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.
OCC Allows U.S. Banks To Hold and Use Cryptocurrency
On Nov. 18, the Office of the Comptroller of the Currency (OCC) issued new guidance allowing national banks to hold and spend cryptocurrency on their balance sheets when necessary to support permissible banking activities, such as paying blockchain network fees, operating distributed-ledger platforms, or testing digital-asset systems. The interpretive letter reverses prior restrictions that required supervisory approval for crypto involvement and discouraged interaction with public blockchain networks, reflecting a broader regulatory shift under new leadership and the current administration. While banks may now directly manage limited amounts of digital assets and can outsource custody to approved third parties, the OCC emphasized that all crypto-related operations remain subject to standard risk-management expectations. The move continues the deregulatory momentum that began with the rollback of constraints under the Biden administration and comes amid growing interest from traditional and digital-asset firms seeking national bank or trust charters. See Interpretive Letter 1186 here.
CFTC Nomination Senate Hearing Held for Michael Selig
On Nov. 19, Michael Selig appeared before the United States Senate Committee on Agriculture, Nutrition, and Forestry as the nominee to chair the Commodity Futures Trading Commission (CFTC). Selig currently serves as the Chief Counsel of the Security and Exchange Commission’s (SEC) Crypto Task Force. The hearing centered on four priorities: (1) equipping the agency to supervise rapidly evolving markets; (2) establishing a clear, principles-based framework for digital asset spot markets, if authorized by Congress; (3) preserving accessible, resilient hedging markets for agriculture and energy, including recalibrating burdens on futures commission merchants and reducing opaque “no-action” and unwritten guidance; and (4) resolving legal and risk issues around event contracts and prediction markets. Selig committed to being a “steady cop on the beat” and pledged faster and more predictable licensing, better cross-border substituted compliance, and close interagency coordination with the SEC and Treasury. The full hearing is available here.
New Hampshire Approves First Bitcoin-Backed Conduit Bond
On Nov. 17, New Hampshire authorized a $100 million Bitcoin-backed conduit bond, allowing corporate borrowers to use over-collateralized Bitcoin while shielding taxpayers from repayment risk. Developed with Wave Digital Assets and Rosemawr Management, the structure places Bitcoin collateral within traditional fixed-income norms, including liquidation thresholds to protect investors. The state’s Business Finance Authority (BFA) will oversee the conduit financing without assuming liability, building on recent legislation establishing a strategic Bitcoin reserve in the state. Fees and potential collateral gains will flow into the state’s Bitcoin Economic Development Fund, and officials view the program as a controlled test of Bitcoin’s performance as high-grade collateral. Positioned as the first municipal model of its kind, the structure may provide a template for integrating digital assets into the broader global bond market and influence other states exploring regulated crypto-backed borrowing. See minutes from the BFA board meeting here.
SEC Division of Examinations Announces 2026 Priorities, Notably Omitting Cryptocurrency
On Nov. 17, the Securities and Exchange Commission’s (SEC) Division of Examinations (Division) released its 2026 examination priorities, which aim to provide transparency and guide compliance efforts. The Division, which examines investment advisors, investment companies, broker-dealers, and others, said that it will focus on fiduciary duties and standards of conduct and will assess compliance with new rules, including the 2024 amendments to Regulation S‑P. The announcement did not address cryptocurrency as a Division examination priority, breaking with its 2024 and 2025 priority announcements. The SEC press release states that the 2026 priorities are not “an exhaustive list of all the areas the Division will focus on in the upcoming year.” See the SEC press release here.
Japan’s Financial Services Agency Proposes To Classify 105 Cryptocurrencies as Financial Products
On Nov. 16, Japan’s Financial Services Agency (FSA) announced that it plans to classify cryptocurrencies, including Bitcoin and Ethereum, as financial products under the Financial Instruments and Exchange Act (FIEA), bringing them under the same regulatory framework as stocks and bonds and requiring exchanges to disclose each token’s issuer, blockchain infrastructure, and history of volatility while complying with stricter insider-trading rules. As part of its broader crypto reform effort, the FSA also aims to amend the tax regime by replacing the current “miscellaneous income” classification I with a flat 20 percent tax on cryptocurrency gains. These proposals are expected to be debated during the country’s 2026 parliamentary session. A local newspaper article citing the Financial Services Agency can be found here.
