The Justice Department announced that crypto company CLS Global FZC LLC has been sentenced on criminal charges over running a fraudulent wash trading scheme and ordered to pay $428,000 to the US government, representing both a fine and seized crypto. The court also sentenced CLS Global to a term of probation for three years, during which the company is prohibited from participating in US crypto markets. CLS Global pleaded guilty to one count of conspiracy to commit market manipulation and wire fraud and one count of wire fraud in January.

House Financial Services Committee Ranking Member Maxine Waters (D-CA) and Reps. Emanuel Cleaver (D-MO) and Stephen Lynch (D-MA) wrote a letter to Housing and Urban Development (HUD) Secretary Scott Turner, voicing concern with reports that HUD is planning to implement blockchain and crypto within the agency’s operations. The lawmakers state that "Crypto markets are highly volatile, prone to fraud, and vulnerable to sudden collapses," arguing that "The federal government cannot allow under-regulated financial products to infiltrate critical housing programs."

Senate Banking Committee Ranking Member Elizabeth Warren (D-MA) wrote a letter to SEC Inspector General Deborah Jeffrey, calling for an investigation into whether Trump Administration officials may have improperly influenced SEC enforcement and regulatory decisions on crypto. Warren noted that the SEC has dropped almost all of its ongoing lawsuits against crypto companies, while taking steps to proactively alert crypto companies that they will not be expected to comply with the agency's rules. She expressed concern that "President Trump, his closest advisors, and his family members all stand to benefit from boosts in the crypto industry."

The SEC and Gemini jointly filed a motion requesting a 60-day pause in their legal battle over the exchange’s crypto lending program. The motion asks a Manhattan federal court to suspend all deadlines in the SEC's January 2023 lawsuit. The suit alleged that Gemini failed to register its Gemini Earn program before offering it to retail investors. A New York federal judge subsequently paused the suit.

The Treasury Department’s Office of Foreign Assets Control (OFAC) sanctioned eight digital asset wallet addresses used by Houthis to transfer funds associated with their activities. Data from Chainalysis and TRM Labs linked the wallets to Russian crypto exchange Garantex and the Houthis. Two are deposit addresses at major crypto platforms, while the other six are privately controlled. The addresses reportedly moved nearly $1 billion worth of funds linked to sanctioned entities.

House Financial Services Committee Republicans sent letters to multiple agencies requesting the rescission, modification, or re-proposal of certain Biden Administration actions. On digital assets, the lawmakers wrote to Acting FDIC Chair Travis Hill and Acting CFPB Director Russ Vought, urging them to withdraw “several regulatory actions that have stifled innovation, restricting financial institutions’ engagement in digital assets and hindering the growth of fintech companies.” The lawmakers also sent letters to the Federal Reserve and OCC.

The House Financial Services Committee held a subcommittee hearing on tools and techniques to combat fraud. Ranking Member Maxine Waters (D-CA) and Reps. Roger Williams (R-TX) and Sean Casten (D-IL) asked about the role of crypto in fraud and money laundering, while Reps. Young Kim (R-CA) and Zach Nunn (R-IA) highlighted the transparent nature of the blockchain as a means of combating illicit activity. The National Security, Illicit Finance, and International Financial Institutions Subcommittee received testimony from witnesses representing Chainalysis, Flagstar Bank, NFIB, and AARP.

The SEC has reportedly closed an investigation into Haliey Welch, the celebrity promoter of the Hawk Tuah meme coin. The $HAWK meme coin's market value surged upon Welch's announcement of it in December 2024, but then took a steep dive in the subsequent hours. A group of buyers later brought a proposed securities class action over their losses. According to Welch's attorney, James Sallah, the SEC is no longer scrutinizing Welch's involvement with the project.

The Supreme Court has asked the federal government to weigh in on crypto investor James Harper’s petition to reverse a lower court ruling that found the IRS was allowed to seize his records from Coinbase without a warrant. The justices gave the government 30 days to respond. The request came after the government waived its right to respond to the petition, and following support for Harper in amicus briefs from more than a dozen sources, including Elon Musk's X Corp., fives states, and technology and privacy advocacy groups.