and digital assets in the banking industry on behalf of clients. Interpretive Letter No. 1184; The Block.
SEC and FINRA Withdraw Broker-Dealer Guidance
On May 15, FINRA and the SEC Division of Trading and Markets withdrew their 2019 Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities. The Joint Statement had set forth the SEC’s interpretation of the so-called Customer Protection Rule, which effectively prohibited broker-dealers from taking custody of digital assets. The withdrawal was accompanied by new FAQs on broker-dealer responsibility. The FAQs state that broker-dealers can custody digital assets without complying with the Customer Protection Rule or with the requirements of the 2020 Special Purpose Broker-Dealer Statement. Withdrawal; Joint Statement; FAQs; Lexology.
Department of Labor Rescinds Guidance Discouraging 401(k) Crypto Investment
On May 28, the Department of Labor rescinded its 2022 guidance directing 401(k) plan fiduciaries to exercise “extreme care before they consider adding a cryptocurrency option to a 401(k) plan’s investment menu for plan participants.” In its place, the Department’s new guidance states that “a plan fiduciary’s decision should consider all relevant facts and circumstances.” DOL; Prior Guidance; The Block.

INTERNATIONAL

Hong Kong Passes Stablecoin Bill
Hong Kong’s Legislative Council passed a stablecoin bill for fiat-referenced stablecoins. The bill will require stablecoin issuers to obtain a license from the Hong Kong Monetary Authority and comply with a range of requirements, including proper management of asset reserves, redemption mechanisms, and segregation of client assets. The bill is expected to come into effect this year, with “sufficient time” allowed for the industry to understand the requirements. The bill builds on Hong Kong’s recent expansion of its crypto market, including the introduction of a virtual crypto asset regime for crypto trading platforms in 2023, and the launch of a sandbox for stablecoin issuers in 2024. The Block; CNBC.
El Salvador Continues to Purchase Bitcoin After IMF Announces Agreement to Stop
On May 27, the International Monetary Fund announced that it had reached an agreement with the government of El Salvador to release $120 million of funds as part of a $1.4 billion loan program approved last year. As part of the agreement, the IMF noted that El Salvador agreed not to purchase more Bitcoin. After the announcement, however, El Salvador posted on X that it had purchased additional Bitcoin. The Block; IMF; X.
New Singapore Rules for Offshore Crypto Service Providers
The Monetary Authority of Singapore (MAS) has confirmed its new rules for crypto service providers that operate “outside Singapore” but with Singapore touchpoints (e.g. supported by a corporation or individuals in Singapore). To determine if a service provider operates “outside Singapore,” factors such as whether the front-office functions (e.g. sales, business development) or customers are located outside Singapore are relevant. In-scope service providers will not benefit from any transitional grandfathering. They must suspend or cease their business by June 30, 2025. The MAS will grant licenses under the new framework only in extremely limited circumstances (as this type of operating model generally gives rise to regulatory concerns, e.g. AML/CFT-related). The MAS has published ongoing requirements (conduct, prudential, governance, risk management etc.) for those service providers that will obtain a license. Consultation Paper.
FCA Consults on Stablecoin Issuance and Custody Rules
On May 28, the UK Financial Conduct Authority (FCA) published consultation papers CP25/14 and CP25/15, seeking stakeholder feedback on a draft framework that would bring the activities of issuing “qualifying stablecoins” and safeguarding “qualifying cryptoassets” within the regulatory perimeter, and introduce prudential rules for the aforementioned activities. Proposed regulatory measures relating to stablecoin issuance include requirements for full reserve backing, guaranteed par redemption on a T+1 basis, and a prohibition on distributing stablecoin yield to customers. The FCA is further proposing to introduce a new prudential regime to ensure that crypto firms set aside adequate financial resources. The proposed framework—which will mirror the three-pillared approach of minimum capital, liquidity buffers and risk controls used in traditional finance—will set baseline rules applicable across sub-sectors in the crypto industry and prescribe capital and liquidity rules for stablecoin issuers. Interested respondents are invited to provide comments by July 31, 2025. CP25/14; CP25/15.

SPEAKER’S CORNER

UNITED STATES

Commissioner Peirce Describes Role for the SEC in Crypto Regulation
On May 29, SEC Commissioner Hester Peirce spoke at the Bitcoin 2025 conference in Las Vegas. Acknowledging that the SEC had dismissed several crypto-related enforcement actions, Commissioner Pierce emphasized that the Commission still has a role in enforcing the law against bad actors in the crypto space. “The goal is to use our enforcement tool for what it was intended to be used for, which is when there are clear rules and people violate them, then we can use our enforcement too.” The Commissioner also stated that “most crypto assets as we see them today are probably not themselves securities,” but that “doesn’t mean that you can’t sell a token that is not itself a security in a transaction that is a securities transaction.” Speech; The Block; Cointelegraph.
SEC Holds Tokenization Roundtable
On May 12, the SEC held a roundtable on tokenization as part of a series of discussions on digital asset regulation. The roundtable, held at the SEC’s headquarters, included panels on the evolution of tokenized capital markets and on the future of tokenization. In his keynote address, SEC Chairman Paul Atkins outlined the Commission’s goals to create clear guidelines for issuance of digital assets, to allow more choice regarding how to custody digital assets, and to allow a wider variety of trades, including “‘pairs trading’ between securities and non-securities.” SEC; Keynote.

