New Federal Initiatives for Digital Asset Regulatory Frameworks

The establishment by the Securities and Exchange Commission (SEC) of a Crypto Task Force and the issuance by President Trump of an executive order entitled “Strengthening American Leadership in Digital Financial Technology” (the “Executive Order”) are two of the first statements from the Trump administration regarding the regulation of digital assets in the United States. Concurrently, the SEC repealed Staff Accounting Bulletin No. 121 (“SAB 121”), containing accounting guidance related to crypto-assets (as defined in SAB 121).

SEC Crypto Task Force

On January 21, 2025, Acting SEC Chairman Mark Uyeda established a Crypto Task Force, led by Commissioner Hester Peirce, to develop “a comprehensive and clear regulatory framework for crypto assets.” The Crypto Task Force’s stated goal is to provide a regulatory framework applicable to the crypto industry within the existing “statutory framework provided by Congress” and any possible future framework that may evolve though Congress.

According to the SEC’s press release, the task force’s remit will be as follows:

• engage with SEC staff and the public to determine a regulatory path for the regulation of digital assets;
• develop registration pathways for digital asset market participants;
• develop applicable disclosure frameworks;
• realign SEC enforcement resources; and
• coordinate with other federal agencies, including the CFTC, and state and international counterparts.

The Executive Order

On January 23, 2025, President Trump signed the Executive Order with the stated purpose to “promote [U.S.] leadership in digital assets and financial technology while protecting economic liberty.” The Executive Order sets out four key policies, which are summarized below.

First, it outlines various policy aims, including: (1) protecting access to open public blockchain networks for lawful purposes; (2) ensuring the sovereignty of the U.S. dollar through lawful dollar-backed stablecoins; (3) securing fair access to banking services; (4) safeguarding against the risks of central bank digital currencies (CBDCs), including by forbidding their establishment, issuance, circulation, and use in the U.S.; and (5) providing regulatory clarity and certainty through technology-neutral regulations.

Second, it revokes an executive order from the previous administration entitled “Ensuring Responsible Development of Digital Assets” (Executive Order 14067), which formerly served as the Department of Treasury’s digital asset framework.

Third, it establishes the President’s Working Group on Digital Asset Markets (the “Working Group”) within the National Economic Council, which will be chaired by David Sacks, the White House’s Special Advisor for AI and Crypto, and its membership will include the specified federal agency leaders, including the secretary of the treasury, chairman of the SEC, and chairman of the CFTC, among others.

According to the Executive Order, the Working Group’s stated mission is to:

• develop a federal regulatory framework for digital assets, with a focus on the oversight of market structure, risk management, and consumer protection; and
• evaluate the potential creation and maintenance of a national digital asset stockpile and suggest criteria for establishing such a stockpile, potentially from cryptocurrencies lawfully seized[1] by the federal government during law enforcement efforts.

The Executive Order also establishes the following timelines for the Working Group:

• Within 30 days of the Executive Order, all relevant agencies are required to identify all regulations that affect the digital asset sector.
• Within 60 days of the Executive Order, all agencies that identified regulations that affect the digital asset sector must submit recommendations on whether those regulations should be rescinded, modified, or adopted as part of the new regulatory framework.
• Within 180 days of the Executive Order, the Working Group must submit a report to President Trump with recommendations for regulatory and legislative proposals.

Fourth, the Executive Order prohibits actions to establish, issue, circulate, or use CBDCs within the U.S., except as required by law. The Executive Order requires the immediate termination of any ongoing plans or initiatives related to the creation of a CBDC within the U.S. and forbids any further action to develop or implement such plans or initiatives.

SEC Repeal of SAB 121

As its first major digital asset effort under the new administration, on January 23, 2025, the SEC repealed SAB 121. SAB 121 required companies that take custody of crypto-assets on behalf of their users to include those crypto-assets as liabilities on their balance sheets. This contributed to the decision by financial institutions to refrain from providing custody services for crypto-assets to customers. This in turn limited the scope of financial services that could be offered in this space by regulated financial institutions.

[1] It is unlikely that the Executive Order intended to cover cryptocurrencies seized but not forfeited. Therefore, this should also be read to include cryptocurrencies lawfully forfeited.