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 and CFTC Issue Joint Interpretation Clarifying Application of Federal Securities Laws to Crypto Assets
On March 17, the Securities and Exchange Commission (SEC) issued a commission-level interpretation clarifying how the federal securities laws apply to certain crypto assets and transactions involving crypto assets. The Commodity Futures Trading Commission (CFTC) joined the interpretation, providing guidance that the CFTC and its staff will administer the Commodity Exchange Act consistent with the SEC’s interpretation. Key provisions include (a) a five-category token taxonomy establishing that digital commodities (tokens deriving value from the programmatic operation of a functional, decentralized crypto system), digital collectibles, digital tools, and stablecoins are not securities–with only “digital securities” (tokens representing ownership of a financial instrument enumerated in the statutory definition of “security”) remaining subject to the federal securities laws; (b) guidance on how a non-security crypto asset may become subject to an investment contract and, critically, how it may cease to be subject to one; (c) clarification that airdrops, protocol mining, protocol staking, and the wrapping of non-security crypto assets in and of themselves do not constitute securities transactions; and (d) CFTC guidance that certain non-security crypto assets could meet the definition of “commodity” under the Commodity Exchange Act. The SEC’s press release is available here. The full interpretive release is available here. The CFTC’s press release is available here.
SEC Chairman Atkins Previews ‘Regulation Crypto Assets’ Safe Harbor Proposal
On March 17, SEC Chairman Paul S. Atkins previewed a forthcoming rulemaking proposal titled “Regulation Crypto Assets” that would establish safe harbor pathways for crypto asset offerings. The proposal is expected to include three components: (a) a “startup exemption”–a time-limited registration exemption for up to four years that would allow crypto entrepreneurs to raise up to $5 million; (b) a “fundraising exemption”–a new offering exemption that would permit issuers to raise up to $75 million during any 12-month period; and (c) an “investment contract safe harbor” from the definition of “security” for certain crypto assets, which would apply once the issuer has completed or permanently ceased all essential managerial efforts that it represented or promised it would undertake under the investment contract. Atkins indicated that the commission expects to release the proposed rule for public comment in the coming weeks and that the rulemaking would draw heavily from congressional work on the CLARITY Act. Chairman Atkins’s remarks are available here.
CFTC Issues No-Action Position for Self-Custodial Crypto Wallet Provider
On March 17, the CFTC’s Market Participants Division announced it had issued a no-action position (Staff Letter No. 26-09) in response to a request from Phantom Technologies Inc., a developer of self-custodial crypto asset wallet software. The position relates to Phantom’s proposed provision and marketing of software to facilitate trading by its users with registered futures commission merchants (FCMs), introducing brokers (IBs), and designated contract markets (DCMs). Under prior CFTC staff interpretive letters issued to technology service vendors (TSVs), a TSV could avoid IB registration only if, among other conditions, each user had a preexisting relationship with an FCM or an IB independent of the TSV. Because Phantom’s proposed activities contemplate introducing users to specific registered counterparties without requiring such a preexisting relationship, Phantom could not rely on the existing TSV letters. Staff Letter No. 26-09 addresses this gap; subject to certain specified conditions, the CFTC stated it will not recommend the commission take enforcement action against Phantom or its relevant personnel for failure to register as an IB or as a person associated with an IB solely in relation to these activities. The CFTC’s press release is available here. Staff Letter No. 26-09 is available here.
SEC Proposes Amendments To Narrow Scope of Exchange Act Rule 15c2-11
On March 16, the SEC proposed amendments to Exchange Act Rule 15c2-11, which sets out information gathering and review requirements for broker-dealers that publish quotations for securities in the over-the-counter market. The proposed amendments would amend Rule 15c2-11 to refer to only equity securities, formally narrowing the rule’s scope and resolving long-standing ambiguity as to whether the rule applies to digital assets or other non-equity asset classes. The comment period will remain open for 60 days after Federal Register publication. The SEC’s press release is available here. Commissioner Hester Peirce’s statement is available here.
