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;dr

• The Securities and Exchange Commission (SEC) filed a joint stipulation with Coinbase to dismiss the ongoing civil enforcement action against the firm.  The SEC had alleged that Coinbase failed to register as a securities exchange, broker, and clearing agency, and that it had offered and sold unregistered securities through its Staking Program.  Commissioner Hester M. Peirce released a statement in connection with the SEC’s dismissal of the case.  Commissioner Caroline A. Crenshaw also released a statement disagreeing with the dismissal.
• Robinhood Crypto, OpenSea, Uniswap Labs, and Gemini Trust Company announced that the SEC had dropped pending investigations against them. 
• The Court of Appeals for the Second Circuit issued a ruling largely affirming a district court’s 2023 decision to dismiss a class action lawsuit against Uniswap Labs and others, which had alleged that the defendants were liable under federal securities law for the sale of certain tokens on the Uniswap protocol.

? Congress

• The House Ways and Means Committee voted 26-16 to advance to the overall House a Congressional Review Act resolution that would overturn the Internal Revenue Service’s decentralized finance broker reporting rule.
• Senators Cynthia Lummis (R-Wyo.), Kirsten Gillibrand (D-N.Y.), and others sent a bipartisan letter to the SEC requesting clarification of the agency’s position regarding protocol staking in digital asset exchange-traded products.
• House Representatives Dan Meuser (R-Penn.), French Hill (R-Ark.), and others sent a letter to Federal Deposit Insurance Corporation (FDIC) Acting Chair Travis Hill with a list of recommendations relating to the FDIC’s regulatory and supervisory work on the digital asset activities of regulated financial institutions.

⚖️ Department of Justice

• Cryptocurrency exchange OKX agreed to pay monetary penalties totaling more than $504 million after pleading guilty to one count of operating an unlicensed money transmitting business.
• A federal judge sentenced the founder of CluCoin, a cryptocurrency token project, to 27 months in prison and ordered him to pay restitution and forfeit assets valued at $1.14 million for a scheme in which he raised capital through an initial coin offering and then lost the investor funds to gambling.  
• The Department of Justice (DOJ) charged a Las Vegas business owner for allegedly defrauding at least 400 investors of approximately $24 million through a Ponzi scheme in which he misrepresented that his artificial intelligence company mined cryptocurrency, verified cryptocurrency transactions, paid fixed rates of return on investments, and provided a 100% money-back guarantee.
• The Federal Bureau of Investigation released a public service announcement, reporting that the Democratic People’s Republic of Korea (North Korea) was responsible for the theft of approximately $1.5 billion in virtual assets from cryptocurrency exchange Bybit.
• A Montana man was found guilty of a cryptocurrency money laundering conspiracy in which he converted funds from romance scams, business email compromises, real estate scams, and other fraudulent schemes into cryptocurrency and sent the cryptocurrency to accounts controlled by foreign and domestic co-conspirators.
• The DOJ announced the seizure of about $31 million in crypto tied to the 2021 hack of Uranium Finance.

? Federal Reserve

• Federal Reserve Board Governor Michael S. Barr said that “blockchain technology underlying crypto-assets has the potential to make financial services better, cheaper, and faster,” but that attributes of crypto-assets make them “attractive for use in money laundering and terrorist financing.”

? Securities and Exchange Commission

• As mentioned in “tl;dr,” the SEC filed a joint stipulation with Coinbase to dismiss the ongoing civil enforcement action against the firm. The SEC had alleged that Coinbase failed to register as a securities exchange, broker, and clearing agency, and that it had offered and sold unregistered securities through its Staking Program. Commissioner Hester M. Peirce released a statement in connection with the SEC’s dismissal of the case. Commissioner Caroline A. Crenshaw also released a statement disagreeing with the dismissal.
• As mentioned in “tl;dr,” Robinhood Crypto, OpenSea, Uniswap Labs, and Gemini Trust Company announced that the SEC had dropped pending investigations against them. 
• The SEC voluntarily dismissed its appeal of a district judge’s ruling that the agency had exceeded its statutory authority in adopting a rule that expanded the definition of “dealer” under the Securities Exchange Act of 1934 in a manner that could have potentially included traders and other participants in decentralized finance protocols.
• The SEC’s Division of Corporation Finance staff released a statement providing its views on memecoins, including that memecoins “are akin to collectibles” and “typically have limited or no use or functionality,” and that transactions in the particular types of memecoins described in the statement do not involve the offer and sale of securities under the federal securities laws. Commissioner Caroline A. Crenshaw issued a response to the staff statement.
• MetaMask developer Consensys announced that the SEC had agreed in principle to dismiss its securities enforcement case against the firm.
• Commissioner Hester M. Peirce invited the public to provide the SEC’s Crypto Task Force with input on a series of crypto regulatory questions relating to the security status of crypto assets and transactions in such assets, token offerings, trading, custody, lending, a potential safe harbor from registration, and other issues.
• Commissioner Hester M. Peirce discussed regulatory clarity for tokens, no-action letters, airdrops, the SEC’s relationship with the CFTC, and other topics on the Bankless podcast.
• The SEC announced that the newly created Cyber and Emerging Technologies Unit would replace the Crypto Assets and Cyber Unit and focus on combatting cyber-related misconduct and protecting retail investors from bad actors in the emerging technologies space.

? International

?? Norway

• Norway’s National Authority for Investigation and Prosecution of Economic and Environmental Crime charged four men with allegedly defrauding thousands of investors through a crypto investment scheme.

?? European Union

• Trading and investing platform eToro announced that the Cyprus Securities Exchange Commission had granted eToro (Europe), its EU subsidiary, a Markets in Crypto-Assets Regulation license. 
• The European Central Bank announced that it is expanding its initiative to settle transactions recorded on distributed ledger technology (DLT) in central bank money.

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