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.

President Donald Trump Accuses Banks of Undermining GENIUS Act, Urges Passage of CLARITY Act

On March 4, Trump posted on Truth Social accusing the banking industry of undermining the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and holding the Digital Asset Market Clarity Act of 2025 (CLARITY Act) “hostage.” In the post, Trump stated, “The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don’t get The Clarity Act taken care of.” He added that banks “should not be trying to undercut The Genius Act, or hold The Clarity Act hostage” and that “[t]hey need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.” Trump’s Truth Social post is available here.

SEC Submits Interpretive Guidance on Application of Federal Securities Laws to Crypto Assets for Review

On March 3, the U.S. Securities and Exchange Commission (SEC) submitted to the White House’s Office of Information and Regulatory Affairs (OIRA) a Commission-level interpretation titled “Commission Interpretation on Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets.” The guidance is expected to establish a “token taxonomy,” a framework for categorizing crypto assets to determine which fall under SEC jurisdiction as securities and which may be treated differently. OIRA’s review must be completed before the SEC’s commissioners hold a final vote on the interpretation. The filing is available here.

Indiana Governor Signs Bitcoin Rights Bill into Law

On March 3, Indiana Gov. Mike Braun signed House Bill 1042, titled Regulation and Investment of Cryptocurrency, establishing new protections for digital asset users and integrating cryptocurrency into state-managed financial programs. The law (i) formally defines cryptocurrency in Indiana state statute as a digital medium of exchange secured by cryptography and not issued by a central authority; (ii) prohibits state and local governmental units from enacting rules that single out digital asset transactions for special taxation or discriminatory treatment compared to other forms of payment; (iii) protects the right of individuals to self-custody digital assets, preventing most public agencies from restricting a person’s ability to hold cryptocurrency in a private wallet; (iv) prevents state and local agencies from prohibiting an individual’s ability to accept cryptocurrency as payment for lawful goods and services or to engage in mining or staking activities; and (v) requires certain state-administered retirement and savings plans to offer participants a self-directed brokerage account with at least one cryptocurrency investment option by July 1, 2027. The law takes effect July 1, 2026. The bill is available here.

FATF Publishes Targeted Report on Stablecoins and Unhosted Wallets

On March 3, the Financial Action Task Force (FATF) published a targeted report highlighting illicit finance risks linked to stablecoins and peer-to-peer (P2P) transactions via unhosted wallets. Key findings and recommendations include the following: (i) stablecoins have expanded rapidly, with over 250 in circulation by mid-2025 and a market capitalization exceeding $300 billion, with stablecoins accounting for 84 percent of illicit virtual asset transaction volume in 2025; (ii) P2P transfers via unhosted wallets represent a “key vulnerability”; (iii) stablecoin issuers may face difficulties in controlling cross-chain activities, which may fall outside counter-illicit finance controls; (iv) stablecoin issuers are encouraged to implement risk-based technical and governance controls, including the ability to freeze, burn, or withdraw stablecoins in the secondary market; (v) jurisdictions should consider requiring stablecoin issuers to conduct customer due diligence at redemption, implement transaction limits, and establish 24/7 law enforcement contact points; and (vi) virtual asset service providers should collect originator and beneficiary information even when dealing with unhosted wallets to comply with the travel rule. The FATF report is available here.

Kraken Financial Becomes First Digital Asset Bank To Receive a Federal Reserve Master Account

On March 4, the Federal Reserve Bank of Kansas City granted Kraken Financial, a Wyoming-chartered special purpose depository institution affiliated with crypto exchange Kraken, a Federal Reserve master account — making it the first digital asset bank in U.S. history to gain direct access to the Federal Reserve’s payment infrastructure. The account is limited in scope: Kraken will not earn interest on reserves held at the central bank or have access to the Fed’s emergency lending facilities, similar to the “skinny” master account concept proposed by the Fed’s board of governors in October 2025. Kraken’s announcement is available here.

OCC Finalizes Rule Clarifying National Trust Bank Powers

On Feb. 27, the Office of the Comptroller of the Currency (OCC) issued a final rule amending its chartering regulation at 12 CFR 5.20 to clarify the long-standing authority of national trust banks to engage in nonfiduciary activities in addition to their fiduciary activities. The final rule replaces references to “fiduciary activities” with the statutory phrase “operations of a trust company and activities related thereto.” The change resolves ambiguity created by a 2003 amendment to § 5.20, which imposed a requirement that special purpose national banks engaging in nonfiduciary activities perform at least one core banking function — receiving deposits, paying checks, or lending money. Although the 2003 language was intended to apply only to non-trust special purpose banks, it had been read by some commenters as limiting national trust banks to strictly fiduciary activities. The final rule confirms that the core banking function requirement does not apply to national trust banks, meaning they may engage in nonfiduciary activities such as custody, safekeeping, and related services without also accepting deposits, paying checks, or lending money. The rule is effective April 1, 2026. The OCC bulletin is available here.

Morgan Stanley Applies for OCC National Trust Bank Charter To Have Custody of Crypto Assets

On Feb. 27, the OCC published the nonconfidential portions of an application received Feb. 18 from Morgan Stanley for a de novo national trust bank charter. The proposed entity, named Morgan Stanley Digital Trust, National Association, would operate as a wholly owned subsidiary of Morgan Stanley and would (i) have custody of certain digital assets on behalf of clients; (ii) execute purchases, sales, swaps, and transfers of digital assets to support client investment activities; and (iii) facilitate fiduciary staking of digital assets. If approved, the charter would make Morgan Stanley one of the first major U.S. banks to provide direct, federally regulated crypto custody. The OCC filing is available here.