Agencies ease crypto scrutiny as White House advances its digital assets policy

Introduction

Recent actions by federal agencies and the White House could herald a sea change in US policy toward digital assets. The positivity reflects the Trump Administration’s opening move to support the growth of digital assets in the form of an Executive Order (EO) issued on January 23, 2025. The EO directed the rescission or modification of regulatory positions on cryptocurrencies across federal agencies and established a digital asset working group chaired by the White House crypto “czar.” One objective of the working group is to propose within 180 days, or by July 22, 2025, a regulatory framework for digital assets, as well as to evaluate whether to create a “national digital asset stockpile.”

Below is a summary of key digital asset-related actions since the start of the second Trump Administration. Although many of these actions leave the specifics for later, certain agencies have taken definitive steps, while the White House convened a historic crypto summit and issued an EO on March 6, 2025, creating not only a digital asset stockpile but also a bitcoin reserve.

I. Federal agency and other actions quickly follow the January 23 EO

a. OCC Interpretive Letter 1183

Perhaps the most significant recent development was the Office of the Comptroller of the Currency (OCC)’s publication on March 7 of Interpretive Letter 1183, titled “OCC Letter Addressing Certain Crypto-Asset Activities” (Letter). The Letter rescinds earlier OCC guidance, Interpretative Letter 1179, which required OCC-supervised financial institutions to demonstrate in advance that they maintained sufficient controls to conduct certain crypto-asset activities in a “safe and sound manner.” The Letter also announced the OCC’s withdrawal from two interagency statements generally unfavorable to banks’ cryptocurrency activities published alongside the Federal Deposit Insurance Corporation (FDIC) and the Board of Governors of the Federal Reserve System (Federal Reserve): (1) the Joint Statement on Crypto-Asset Risks to Banking Organizations, and (2) the Joint Statement on Liquidity Risks to Banking Organizations Resulting from Crypto-Asset Market Vulnerabilities.

National banks and federal savings associations may now once more provide crypto-asset custody services, hold dollar deposits that serve as reserves for dollar-backed stablecoins, and act as a validator node on a distributed ledger network (eg, a blockchain) without awaiting the OCC’s “non-objection.” Nonetheless, the Letter reiterated that institutions supervised by the OCC must still conduct any crypto-asset activities “in a safe, sound, and fair manner.” Other OCC interpretative letters providing guidance to supervised institutions’ crypto-related activities remain in effect, namely, Interpretative Letter 1170, Interpretative Letter 1172, and Interpretative Letter 1174. The full list of policy positions the OCC is rescinding or withdrawing from may be found in the OCC’s bulletin, here.

Other federal prudential regulators, however, still require some form of pre-approval before banks may engage in these crypto-asset activities. As of the date of this alert, neither the FDIC nor the Federal Reserve has expressly withdrawn from these statements, and neither regulator has yet rescinded guidance that requires the financial institutions they supervise to provide prior notification before engaging in such crypto-asset activities. See, eg: (1) FDIC, Notification of Engaging in Crypto-Related Activities; (2) Federal Reserve, SR 22-6 / CA 22-6: Engagement in Crypto-Asset-Related Activities by Federal Reserve-Supervised Banking Organizations; and (3) Federal Reserve, Policy Statement on Section 9(13) of the Federal Reserve Act.

Rescission of similar guidance from the FDIC and Federal Reserve seems possible given the OCC’s own actions and the January 23 EO. Indeed, President Donald Trump used the crypto summit to declare the end of Operation Chokepoint 2.0 – the reported practice by federal regulators of pressuring financial institutions to debank digital asset customers and effectively halt crypto-related activities.

b. Other federal agency actions

Besides the OCC, other federal agencies have responded swiftly to the January 23 EO’s directive to revisit digital asset-related regulations and guidance. In January, the Securities and Exchange Commission (SEC) repealed Staff Accounting Bulletin 121 (SAB 121), an internal guidance that had increased the accounting burdens on banks to act as digital asset custodians. As discussed in our July 2024 and February 2025 editions of Blockchain and Digital Asset News and Trends, SAB 121 had long been targeted by bipartisan repeal efforts. More recently, at the direction of SEC Commissioner Hester Peirce – who is leading the SEC’s newly established crypto task force – the SEC invited public input on reexamining the status of various crypto assets as “securities” under the federal securities laws.