INTERNATIONAL

Nigel Farage Advocates for UK Bitcoin Reserve
On May 29, UK Reform Party leader and former Brexit campaigner Nigel Farage pledged to introduce legislation to establish a strategic bitcoin reserve if he were to be elected Prime Minister. Speaking at the Bitcoin 2025 conference in Las Vegas, he also pledged to ban crypto debanking and to lower the capital gains tax. Speech; The Block.

OTHER NOTABLE NEWS

Coinbase Acquires Crypto Options Exchange Deribit for $2.9 Billion
On May 8, Coinbase agreed to acquire the crypto options exchange Deribit for approximately $2.9 billion in cash and stock. The transaction is still subject to regulatory approvals and closing conditions and is expected to close by year-end. Coinbase Blog; CoinDesk.
Leaders of IRS Crypto Unit Departs, Trish Turner Takes Over
On May 6, Trish Turner, a longtime IRS official, was appointed to lead the agency’s digital-asset unit after the exit of Sulolit Mukherjee and Seth Wilks, who co-led the unit for over a year. Before this new role, Turner served as a senior advisor within this unit responsible for crypto taxation and enforcement. The Block.
Three CFTC Commissioners Announce Departure
On May 21, CFTC Commissioner Kristin Johnson announced her intent to leave the agency, joining two others—Summer Mersinger, and Christy Goldsmith Romero—who had already announced that they would step down at the end of May. With former Chairman Rostin Behnam having departed earlier this year, when Commissioner Johnson leaves only acting Chair Caroline Pham will remain. Pham has also stated that she plans to leave the agency once President Trump’s nominee, Brian Quintenz, is confirmed. The CFTC has not operated with so few governing members since early 2022. Law360.

The following Gibson Dunn lawyers contributed to this issue: Jason Cabral, Kendall Day, William Hallatt, Michelle Kirschner, Hagan Rooke, Jeff Steiner, Sara Weed, Sam Raymond, Nick Harper, Nicholas Tok, Apratim Vidyarthi, Justin Fishman, and Theo Curie.

FinTech and Digital Assets Group Leaders / Members:

Ashlie Beringer, Palo Alto (+1 650.849.5327, aberinger@gibsondunn.com)

Michael D. Bopp, Washington, D.C. (+1 202.955.8256, mbopp@gibsondunn.com)

Stephanie L. Brooker, Washington, D.C. (+1 202.887.3502, sbrooker@gibsondunn.com)

Jason J. Cabral, New York (+1 212.351.6267, jcabral@gibsondunn.com)

Ella Alves Capone, Washington, D.C. (+1 202.887.3511, ecapone@gibsondunn.com)

M. Kendall Day, Washington, D.C. (+1 202.955.8220, kday@gibsondunn.com)

Sébastien Evrard, Hong Kong (+852 2214 3798, sevrard@gibsondunn.com)

William R. Hallatt, Hong Kong (+852 2214 3836, whallatt@gibsondunn.com)

Nick Harper, Washington, D.C. (+1 202.887.3534, nharper@gibsondunn.com)

Martin A. Hewett, Washington, D.C. (+1 202.955.8207, mhewett@gibsondunn.com)

Sameera Kimatrai, Dubai (+971 4 318 4616, skimatrai@gibsondunn.com)

Michelle M. Kirschner, London (+44 (0)20 7071.4212, mkirschner@gibsondunn.com)

Stewart McDowell, San Francisco (+1 415.393.8322, smcdowell@gibsondunn.com)

Hagen H. Rooke, Singapore (+65 6507 3620, hhrooke@gibsondunn.com)

Mark K. Schonfeld, New York (+1 212.351.2433, mschonfeld@gibsondunn.com)

Orin Snyder, New York (+1 212.351.2400, osnyder@gibsondunn.com)

Ro Spaziani, New York (+1 212.351.6255, rspaziani@gibsondunn.com)

Jeffrey L. Steiner, Washington, D.C. (+1 202.887.3632, jsteiner@gibsondunn.com)

Eric D. Vandevelde, Los Angeles (+1 213.229.7186, evandevelde@gibsondunn.com)

Benjamin Wagner, Palo Alto (+1 650.849.5395, bwagner@gibsondunn.com)

Sara K. Weed, Washington, D.C. (+1 202.955.8507, sweed@gibsondunn.com)

Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials. The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel. Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.

Digital Assets Recent Updates – May 2025

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