CFTC and Major League Baseball Sign MOU on Prediction Markets Integrity
On March 19, the CFTC and Major League Baseball (MLB) signed a Memorandum of Understanding—the first between the CFTC and a professional sports league—establishing a framework for the parties to discuss, cooperate, and exchange information on the integrity of professional baseball and related prediction markets, including through regular meetings between designated representatives. The MOU follows the CFTC Division of Market Oversight’s (DMO) March 12 Prediction Markets Advisory (Advisory), which advises DCMs on compliance with certain of their existing regulatory obligations under CEA and CFTC core principles for DCMs in the context of sports-related and other event contracts, with a focus on deterring and detecting misconduct. The MOU itself reflects the kind of cooperative information-sharing framework that the advisory identifies as essential to maintaining prediction market integrity. Among other things, the Advisory recommended that DCMs: (a) engage in pre-self-certification communications with relevant sports governing bodies when developing contract terms, compliance, and oversight programs; (b) explain in product submissions whether the contract is consistent with relevant league integrity standards; (c) establish information-sharing arrangements with relevant sports integrity monitoring organizations; (d) rely on official league data as event contracts’ settlement source; and (e) cooperate with league-run investigations and reference league integrity standards to guard against manipulation and insider trading. DMO emphasized in the Advisory that DCMs should take proactive steps to ensure their markets comply with the CEA and CFTC regulations. DMO also noted that the CFTC was in discussions with sports leagues, so the CFTC may announce additional MOUs in the near future as well. The CFTC’s press release is available here. The full text of the MOU is available here. The Advisory is available here.
Australian Senate Committee Endorses Digital Assets Framework Bill
On March 16, Australia’s Senate Economics Legislation Committee published a report recommending passage of the Corporations Amendment (Digital Assets Framework) Bill 2025, which would integrate cryptocurrency platforms and digital asset custody providers into the country’s existing financial services regime. The bill, introduced to the Australian Parliament on November 26, 2025, would amend the Corporations Act 2001 and the Australian Securities and Investments Commission Act 2001 to define core concepts such as “digital tokens,” “digital asset platforms,” and “tokenized custody platforms” and to establish licensing, disclosure, and conduct obligations for operators of these platforms. Under the proposed framework, operators of digital asset platforms and tokenized custody services would generally be required to hold an Australian Financial Services License. The bill is available here.
New Zealand FMA Designates NZDD Stablecoin as Not a Financial Product
On March 11, New Zealand’s Financial Markets Authority (FMA) issued a designation notice under the Financial Markets Conduct Act 2013 ruling that the NZDD stablecoin–a New Zealand dollar-pegged digital token issued by ECDD Holdings Limited–is not a financial product. The FMA determined that “the economic substance of the NZDD stablecoin is that it is not a debt security, as the NZDD stablecoin is not an investment, and no income, interest or other gain is paid to the NZDD stablecoin holder.” The designation was issued through the FMA’s fintech sandbox program. Separately, the FMA announced plans to introduce a restricted “on-ramp” license for fintech firms entering the market under controlled conditions. The FMA designation notice is available here. The FMA’s sandbox expansion announcement is available here.
Canada’s FINTRAC Revokes Registrations of 23 Crypto-Linked Money Services Businesses
On March 17, Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) revoked the registrations of 23 money services businesses (MSBs), all of which offer cryptocurrency-related services, in the agency’s most sweeping single-day enforcement action against the digital asset sector. Finance Minister François-Philippe Champagne stated, “This represents a significantly increased pace of action, and our government will maintain this momentum.” Champagne added that the government “will continue to monitor and pursue new measures to address risks posed by virtual currency businesses, such as cryptocurrency MSBs and crypto ATMs, which can be used to facilitate money laundering and fraud.” The Finance Minister’s statement is available here. FINTRAC’s list of MSBs with revoked registrations is available here.