Enforcement priorities have also refocused. In February, the SEC began dropping high-profile enforcement actions against several crypto exchanges, a DeFi platform, and a non-fungible token marketplace. Not to be left out, the Commodity Futures Trading Commission (CFTC) announced in February that it would “stop regulation by enforcement,” reorganizing its enforcement division to focus on victims of fraud. Acting CFTC Chair Caroline Pham later announced plans to launch a “digital asset markets pilot program” as a sandbox for tokenized non-cash collateral such as stablecoins. And on March 11, 2025, during a keynote address at an industry conference, Acting Chair Pham reportedly announced that parties with non-fraud, non-market manipulation cases should take the opportunity to propose a resolution with the CFTC.

Overall, 2025 has seen a sharp drop in enforcement actions against crypto actors, with actions in this space prioritizing fraud, anti-money laundering, and sanctions violations rather than more technical transgressions. For example, the SEC charged a blockchain developer in January with “rug pull” fraud, while the CFTC secured a judgement against crypto Ponzi scheme fraudsters. Enforcement priorities at the Office of Foreign Assets Control (OFAC) within the Department of the Treasury (Treasury) appear aligned with the Trump Administration’s goals too, sanctioning, in March, cryptocurrency addresses associated with a darknet marketplace facilitating fentanyl sales. The Department of Justice (DOJ) has also been active; first, a cryptocurrency exchange pleaded guilty for failing to register as a money transmitter; second, in an interagency and international effort, the DOJ disrupted and took down the online infrastructure used to operate Garantex, an OFAC-sanctioned cryptocurrency exchange that allegedly facilitated money laundering by transnational criminal organizations, including terrorist organizations.

c. Stablecoin legislation and other congressional activity

Members of Congress are amplifying the January 23 EO’s policy of “promoting and protecting” the US dollar through the development of dollar-backed stablecoins. In February, Senator Bill Hagerty (R-TN) introduced the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, while Representatives French Hill (R-AR) and Bryan Steil (R-WI) released a discussion draft of the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act. Both bills would authorize the Federal Reserve, FDIC, and OCC to regulate stablecoin issuers. In March, the Senate voted to repeal the Internal Revenue Service (IRS) “DeFi Broker Rule,” which would classify decentralized software providers as “brokers.” At the Digital Assets Summit on March 7, Treasury Secretary Scott Bessent stated his goal to work with the IRS and OCC to “rescind and amend” the DeFi Broker Rule.

Both congressional and executive branch activities signal that work from the January 23 EO is far from finished. At the summit, Treasury Secretary Bessent reiterated that, “We are going to keep the US [dollar] the dominant reserve currency in the world, and we will use stablecoins to do that.” President Trump also urged Congress during the summit to pass a stablecoin bill for his signature by the August 2025 congressional recess.

II. With details scarce, the White House orders the creation of a Strategic Bitcoin Reserve and a Digital Assets Stockpile

a. Strategic Bitcoin Reserve

President Trump’s March 6 EO instructed the Secretary of Treasury to establish two distinct groups of official US digital asset holdings. The first, the Strategic Bitcoin Reserve (Reserve), will comprise solely bitcoin owned by the Treasury after final forfeiture through criminal or civil asset forfeiture proceedings. Nonetheless, the EO directs each other US government agency within 30 days, or by April 5, 2025, to “review its authorities to transfer” any bitcoin it owns to the Reserve and give an accounting to the Secretary of the Treasury on its bitcoin holdings. Unlike petroleum products held in the Strategic Petroleum Reserve, however, bitcoin in the Reserve may not be sold. Rather, bitcoin in the Reserve will be “maintained as reserve assets of the United States utilized to meet government objectives.” The Reserve is to be managed by a newly created office within the Treasury, which will “maintain control of custodial accounts” holding the Reserve’s bitcoin.

b. Digital Asset Stockpile

The second, the Digital Asset Stockpile (Stockpile), is to consist of a basket of digital assets other than bitcoin. Although the EO did not specify what these other digital assets will be, President Trump announced earlier that the Stockpile will include bitcoin and Ethereum and could include XRP, Cardano, and Solana. The Stockpile would be capitalized by such digital assets forfeited and “owned” by the Treasury. Other agencies are however similarly required to report and account to the Secretary of the Treasury on their transfer authorities and holdings of these assets by April 5, 2025. The Secretary of the Treasury is directed to “determine strategies for responsible stewardship” of the Stockpile.

c. Key differences between the Reserve and the Stockpile

Aside from their composition, the Reserve and the Stockpile differ from each other in two principal aspects. For one, the EO directs the Secretary of the Treasury and the Secretary of the Department of Commerce to develop strategies for the government’s acquisition of additional digital assets, so long as these acquisitions are “budget neutral and do not impose incremental costs on United States taxpayers.” But the EO expressly limits the acquisition of digital assets for the Stockpile, not the Reserve, to criminal or civil asset forfeiture proceedings or in satisfaction of any civil monetary penalty imposed by a government agency. The more flexible growth prospects for the Reserve suggest that the Trump Administration may develop more aggressive strategies to acquire bitcoin, whose total supply is presently capped at 21 million coins, of which more than 19.8 million are already in circulation.

