Skip to content

It looks like we may have content for your preferred language. Would you like to view this page in English?

Trends in Crypto Policy and Compliance

In this Q&A, senior counsel Melissa Hall explores the evolving regulatory landscape of cryptocurrency and its intersection with traditional finance. The discussion offers valuable insight into how the industry has shifted from resisting oversight to actively shaping it, what recent policy changes might mean for crypto exchanges and financial institutions, and where regulation may be headed next.

Tell us about your practice and the types of financial matters you generally handle.

I advise traditional banks, fintechs and crypto companies on complex financial regulatory matters, drawing on over 20 years of experience, including as general counsel of one of the first deposit-taking banks focused on cryptocurrency. My practice spans federal and state banking laws, compliance, licensing, enforcement and the development of new financial products. I focus on helping clients navigate the intersection of innovation and regulation, with practical guidance grounded in both legal and business realities.

How would you describe the current regulatory environment for crypto, and how has it evolved over the past five years?

Over the past five years, the regulatory environment for cryptocurrency has seen significant change. Philosophically, many in crypto were strongly anti-regulation or at the very least advocating for minimal interference from federal and state regulators. As cryptocurrency became more popular, a number of large cryptocurrency exchanges began embracing regulatory frameworks and collaborating on policy efforts. Friction remained, however, as the industry claimed that it was subject to “regulation by enforcement” and a lack of clarity on regulatory expectations. The collaborative momentum slowed in 2022 due to the “crypto winter” and the notorious collapse of FTX.

During the 2024 campaign, President Donald Trump became a vocal supporter of the cryptocurrency industry, and the cryptocurrency industry invested heavily in lobbying and political contributions to pro-crypto candidates. Today, the industry is again actively collaborating with lawmakers and regulatory agencies on developing regulatory frameworks.

New crypto-related laws are beginning to pass, thanks in large part to sustained engagement and advocacy by the industry.

Given the recent withdrawal of guidance around crypto-related banking activities, what does this suggest about the direction regulators are taking, and what other developments might be on the horizon?

First, it’s important to note that in the context of financial regulation, “guidance” is not a binding regulation, but it does indicate how the particular agency and its examiners are likely to view certain activities. It shows the direction the regulatory winds are blowing.

For nonbanks, there’s a growing push toward centralized oversight, possibly under the Commodity Futures Trading Commission, though this is happening incrementally. The future of a U.S. central bank digital currency remains uncertain. Stablecoins—cryptocurrencies that are pegged to the U.S. dollar or other fiat currency—are increasingly embraced.

In the banking sphere, it is notable that several crypto exchanges have recently submitted applications to the Office of the Comptroller of the Currency to charter crypto-centered banks. This is a marked reversal from two to three years ago when the regulators deemed crypto activities high risk and approached them with a high degree of skepticism. Two state-chartered crypto banks, for example, were denied access to the Federal Reserve’s payment systems over concerns about the threats of cryptocurrency to the financial system, even though the system does not transmit cryptocurrency.

Taking a step back, the regulation of cryptocurrency is beginning to mirror traditional financial regulations. The space is evolving into something more standardized and legitimate. More and more public companies are entering the industry, and there’s a strong push for regulatory compliance.

Even with a crypto-supportive administration, regulatory progress has been narrowly focused and incremental.

For example, the GENIUS Act, while a step forward, addresses only a narrow aspect of crypto regulation—stablecoins. We still lack fundamental building blocks, such as centralized regulation of crypto exchanges and an agreed-upon framework of when cryptocurrencies are securities. The process is slow for a number of reasons: There is a lack of understanding of cryptocurrency and how it functions; it is difficult to write legislation for a technology that is constantly developing; and Congress is pretty deadlocked.

How is the crypto industry adapting to this changing environment, and what kinds of engagement are we seeing between the industry and policymakers?

The crypto industry continues to be deeply involved in the regulatory and legislative process. As I mentioned, there has been massive engagement with policymakers, regulators and administration officials. Industry leaders—including executives from major exchanges—have met regularly with lawmakers. The difference today from a year ago is that more lawmakers are receptive to working with the industry, and the regulatory agencies are clearly more cryptocurrency positive.

Given the complexity of digital assets, the industry recognized early on that it needed to lead education efforts. The average person often can’t explain how crypto works in detail, which makes it difficult to write effective legislation without industry expertise. As a result, trade associations representing crypto companies have been active participants in policy conversations.

Today, there are at least two major public exchanges and trade associations pushing for regulation that allows the industry to function sustainably. The prevailing attitude is that it’s better to have someone familiar with crypto at the table than to let those who don’t understand the space define its future.

Simply, this is how lobbying works: engagement, education and persistent advocacy.

How is Loeb helping clients navigate this space and stay ahead of emerging developments?

Loeb helps clients navigate the intersection of crypto and traditional finance by providing guidance on how digital assets function within existing legal and regulatory frameworks. As interest grows in using crypto, we advise banks and other stakeholders on practical, compliant approaches.

We help clients interpret emerging state laws, including those adopting UCC Article 12, which establishes a framework for security interests in digital assets. Our goal is to demystify crypto and show how it aligns with familiar financial principles—not a lawless frontier, but an evolving part of mainstream finance. With ongoing regulatory uncertainty, particularly at the federal level, legal questions around ownership, jurisdiction and asset classification remain. Loeb’s deep experience in both traditional finance and digital assets allows us to guide clients through these complexities with confidence.

Ultimately, crypto is not as intimidating as it may seem. It fits within the broader framework of traditional financial regulation, but it raises new and interesting challenges. As long as the industry stays involved in the process, there’s a path forward.