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.

Senate Agriculture Committee Advances Crypto Market Structure Bill

On Jan. 29, the U.S. Senate Agriculture Committee voted along party lines to advance a cryptocurrency market structure bill that would grant the Commodity Futures Trading Commission (CFTC) regulatory authority over digital commodities. Committee Chairman John Boozman, R-Ark., moved forward with the legislation despite losing bipartisan support for an earlier version. Boozman had previously collaborated with Sen. Cory Booker, D-N.J., on a draft bill last year, but Booker declined to support the version the committee approved Thursday. Although this marks the first time a crypto market structure bill has advanced beyond a Senate committee, additional hurdles remain. The Senate Banking Committee must also approve its own version of a crypto market structure bill before the two measures can be reconciled and brought to the full Senate for consideration. The full press release is available here.

White House Officials Meet with Banks to Advance Crypto Market Structure Bill

On Feb. 2, executives from Coinbase, crypto trade groups, and banking associations met with White House officials to resolve a standoff over the stablecoin reward provisions that derailed the U.S. Senate Banking Committee’s crypto market structure bill last month. During the meeting, the White House reportedly ordered the two sides to come to an agreement by the end of February. The media reporting of the event is available here.

SEC Drops Charges Against CryptoFed

On Feb. 4, the Securities and Exchange Commission (SEC) dismissed proceedings against American CryptoFed DAO LLC. The case originated on Nov. 10, 2021, when the SEC refused to allow CryptoFed to withdraw a “misleading” Form S-1 registration statement related to the issuance of a stablecoin and a governance token. In its order, the SEC acknowledged that “much has changed about the regulation of crypto assets since these events, including on topics that could affect a company’s decision on whether or how to file registration statements concerning crypto assets.” The agency cited several recent developments: the enactment of the GENIUS Act, the executive order supporting the growth of blockchain and digital assets, and SEC Chairman Paul Atkins’ support for clearer guidelines for market participants. The order is available here.

OFAC Sanctions Two Crypto Exchanges.

On Jan. 30, the Office of Foreign Assets Control (OFAC) sanctioned two crypto exchanges–Zedcex Exchange Ltd. (Zedcex) and Zedxion Exchange Ltd. (Zedxion)–for the first time under Iran-specific financial institution sanctions. Both exchanges are UK-registered digital asset platforms with connections to a sanctioned Iranian businessman. In addition to designating the exchanges for operating in the financial sector, OFAC designated Zedcex and Zedxion pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for or goods or services to or in support of the Iranian Revolutionary Guard Corps. The press release is available here.

CFTC Withdraws Prediction Markets Advisory and Proposed Rules

On Feb. 4, the CFTC announced it has withdrawn the notice of proposed rulemaking titled “Event Contracts” that was published June 10, 2024, and the CFTC Staff Advisory 25-36 on certain contract markets, issued Sept. 30, 2025. CFTC Chairman Michael Selig noted that “[t]he 2024 event contracts proposal reflected the prior administration’s frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election” and that the CFTC will be advancing “a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act that promotes responsible innovation in our derivatives markets in line with Congressional intent.” The press release is available here.

Nu Receives Conditional Approval for a National Bank Charter from the Office of the Comptroller of the Currency

On Jan. 29, the Office of the Comptroller of the Currency (OCC) conditionally approved the application from Brazil-based digital challenger Nubank (Nu) to form a national bank in the United States. The approval arrived just 121 days after Nu, one of the world's largest digital financial services platforms with over 127 million customers across Brazil, Mexico, and Colombia, submitted its application on September 30, 2025.  See the full press release here.

Canada Issues New Crypto Custody Rules

On Feb. 3, the Canadian Investment Regulatory Organization (CIRO), Canada’s investment regulator, introduced a new digital asset custody framework that tightens rules on how crypto assets are held. The guidance establishes a tiered, risk-based structure for custody; sets minimum capital requirements; and requires dealer members to hold digital assets with approved digital asset custodians unless they can demonstrate satisfactory custody technology for internal custody. The framework also differentiates between crypto assets and tokenized versions of traditional assets with respect to required safeguards. Tokenized assets must be held with entities that qualify as acceptable securities locations under the traditional custody framework, but because custody is performed through digital asset infrastructure, tokenized asset custodians must also meet certain specified digital custody safeguards applicable to crypto asset custodians. The full notice is available here.

Nevada Issues Temporary Restraining Order Against Prediction Markets Exchange

On Jan. 29, Nevada state court Judge Jason Woodbury issued a temporary restraining order (TRO) blocking Blockratize–the entity behind Polymarket, the world’s largest prediction markets exchange–from offering event-based contracts in the state. The two-week order concluded that the platform’s activities likely violate Nevada gaming law and are not shielded by exclusive federal derivatives oversight. “The resulting harm in evasion of Nevada’s ‘comprehensive regulatory structure’ and ‘strict licensing standards’ is immediate, irreparable, and not sufficiently remediable by compensatory damages,” the judge wrote. Days later, on February 3, Nevada’s Gaming Control Board announced that it had filed a civil enforcement action against Coinbase, the largest U.S. crypto exchange, for allegedly offering unlicensed wagering in the state through its sports events contracts. The TRO was first reported here, and the press release is available here.

Hawaii Introduces Bill Defining Prediction Markets as Gambling

On Jan. 30, Hawaii lawmakers referred proposed legislation that would expressly prohibit prediction market contracts. To the state’s definition of gambling, the proposed bill adds “gambling does include the purchase, sale, or financial speculation upon securities, commodities, or other similar financial products where the outcome or future contingent event relates to” sports, contests, people, politics, catastrophe, and death. The bill text is available here.