Another difference lies in the uses of the Reserve and the Stockpile. Although bitcoin in the Reserve may not be sold, the Stockpile contains no such limitation. The EO states that the Stockpile will “serve as a secure account for orderly and strategic management of the United States’ other digital asset holdings,” implying, as further clarified in a White House fact sheet accompanying the EO, that the Stockpile is meant to further prudent and centralized administration of governmental resources for the ultimate benefit of taxpayers. The EO states further that the government’s digital assets may not be sold, except pursuant to: (i) an exercise of the Secretary of the Treasury’s authority over the Stockpile; (ii) a court order; or (iii) a determination by the Attorney General or other relevant agency head that digital assets (or their proceeds) should be returned to victims of crime, be used for law enforcement operations, be shared with state and local law enforcement partners, or satisfy certain federal forfeiture and related laws.

d. Consequences for law enforcement

A significant aspect of the March 6 EO is the mandate that digital assets forfeited through federal criminal or civil asset forfeiture proceedings be transferred to the Reserve (for bitcoin) or the Stockpile (for other cryptocurrencies). Currently, the holding by the government of forfeited assets, including cryptocurrencies, involves several statutes that dictate the circumstances and timing of directing forfeited funds to the Treasury (typically following payout to victims, among other things). Although these statutes do not expressly contemplate digital assets to be held in either a Reserve or a Stockpile, they do not foreclose this possibility either. Generally, forfeited assets are kept in custody or their proceeds – that is, funds – are distributed to victims of crime, state and local law enforcement partners, or remitted to the taxpayer through the Treasury.

Thus, the EO’s directive that the Secretary of the Treasury keep forfeited digital assets in “custodial accounts” may require in some circumstances additional action by the Attorney General or other agency heads holding crypto to ensure that the appropriate procedures are followed to ultimately custody digital assets with the Treasury – and permit the Treasury to sell digital assets in the Stockpile. Moreover, the EO’s statement that digital assets “owned” by the Treasury are to capitalize the Stockpile could complicate the analysis under federal forfeiture provisions, which may only contemplate “custody” by the Treasury of forfeited assets, not ownership.

e. Potential long-term implications for the Federal Reserve and crypto markets

Absent in both the March 6 EO and the digital asset working group formed by the January 23 EO is the Federal Reserve System. Although Federal Reserve banknotes (and funds) are obligations backed by the full faith and credit of the United States, digital assets, such as bitcoin, are not. Under the Federal Reserve Act, the Federal Reserve Banks act as fiscal agents and depositories of the United States when required to do so by the Secretary of the Treasury. But the Federal Reserve Banks are not involved in the custody of assets in the Reserve or Stockpile, and the Trump Administration has opposed any central bank digital currency, as well.

The Reserve is to “meet government objectives,” but the March 6 EO does not contemplate any specific use for bitcoin in the Reserve. The EO offers little insight into either the Reserve’s or the Stockpile’s potential uses, rather requiring the Treasury Secretary to report within 60 days, or by May 5, 2025, on “legal and investment considerations” concerning both the Reserve and the Stockpile. Interestingly, the EO’s comparison of bitcoin to “digital gold” – or the very name of the “Reserve” – could be suggestive that the US could one day seek to use the Reserve in a way that could complicate the current role of the Federal Reserve or any dollar-backed stablecoins. It is perhaps with this complexity in mind that the March 6 EO leaves much of the Reserve’s operations unsettled.

Notably, under the EO, bitcoin in the Reserve may not be sold but may be acquired, so long as the acquisitions are “budget neutral.” Unlike the Reserve, the Stockpile’s assets may only be acquired from forfeiture proceedings or in satisfaction of any civil monetary penalties, but assets in the Stockpile may be sold. In either case, transactions in digital assets by the federal government could influence the market.
 

III. Conclusion

 While not even through the first quarter, 2025 has already witnessed significant changes for digital asset businesses, including those operating offshore and now poised to enter the US. Rescinding pre-approval for national banks and federal savings associations engaging in digital asset activities, together with a wave of broader regulatory and enforcement shifts, demonstrates that the regulatory tides are turning. Both the White House – through creation of the Reserve and Stockpile – and Congress – through stablecoin legislation – have also signaled their commitment to advance a new agenda for digital assets.

For more information, please contact the authors.