Crypto Brief – Fin Tech

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.

Circle Files for IPO, Seeks Listing on NYSE

On May 27, Circle Internet Group Inc., the issuer of the USDC
stablecoin, announced its plan to go public via an initial public
offering (IPO) on the New York Stock Exchange (NYSE). According to
Circle’s Form S-1, Circle will offer 24 million Class A shares,
including 9.6 million shares being offered by Circle and 14.4
million shares being offered by existing shareholders. Circle’s
IPO marks a significant milestone in crypto’s growing
integration with traditional finance, as Congress simultaneously
considers stablecoin legislation in both the House and Senate.
See Circle’s Form S-1 here.

House Introduces Anti-Corruption Cryptocurrency
Bill

On May 22, Rep. Maxine Waters (D-CA), ranking member of the
House Financial Services Committee, introduced H.R. 3573, a bill
aimed at preventing political figures from personally profiting
from cryptocurrency ventures. The legislation would prohibit the
president, vice president, members of Congress, senior federal
officials, and each of their immediate families from issuing,
promoting, or receiving financial benefit from cryptocurrencies.
Penalties for violations could include fines up to $1 million. H.R.
3573 was introduced hours before President Trump’s private
dinner for top holders of his $TRUMP meme coin. While unlikely to
advance in the House, H.R. 3573 underscores growing concern over
the intersection of digital assets and political influence.
H.R. 3573 can be found here.

Department of Labor To Remove Guidance Relating to
401(k) Plan Investments in Crypto

On May 28, the U.S. Department of Labor revoked Compliance
Assistance Release No. 2022-01, initially issued on March 10, 2022
(the 2022 Guidance), under Compliance Assistance Release No.
2025-01. The 2022 Guidance directed 401(k) plan fiduciaries to take
“extreme care” before including cryptocurrencies as an
option in a 401(k) plan’s investment portfolio. The Department
of Labor’s rescission of the 2022 Guidance suggests a reversion
to its prior, more neutral approach, and it now neither endorses
nor disapproves the inclusion of cryptocurrencies in an investment
plan. See the Release No. 2025-01 here.

SEC Announces Agenda and Panelists for “DeFi and
the American Spirit” Roundtable on June 9

On May 28, the SEC Crypto Task Force announced the agenda and
panelists for the June 9 DeFi roundtable. In anticipation of the
event, head of the Crypto Task Force and SEC Commissioner Hester
Peirce emphasized the capabilities DeFi has in allowing people to
interact without intermediaries. The announced panelists are Jill
Gunter from Espresso Systems, Omid Malekan from Columbia Business
School, and Kevin Werbach from the Wharton School. Those interested
can attend online or in person. More information on the
SEC’s upcoming crypto roundtable can be found here.

Crypto Exchanger Sentenced to Six Years in
Prison

On May 22, a federal court in Boston sentenced Trung Nguyen, aka
DCS420, to six years in prison for operating an unlicensed money
transmitting business that purportedly converted more than $1
million in cash to Bitcoin for individuals, including scammers and
at least one drug dealer. Between September 2017 and October 2020,
despite being required to register with the Financial Crimes
Enforcement Network as a money transmitter and to maintain an
effective anti-money-laundering program, Nguyen freely, “no
questions asked” accepted cash from customers and sent bitcoin
in return. In order to evade regulations, Nguyen concealed his
illicit activities by framing his business as a vending machine
business. See here for the related press release.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.