The last time I substantively wrote about cryptocurrencies and the crypto industry was in April 2023, when the SEC was firmly hostile against the industry and a slew of negative events (FTX collapse, etc..) pretty well eliminated crypto as an active element in the capital markets (see HERE). That has changed!
Here is a recap of the newly regenerated crypto capital markets initiatives:
Digital Asset Executive Order
On January 23, 2025, President Trump signed an executive order entitled “Strengthening American Leadership in Digital Financial Technology” supporting the growth of the digital asset industry in the U.S. The order specifically:
- Protects and promotes the ability of individual citizens and private-sector entities to access and use open blockchain including the ability to develop and deploy software to participate in mining and validating crypto assets;
- Allow individual citizens and private-sector entities to self-custody digital assets;
- Promotes and protects the U.S. dollar through the development and growth of dollar backed stablecoins;
- Supports the development of regulatory clarity and jurisdictional boundaries in the digital industry;
- Prohibiting the establishment, issuance, circulation, and use of Central Bank Digital Currencies within the U.S.;
- Revoking the Department of Treasury’s Framework for International Engagement on Digital Assets; and
- Establishes the President’s Working Group on Digital Asset Markets which, among other matters, requires agencies, including the SEC, to identify all regulations, guidance documents, orders and other items effecting the digital asset sector, by March 23, 2025. The Working Group must recommend regulatory and legislative proposals by July 23, 2025. Further the Working Group must evaluate the potential for the U.S. to create and maintain a digital asset stockpile.
SEC Accounting Staff SAB No. 122
Effective January 30, 2025, the SEC issued Accounting Staff SAB No. 122 which rescinded prior SAB No. 121. SAB No. 121 required crypto platforms to treat their obligations to safeguard crypto-assets held for their platforms as liabilities. This requirement in essence prevented banks and other financial institutions from serving as custodians for digital assets. SAB No. 122 has a retroactive effect allowing entities to apply the new standards in financial statements for the period ending December 31, 2024, and forward.
SEC Crypto Task Force
On March 3, 2025, the SEC created a Crypto Task Force led by Commissioner Hester Peirce. The Task Force is charged with developing a comprehensive and clear regulatory framework for crypto assets. The Task Force’s specific directives include:
- Clarifying the status of different types of crypto assets under the securities laws;
- Identifying areas outside the SEC’s jurisdiction, including through responses to no-action letter requests;
- Providing temporary and retroactive relief for certain coin and token offerings;
- Providing modified paths to registration including through Regulation A and crowdfunding;
- Updating guidance for “special purpose broker dealers” allowing the custody of both security and non-security crypto assets;
- Providing a framework for custody of crypto assets by registered investment advisors;
- Providing clarity around crypto-lending and staking programs;
- Reconsidering the approach to crypto exchange traded programs;
- Providing guidance on how clearing agencies and transfer agents can provide services for digital assets including tokenized securities; and
- Developing a cross-border sandbox that would allow cross-border experimentation on a limited scale.
The group encourages open communications with the public, including the ability to request a meeting with its members. The Task Force will also host a series of roundtables to discuss key areas of interest in the regulation of crypto assets.
Enforcement Freedom
Providing industry wide relief from the enforcement arena the SEC has:
- Dropped its cases against Coinbase, Uniswap and Robinhood;
- Agreed to dismiss its cases against Consensys and Kraken;
- Paused litigation against Binance;
- Dropped its case against cryptocurrency influencer Ian Balina related to the promotion of the SPRK token;
- Closed investigations involving Open Sea, Uniswap, Bored Ape NFT issuer Yuga Labs, and Gemini;
- Dismissed its case against Cumberland, a major liquidity provider in the crypto market; and
- Is wrapping up its case against Ripple.
SEC Staff Statement on Meme Coins
On February 27, 2025, the SEC Division of Corporation Finance issued a “Staff Statement on Meme Coins” confirming that the SEC does not view “meme coins” as securities for the purposes of federal securities laws. The Statement defines a “meme coin” as a type of crypto asset inspired by internet memes, characters, current events or trends for which the promoter seeks to attract an enthusiastic online community to purchase and trade the coin.
The Statement lists certain characteristics of meme coins including: (i) they are typically purchased for entertainment, social interaction and cultural purposes; and (ii) their value is driven by market demand and speculation. Meme coins are analogous to collectibles and have limited or no use or functionality.
It is the SEC’s view that transactions in meme coins do not involve the offer or sale of securities under the Securities Act and as such do not need to be registered or have an available exemption to be sold. Likewise, purchasers do not have the protection of the federal securities laws.
Turning to the Howey test, the SEC notes that a meme coin does not yield or convey rights to future income, profits or assets of a business and therefore are not a security on their face. As discussed many times in my blogs, even if a “thing” is not a security in and of itself, it may be an investment contract and therefore a security when analyzed under the Howey test. Howey defines an investment contract as:
“… an investment contract for purposes of the Securities Act means a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party…. Such a definition…permits the fulfillment of the statutory purpose of compelling full and fair disclosure relative to the issuance of the many types of instruments that in our commercial world fall within the ordinary concept of a security…. It embodies a flexible rather than a static principle, one that is capable of adaptation to meet the countless and variable schemes devised by those who seek the use of the money of others on the promise of profits.”
The offer and sale of meme coins does not involve an investment in an enterprise nor is it undertaken with a reasonable expectation of profits derived from the entrepreneurial or managerial efforts of others. A meme coin is not an investment in an enterprise and any profit would not be the result of the efforts of others. Further meme coin promoters are not undertaking any particular managerial or entrepreneurial efforts related to the coin. For more on Howey see HERE and HERE.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
Ms. Anthony is a member of various professional organizations including the Crowdfunding Professional Association (CfPA), Palm Beach County Bar Association, the Florida Bar Association, the American Bar Association and the ABA committees on Federal Securities Regulations and Private Equity and Venture Capital. She is a supporter of several community charities including the American Red Cross for Palm Beach and Martin Counties, Susan Komen Foundation, Opportunity, Inc., New Hope Charities, the Society of the Four Arts, the Norton Museum of Art, Palm Beach County Zoo Society, the Kravis Center for the Performing Arts and several others.
Ms. Anthony is an honors graduate from Florida State University College of Law and has been practicing law since 1993.
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