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 Reports Decline in FY2026 Enforcement Actions, Highlights Crypto Fraud Cases
On Nov. 10, the Securities and Exchange Commission (SEC) announced that it filed 348 enforcement actions during fiscal year 2026, a 23.7 percent decrease from 456 actions in fiscal year 2025. The 2026 total included 235 stand-alone enforcement actions and 113 follow-on administrative proceedings. The SEC highlighted several crypto-related matters, including charges against three purported crypto asset trading platforms and four investment clubs for allegedly defrauding retail investors of at least $14 million, as well as charges against the founder of a bitcoin mining business for allegedly misappropriating $48.5 million after raising more than $95.6 million from approximately 6,400 investors. The agency also cited an enforcement action involving audit failures related to FTX and a jury verdict arising from the $300 million CryptoFX Ponzi scheme. Separately, the SEC announced that its newly established Office of Super Intelligence and Analytics is using enhanced analytical tools, including blockchain and financial-flow analysis, to identify potential misconduct and improve investigative efficiency. See the announcement here.
SEC Backs CFTC in Legal Challenge to Single-Stock Perpetual Futures
On Nov. 9, the SEC filed an amicus brief in support of the Commodity Futures Trading Commission (CFTC) in litigation challenging the authorization of perpetual futures contracts tied to individual U.S. stocks. The Capital Markets Alliance Association argued that the contracts should be regulated as security-based swaps rather than security futures. The SEC countered that classifying the products as security futures does not remove them from its jurisdiction, emphasizing that security futures remain subject to joint SEC and CFTC oversight. The SEC also noted that its review of the exchanges’ related rule changes remains pending and expressly declined to take a position on whether those changes should be abrogated. On Nov. 3, a federal district court denied the plaintiff’s request for a temporary restraining order, based on insufficient evidence of irreparable harm, although it found that the plaintiff was likely to succeed on its claim that the CFTC exceeded its statutory authority. The litigation remains pending. See the amicus brief here. See the order here. (subscription required to access some links)
FinCEN Scraps Cross-Border Recordkeeping Plan
On Nov. 6, the Financial Crimes Enforcement Network (FinCEN) and the Federal Reserve Board announced the withdrawal of an October 2020 proposed rule that would have lowered from $3,000 to $250 the threshold for certain cross-border funds transfers and transmittals of funds subject to recordkeeping and Travel Rule requirements. The proposal also would have clarified the application of those requirements to transactions involving convertible virtual currencies and digital assets with legal tender status. In withdrawing the proposal, the agencies cited the passage of more than five years since its issuance, significant developments in virtual currency markets and emerging legal frameworks, and the need for additional public input before considering amendments to the existing requirements. The agencies stated that they would take no further action on the proposal and that any future changes would be subject to an additional opportunity for public comment. The withdrawal leaves the existing $3,000 threshold unchanged and does not eliminate existing Travel Rule obligations applicable to qualifying cryptocurrency transactions. See the notice here.
FinCEN Orders U.S. Financial Institutions To Halt Funds Transfers Involving MEXC Global
On Nov. 6, FinCEN issued an order under Section 9714 of the Combating Russian Money Laundering Act prohibiting covered U.S. financial institutions from transmitting funds, including convertible virtual currency, to or from cryptocurrency exchange MEXC Global. FinCEN designated MEXC Global as a financial institution of primary money-laundering concern in connection with Russian illicit finance, finding that the exchange facilitated approximately $16.7 billion in transactions linked to illicit activities between May 2021 and May 2026, including sanctions evasion involving Russia and Iran, transactions benefiting North Korean actors, and cybercrime. The order, which takes effect 30 days after publication in the Federal Register, is intended to prevent MEXC Global from accessing the U.S. financial system through covered financial institutions. See the order here and the announcement here.
BPI Calls for Expanded AML/CFT Oversight of Digital Asset Intermediaries
On Nov. 6, the Bank Policy Institute (BPI) urged the U.S. Department of the Treasury to address gaps in anti-money laundering and countering the financing of terrorism (AML/CFT) requirements for digital asset intermediaries. In a letter citing FinCEN’s withdrawal of three proposed digital asset-related rules, BPI argued that banks lack sufficient visibility into cryptocurrency transactions involving self-hosted wallets, mixers, decentralized exchanges, and cross-chain bridges. BPI recommended that FinCEN and the Office of Foreign Assets Control ensure that digital asset service providers and persons operating or controlling decentralized finance arrangements are subject to appropriate AML/CFT obligations under the Bank Secrecy Act. BPI also urged Treasury to seek additional legislative authority where necessary; address limitations on sanctions targeting cryptocurrency mixing services; and facilitate information sharing among financial institutions, digital asset businesses, and law enforcement. See the letter here.
