For the first time in over six years, the SEC issued not one, but two No-Action Letters, granting relief to crypto market participants. We break down these and other developments in the latest TLDR Newsletter for the week of October 13, 2025.
Regulatory Updates
SEC Issues Two No-Action Letters
The SEC has rarely provided No-Action Relief favorable to the crypto industry. The Division of Corporation Finance last issued such letters in 2019 for TurnKey Jet and Pocketful of Quarters. Now, in October 2025, two new No-Action Letters mark the first meaningful developments in years and are both worth a closer look.
DoubleZero / 2Z Token
The SEC’s Division of Corporation Finance issued a no-action letter to DoubleZero relating to the distribution of its 2Z token, a DePIN (decentralized physical infrastructure network) token. | Read More
State-Trust Company Custody for Crypto Assets
The SEC’s Division of Investment Management issued a no-action position indicating that, based on the facts presented, the staff would not recommend enforcement against registered investment advisers or regulated funds for placing and maintaining crypto assets (and related cash equivalents) with certain state-chartered trust companies (i.e. state trust companies), under the Advisers Act / Investment Company Act custody rules. | Read More
Litigation Updates
Judge Dismisses Lawsuit Against Yuga Labs, Ruling BAYC NFTs Not Securities
On September 30, 2025, a federal judge dismissed a claim against Yuga Labs, ruling the plaintiffs had not adequately alleged that Bored Ape Yacht Club NFTs and ApeCoin meet the Howey Test criteria for securities. The plaintiffs have filed an amended complaint in an attempt to reassert their securities claim. The details of this decision and its implications are detailed in our article here.
Delaware Chancery Dismisses Novel $3.7M Crypto Case for Lack of Personal Jurisdiction
On October 6, 2025, the Delaware Court of Chancery in Timoria LLC v. Anis denied the plaintiff’s in rem jurisdiction argument over stolen Ethereum. Employees of a Curaçao entity allegedly stole the ETH and transferred it to a Delaware subsidiary. The Court of Chancery ruled the subsidiary’s residency was not sufficient to establish the court’s jurisdiction over the matter. In future, Vice Chancellor Laster suggested either state legislation or the terms of use of digital assets could potentially provide provisions specifying venues for disputes. Although new legislation like the GENIUS Act is attempting to clarify crypto regulations, this case highlights that many questions remain, particularly around determining the jurisdiction for assets that can be easily transferred.
Coinbase Wins Partial Dismissal of Investor Class Claims
A federal judge in New York has narrowed the scope of a shareholder lawsuit against Coinbase. On September 30, 2025, District Judge Brian Martinotti rejected Coinbase’s request for a full dismissal of claims, allowing some claims to move forward. The plaintiffs adequately alleged the company misled investors about the regulatory status of cryptocurrencies and risks of losing assets in bankruptcy. However, Judge Martinotti dismissed claims about Coinbase’s proprietary trading statements, finding they qualified as forward-looking predictions or otherwise lacked proof of falsity. The court has granted the plaintiffs a chance to preserve the additional claims by submitting a revised complaint.
CFTC Secures $5.5M Restitution in Tennessee Commodity Pool Fraud Case
On September 25, 2025, the Commodity Futures Trading Commission (CFTC) announced that it had obtained a federal court order requiring a Tennessee couple to pay over $5.5 million in restitution to victims of a fraudulent commodity pool scheme. The couple misappropriated investor funds and made false statements about trading profits and account balances. The enforcement action is part of the CFTC’s broader crackdown on retail fraud and unregistered commodity pool operators.
Binance Nears DOJ Deal to Drop Independent Compliance MonitorBinance is in advanced discussions with the U.S. Department of Justice to eliminate the three-year independent compliance monitorship imposed in 2023 as part of its $4.3 billion settlement for money laundering and sanctions violations. The DOJ has not reached a final decision, but sources suggest Binance will likely need to implement enhanced compliance reporting standards to qualify for the elimination. The potential deal aligns with trends in policymaking by the current administration but has drawn criticism from lawmakers like Senator Elizabeth Warren.
Voyager Judge Denies Dismissal of Contract Claims Against Binance US
A New York bankruptcy judge indicated he expects to deny a request to dismiss Voyager Digital’s breach of contract claims against Binance US. The claims stem from a failed $1 billion asset purchase agreement during Voyager’s 2022 collapse. The ruling would allow Voyager to pursue damages for alleged wrongful termination, adding to the ongoing fallout from crypto bankruptcies and failed deals.
Crypto Startup Sues Mercury Funds Over $270M Token DisputeBlockchain firm Plasma filed suit against Houston-based venture capital firm Mercury Fund, claiming they exploited a contract typo to demand $270 million in tokens originating from a $100,000 investment made via SAFE and Token Warrant. Plasma states they only intended to offer tokens for purchase in proportion to equity acquired in the contemporaneously-executed SAFEs, but the token warrants were mistakenly worded to include equity from prior investment rounds in the calculation. Plasma claims the token warrants were duly amended pursuant to their modification provisions, but Mercury Fund has nonetheless sought to exercise its token warrant in accordance with the pre-modification language.
Legislative Updates
Senate Finance Committee Holds Crypto Tax Hearing
On Oct. 1, the Senate Finance Committee held a hearing titled “Examining the Taxation of Digital Assets.” During the hearing, Senators focused on the need to update the tax code to address the tax treatment of digital assets.
Democratic DeFi Proposal Stalls Crypto Market Structure Talks
Pro-crypto Senate Republicans have been rushing to pass a market-structure bill before the end of this year. Bipartisan negotiations on Senate market-structure legislation have been put on hold after Democratic staff circulated a new decentralized finance proposal titled “Preventing Illicit Finance and Regulatory Arbitrage Through DeFi Platforms.” The draft would classify individuals who design, deploy, operate, or profit from a DeFi front-end as “digital asset intermediaries,” potentially subjecting them to SEC or CFTC oversight. It would also authorize the Treasury Department to determine whether a protocol is sufficiently decentralized. Industry leaders have warned that the measure could effectively prohibit DeFi, wallet development, and other decentralized applications in the United States.
Recent Insights
Our team continues to monitor rapidly evolving developments in financial regulation, enforcement, and digital assets. Stay informed with deeper insights from our team on the latest legal developments in the digital asset industry.