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 Trump Pardons Binance Founder Changpeng Zhao
On Oct. 23, President Donald Trump issued a presidential pardon for Changpeng Zhao, the founder of cryptocurrency exchange Binance, who in 2023 had plead guilty to various money laundering charges. In a statement, White House Press Secretary Karoline Leavitt stated that Trump acted within his constitutional authority, framing the pardon as part of his opposition to what he called the prior administration’s “war on cryptocurrency.” Zhao, who stepped down as Binance CEO following a $4.3 billion settlement with the U.S. government, had served a four-month prison sentence. The pardon allows Zhao to potentially return to the company he founded in 2017.
U.S. Senate Members Hold Private Roundtable With Crypto CEOs on Market Regulation
On Oct. 22, members of the U.S. Senate from both parties met privately with leading cryptocurrency executives to discuss comprehensive market regulation for the digital asset industry. The roundtable addressed key policy areas, including clearer jurisdictional boundaries between the Securities and Exchange Commission and the Commodity Futures Trading Commission, the creation of a federal framework for stablecoins and payment systems, enhanced anti-money laundering and sanctions compliance, stronger consumer and investor protections, and measures to improve market integrity. Participants also examined issues related to custody standards, disclosure requirements, prudential oversight, and the tax treatment of digital assets. Despite reported tensions during the discussions, bipartisan support for proposed market structure legislation remains strong. The meeting has renewed optimism among Washington lawmakers and crypto industry leaders that a regulatory framework could be implemented as early as 2026.
New York Lawmakers Introduce Bills To Tax High-Energy Crypto Mining
On Oct. 17, Democratic lawmakers introduced companion bills in the New York State Assembly and Senate, Assembly Bill A9138 and Senate Bill S8518, that would impose an excise tax on electricity used by proof-of-work crypto mining operations. Proposed by Assemblymember Anna Kelles and Sen. Liz Krueger, the legislation targets large-scale miners based on their energy consumption, with rates ranging from 2 to 5 cents per kilowatt-hour (kWh) for usage exceeding 2.25 million kWh annually. Mining facilities powered solely by off-grid renewable energy would be exempt, aiming to incentivize greener practices. Revenue from the tax would support the state’s Energy Affordability Program. Critics argue the measure could render mining economically unviable, potentially driving operations out of New York to more crypto-friendly states. The bills remain in committee, with a proposed implementation date of Jan. 1, 2027. See Assembly Bill A9138 here and Senate Bill S8518 here.
Wyoming Tests State-Backed Stablecoin Across Seven Blockchains
On Oct. 20, the state of Wyoming launched a large-scale pilot of its government-backed stablecoin, Frontier (FRNT), by deploying 700,000 tokens across seven major blockchains. Backed one-to-one by U.S. dollars and short-term Treasuries with a 2 percent overcollateralization requirement, the token’s reserves are managed by Franklin Advisers and audited monthly by The Network Firm to ensure transparency. The multichain deployment aims to test cross-chain functionality and increase accessibility. A prior pilot showed major efficiency gains in payment processing, reinforcing the state’s ambition to use blockchain for improved financial operations. While no public release date is set, Wyoming officials commit to ongoing transparency as they explore the token’s future role in financial systems. See the draft token management rules here.
Federal Reserve Explores Direct Payment Access for Crypto Firms
On Oct. 21, U.S. Federal Reserve Gov. Christopher Waller stated the Federal Reserve is considering the introduction of a new type of payment account that is designed to make it easier for smaller companies to participate in the central bank’s payment system, signaling the end of the crypto industry’s banking access challenges. Speaking at the Payments Innovation Conference in Washington, D.C., Waller emphasized that expanding access could foster innovation and competition in the U.S. payments ecosystem, particularly for underserved markets. The new payment accounts would seek to grant full access to fintech companies seeking to utilize the Federal Reserve’s payment services, which are currently reserved for large banks and financial institutions through the Federal Reserve’s “master accounts.” While no formal proposal has been issued, Waller’s comments suggest a potential shift in how the Federal Reserve views the role of fintech and crypto firms in core financial infrastructure. Waller’s speech can be viewed and heard here.
HMRC Intensifies Crypto Tax Enforcement Amid Broader UK Digital Finance Push
The UK’s government department responsible for the collection of taxes, His Majesty’s Revenue & Customs (HMRC), has significantly escalated its crypto tax enforcement, issuing 65,000 warning letters, more than double last year’s total, to investors suspected of underreporting or evading taxes on digital assets. This increase reflects a broader global trend, with countries like India also using shared data to pursue crypto tax evaders. Beginning in 2026, HMRC’s oversight will expand further under the Crypto-Assets Reporting Framework, mandating detailed transaction reporting from exchanges. UK tax rules treat crypto as either capital gains or income depending on how it’s acquired, with recent rate hikes intensifying compliance pressure. Simultaneously, the UK is embracing digital finance innovation by lifting its ban on crypto-based exchange-traded notes, planning a “digital markets champion” to oversee blockchain integration, and advancing digital securities initiatives through the new Dematerialisation Market Action Taskforce. All these steps are aimed at modernizing wholesale financial infrastructure while maintaining regulatory oversight. An example of the warning letter can be read here.
British Columbia Formalizes Ban on New Crypto Mining Connections
On Oct. 20, the government of British Columbia (BC) introduced the Energy Statutes Amendment Act, which permanently bans new cryptocurrency mining operations from connecting to the BC Hydro electricity grid. This formalizes a temporary suspension first introduced in December 2022 and reflects the province’s effort to manage surging electricity demand by prioritizing sectors that deliver greater economic and environmental value. The legislation does not affect existing crypto mining operations but blocks future projects from accessing public power infrastructure. The province cited low levels of both job creation and economic contribution of crypto mining as a justification for the ban, positioning it alongside new caps on electricity allocations for artificial intelligence and data centers. These measures are part of a broader strategy to preserve clean energy resources for industries aligned with BC’s climate and investment goals. The BC Government News press release can be read here.
