Editor’s note: Our Regulatory Updates series highlights the latest regulatory, legal, and policy happenings relevant to builders in web3 and crypto, as tracked and curated by the a16z crypto regulatory team. The roundups are based on recent news, guidance, legislation, and frameworks released by regulators, industry consortia, professional associations, banks, governments, and other entities as they impact the crypto industry (or applications) around the world. We also occasionally include select resources such as talks, posts, or other commentary — from us or from others — with the updates.? tl;drA federal judge sentenced global crypto exchange BitMEX to a two-year probationary period and fined it $100 million for violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering and know-your-customer program.The Department of the Treasury and the Internal Revenue Service (IRS) issued a second final rule on digital asset broker reporting requirements, which includes within the term “broker” certain non-custodial software providers in decentralized finance (DeFi) that the IRS defines as “trading front-end service providers.”The U.S. Court of Appeals for the Third Circuit ordered the Securities and Exchange Commission (SEC) to provide “a more complete explanation” of why it denied Coinbase’s request for rulemaking on how securities laws apply to digital assets, given that the SEC’s initial explanation was “conclusory and insufficiently reasoned, and thus arbitrary and capricious.”? CongressSenator Cynthia M. Lummis (R-Wyo.) wrote to Federal Deposit Insurance Corporation (FDIC) Chair Marty Gruenberg demanding that his staff “cease and desist destruction of all materials” relating to the digital asset activities of the agency. ? Commodity Futures Trading CommissionGemini Trust Company agreed to pay $5 million to settle a case with the Commodity Futures Trading Commission (CFTC) relating to charges that it made materially false or misleading statements in connection with its bitcoin futures contract in 2017.In CFTC Chair Rostin Behnam’s final public remarks as chair of the agency, he said that “addressing the gap in regulation of the cash markets for crypto” had “dominated every season” of his tenure, and that he would continue to advocate for the CFTC to fill that gap.A federal court ordered a crypto exchange and its CEO to pay more than $1.1 million for running a fraudulent digital asset commodity scheme. ⚖️ Department of JusticeAs mentioned in “tl;dr,” a federal judge sentenced global crypto exchange BitMEX to a two-year probationary period and fined it $100 million for violating the Bank Secrecy Act by willfully failing to establish, implement, and maintain an adequate anti-money laundering and know-your-customer program.A federal judge sentenced a Chinese business manager to 10 years in prison for her role in assisting a convicted billionaire’s fraud scheme, which involved introducing purported cryptocurrencies called the Himalaya coin and the Himalaya dollar through a fraudulent crypto exchange called the Himalaya Exchange.In the largest non-fungible token scheme prosecution to date, the Department of Justice (DOJ) charged two California men with defrauding investors of more than $22 million in cryptocurrency through a series of “rug pulls,” a fraud scheme in which the creator of a digital asset project solicits funds from investors for the project and then abruptly abandons the project and fraudulently retains investors’ funds.The DOJ charged three Russian nationals with conspiracy to commit money laundering and operating an unlicensed money transmitting business in connection with their operation of cryptocurrency mixing services Blender.io and Sinbad.io.An Oklahoma man pleaded guilty for his role in a cryptocurrency investment fraud conspiracy in which he defrauded approximately 2,800 investors of $9.4 million.?? Department of StateThe U.S. Department of State, Japan, and the Republic of Korea provided a new warning to the blockchain technology industry regarding the ongoing targeting and compromise of a range of entities across the globe by Democratic People’s Republic of Korea cyber actors.? Department of the TreasuryAs mentioned in “tl;dr,” the Department of the Treasury and the IRS issued a second final rule on digital asset broker reporting requirements, which includes within the term “broker” certain non-custodial software providers in DeFi that the IRS defines as “trading front-end service providers.”The IRS granted temporary relief on crypto cost-basis reporting rules, postponing a rule that would have required centralized crypto exchanges to use the First In, First Out (FIFO) accounting method on gains from the dispositions, sale, or exchange of tokens.? Federal Deposit Insurance CorporationFDIC Vice Chair Travis Hill said that “a reset is sorely needed” in regard to the FDIC’s approach to digital assets and tokenization, and he urged an end to “all Choke Point-like tactics.”? Securities and Exchange CommissionAs mentioned in “tl;dr,” the U.S. Court of Appeals for the Third Circuit ordered the SEC to provide “a more complete explanation” of why it denied Coinbase’s request for rulemaking on how securities laws apply to digital assets, given that the SEC’s initial explanation was “conclusory and insufficiently reasoned, and thus arbitrary and capricious.”Tai Mo Shan Limited, a wholly-owned subsidiary of Jump Crypto Holdings LLC, agreed to pay $123 million to the SEC to settle charges for misleading investors about the stability of Terra USD, a purported “algorithmic stablecoin” that Terraform Labs issued.Digital Currency Group (DCG) and the former CEO of DCG’s now-defunct subsidiary, Genesis Global Capital LLC, agreed to pay a combined $38.5 million in civil penalties to settle charges for misleading investors about Genesis’s financial condition.The SEC delayed its decision on the NYSE Arca’s proposal to list shares of the Bitwise 10 Crypto Index Fund as an exchange-traded product. In an interview with Yahoo Finance, SEC Chair Gary Gensler reiterated his belief that the crypto industry is non-compliant, and he said that the SEC had never called bitcoin or ethereum a security. ? State? New YorkThe New York Attorney General’s Office filed a lawsuit to recover $2.2 million worth of cryptocurrency held in digital wallets and stolen from New Yorkers and victims across the country in a scam in which scammers sent text messages offering fake online job opportunities to entice unsuspecting people to purchase and deposit stablecoins into those scammers’ digital wallets.? Washington The Washington Department of Revenue issued an Excise Tax Advisory on non-fungible tokens. ? International?? United KingdomHM Treasury published Financial Services and Markets Act 2000 (Collective Investment Schemes) (Amendment) Order 2025, which ensures that arrangements for “qualifying cryptoasset staking” do not amount to a “collective investment scheme” for purposes of the Financial Services and Markets Act 2000. However, qualifying crypto-asset staking could still be subject to other regulations.Global cryptocurrency trading firm and liquidity provider GSR announced that it received approval from the UK’s Financial Conduct Authority to operate as a registered crypto asset business.***The views expressed here are those of the individual AH Capital Management, L.L.C. (“a16z”) personnel quoted and are not the views of a16z or its affiliates. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by a16z. 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