Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
SEC Sets Date for Meeting on Regulation Crypto Assets
On August 10, the Securities and Exchange Commission (SEC) announced a meeting set for August 14 to discuss whether the SEC will release proposed rules in connection with certain investment contracts relating to crypto assets. Titled “Regulation Crypto Assets,” the item to be discussed is a narrow segment of the crypto asset market structure regime and will focus on a potential framework for crypto asset securities offerings. See the Open Meeting Agenda here.
ByBit Sues North Korea, Its Intelligence Agency, and Lazarus Group Over $1.5 Billion Hack
On August 7, Bybit, a major digital asset exchange, filed a civil lawsuit in the U.S. District Court for the District of Columbia against the Democratic People’s Republic of Korea (North Korea); its intelligence agency, the Reconnaissance General Bureau; and the Lazarus Group in connection with the $1.5 billion hack the exchange fell victim to in February 2025. Bybit was granted an expedited discovery request on the basis of allegations that traceable assets flowed into exchanges operating in the U.S. The U.S. Federal Bureau of Investigation previously identified the North Korea-linked Lazarus Group as being responsible for the hack, which it is currently investigating.
Blockchain Association Files Amicus Brief in Support of Custodia
On August 12, the Blockchain Association filed an amicus brief in support of Custodia Bank’s petition challenging the Federal Reserve’s denial of master account access. In June 2022, Custodia Bank sued the Federal Reserve Bank of Kansas City (Federal Reserve) over processing delays and for failing to comply with federal law that requires access for eligible institutions. Custodia Bank’s petition now sits before the U.S. Supreme Court. In its amicus brief, the Blockchain Association urges the Supreme Court to review the Tenth Circuit’s decision approving the Federal Reserve’s denial of Custodia’s master account application, arguing that direct access to Federal Reserve payment services is essential for lawful digital asset businesses and the state-chartered banks serving them. The brief contends that master accounts are “vital for functioning banks” because they enable electronic settlement and access to services such as Fedwire, FedNow, ACH, and check-clearing services, while reliance on correspondent banks can increase costs and introduce credit, settlement, and termination risks. The brief also criticizes the Federal Reserve’s proposed limited “Payment Accounts” as an inadequate substitute for full master accounts, particularly because they would exclude FedACH access and impose other restrictions, and it argues that existing supervisory tools are sufficient to manage payment-system risk without giving the Federal Reserve unchecked discretion to deny access. See the brief here.
OCC Encourages De Novo Chartering, Including Firms Engaged in Digital Asset Businesses
On August 11, the Office of the Comptroller of the Currency (OCC) released a statement highlighting the increase of de novo applications for OCC charters. Cited in the statement, Comptroller of the Currency Jonathan Gould stated, “For more than a decade, regulators signaled that those seeking a federal bank charter and federal deposit insurance need not apply.” Gould further stated, “Entities that engage in legally permissible activities, including those involving digital assets and other novel technologies, should have a path to becoming a national bank. America and the OCC are once again open for business.” According to the statement, the OCC has made decisions on charter applications within 120 days of receipt of complete applications and has approved a full-service national bank for the first time in five years. The OCC encourages firms to submit applications for OCC charters. See the statement here.
SEC and CFTC Bring Parallel Actions Against Goliath Ventures Over Alleged Crypto Ponzi Scheme
On August 11, the SEC and Commodity Futures Trading Commission (CFTC) brought parallel civil enforcement actions against Goliath Ventures Inc. and its CEO arising from an alleged multiyear scheme involving purported crypto asset trading and liquidity pools. The SEC alleges that Goliath raised at least $425 million from more than 1,300 investors through an unregistered securities offering, promised monthly returns of 3 percent to 10 percent, invested no investor funds or crypto assets in the represented liquidity pools, and allowed its CEO to misappropriate at least $51 million. The CFTC separately alleges that approximately 1,600 customers contributed at least $397 million for purported trading in bitcoin, ether, and other assets and seeks restitution, disgorgement, penalties, trading and registration bans, and injunctive relief. See the SEC’s litigation release here and the CFTC’s press release here.
