Executive Order Establishes Strategic Bitcoin Reserve, Digital Asset Stockpile
By Robert A. Musiala Jr.
On March 6, President Trump issued an executive order (EO), Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, which states that it is the policy of the United States to establish a “Strategic Bitcoin Reserve” and “Digital Asset Stockpile.” Key highlights of the EO include the following:
- Forfeited BTC and Digital Assets. The Secretary of the Treasury (Treasury) shall establish an office to administer and maintain control of custodial accounts for a Strategic Bitcoin Reserve and Digital Asset Stockpile consisting, respectively, of all BTC and other digital assets forfeited as part of criminal or civil asset forfeiture proceedings or in satisfaction of civil monetary penalties.
- Reserve Assets. With limited exceptions, government BTC and digital assets deposited into the Strategic Bitcoin Reserve and Digital Asset Stockpile shall not be sold and shall be maintained as reserve assets of the United States.
- Strategies for Acquiring BTC. Treasury and the Secretary of Commerce shall develop budget-neutral strategies for acquiring additional BTC, but shall not do so without further executive or legislative action.
- Legal and Investment Considerations. Within 60 days, Treasury shall deliver an evaluation of legal and investment considerations related to establishing and managing the Strategic Bitcoin Reserve and Digital Asset Stockpile.
- Agency Accounting. Within 30 days, the head of each agency shall provide a full accounting of all government BTC and digital assets in their possession, including information to facilitate transfers to the Strategic Bitcoin Reserve and Digital Asset Stockpile.
According to recent reports, Treasury currently controls an estimated 198,109 BTC, worth approximately $17.7 billion, that was seized or forfeited through criminal proceedings.
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Digital Asset Companies Launch New Products in Payments, Staking, Custody
By Keith R. Murphy
According to a recent news release, the software company that developed the protocol for the world’s largest decentralized exchange (DEX) now allows crypto-to-fiat conversions through the company’s wallet in more than 180 countries. Users reportedly can now seamlessly move between cryptocurrency and cash, selling supported tokens and depositing funds directly into their bank accounts through various financial technology apps.
According to a recent report, a major U.S. cryptocurrency exchange has relaunched its staking services in the U.S. The company’s CEO reportedly said, “[s]taking is a vital part of blockchain governance and economy. Users should absolutely be able to support this activity and earn from that support. And with the new blockchain-forward environment in the U.S., we’re delighted to offer staking services to our U.S. customers once again.”
In a final development, Sygnum, a global digital asset banking group, recently announced the expansion of its off-exchange custody platform to include Deribit, reportedly the world’s largest cryptocurrency derivatives exchange. According to the press release, the integration allows traders to hold digital assets in Sygnum’s custody service with institutional-grade security while being able to access liquidity on the Deribit exchange.
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Ethereum Foundation Announces Leaders; Crypto Analytics and Lending Expand
By Robert A. Musiala Jr.
The Ethereum Foundation recently announced, “a new leadership structure, welcoming Hsiao-Wei Wang and Tomasz Stańczak as co-Executive Directors effective March 17th.” According to a blog post by the foundation, Hsiao-Wei Wang has “served as a core researcher at the Ethereum Foundation for seven years”; and Tomasz Stańczak “has led the team building an execution client, Nethermind, that has grown to become one of the largest in the Ethereum ecosystem.”
In other network news, blockchain analytics company Elliptic recently announced a “strategic collaboration” with the DFINITY Foundation “to establish new benchmarks for security and compliance across the Internet Computer Protocol (ICP) ecosystem.” And in a similar development, blockchain analytics company Chainalysis announced that its tools now support investigations and analysis of tokens on Unichain, a recently launched Ethereum layer 2 network.
In a final notable item, a major U.S. cryptocurrency exchange recently published an analysis of the crypto borrowing and lending landscape. Among other things, the report finds that onchain lending usage reached all-time high levels in December 2024 and most onchain lending markets have variable interest rates based on liquidity utilization thresholds. The report predicts that “programmatic borrowing and lending protocols will continue to gain adoption, particularly with new layers of innovation such as rate trading and managed vaults.”
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SEC Drops More Crypto Cases, Commissioners Publish Related Statements
By Robert A. Musiala Jr.
According to company blog posts and related reports, the U.S. Securities and Exchange Commission (SEC) has agreed to dismiss several more high-profile lawsuits and investigations into U.S. crypto companies. According to a blog post by a major U.S. crypto exchange, “The SEC staff has agreed in principle to dismiss its lawsuit against [the exchange] with prejudice, with no admission of wrongdoing, no penalties paid and no changes to our business.” Additionally, recent reports note that the SEC has ended its investigation into nonfungible token company Yuga Labs and has agreed to dismiss its lawsuit against a major U.S. crypto trading company.
SEC Commissioner Hester M. Peirce recently published a statement addressing the SEC’s dismissal of its lawsuit against major U.S. crypto exchange Coinbase. Among other things, Commissioner Peirce’s statement criticizes the SEC’s previous “regulation-by-enforcement strategy” and notes that with the formation of the new Crypto Task Force, “it is the policy staff who will take the lead in engaging with the public to build a regulatory framework that serves the American public.”
On the same day, SEC Commissioner Caroline A. Crenshaw published two statements addressing recent SEC actions. The first statement criticizes the SEC’s dismissal of its lawsuit against Coinbase. According to Commissioner Crenshaw’s statement, the SEC’s action dismissing the Coinbase case “ignores 80 years of well-established law” and “creates more uncertainty” instead of clarity. In a second statement, Commissioner Crenshaw criticized the SEC’s recent guidance on meme coins. According to Commissioner Crenshaw’s statement, the guidance “raises more questions than it answers about what a meme coin is and whether that is a definable or useful categorization for purposes of the existing securities laws.”
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Senate Votes to Overturn DeFi Broker Rule, Bill Now Moves to House
By Robert A. Musiala Jr.
The U.S. Senate recently voted 70-27 to pass a joint resolution that would immediately overturn a final rule, issued by the U.S. Department of the Treasury during the final weeks of the Biden administration, that would require decentralized finance (DeFi) market actors to report to the Internal Revenue Service as brokers. The bill will now move to the U.S. House of Representatives for consideration. The House is expected to vote on the resolution this week. David Sacks, the White House’s new AI and crypto czar, reportedly said the White House would support efforts to rescind the rule.
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Crypto Public Keys Added to OFAC List, USDT Frozen on Russian Exchange
By John Robertson
On March 4, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) announced sanctions against an Iran-based darknet marketplace, adding the entity to OFAC’s Specially Designated Nationals (SDN) List. According to a press release, the sanctioned parties have facilitated the sale of nearly $30 million worth of drugs worldwide. As part of the action, OFAC added 49 cryptocurrency addresses associated with the sanctioned entity to the SDN List.
In other news, reports indicate Tether has frozen $27 million in USDT on Garantex, a sanctioned Russian cryptocurrency exchange. In a statement, the exchange announced it was temporarily suspending all services, including withdrawals, while the issue was addressed. According to reports, Tether’s actions may be related to the European Union’s sanctioning of the Garantex exchange on February 26. However, Tether has yet to confirm the freeze.
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