The cryptocurrency bill being negotiated by House Financial Services Committee Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC) is facing bipartisan resistance, thus making it unlikely that a vote will be held on the bill this week despite Waters indicating that she hoped to make progress on the bill this week. Members including Rep. Warren Davidson (R-OH) have voiced concerns about the draft text released last week, and he said he is “hopeful that the Financial Services Committee can resolve differences and settle on good legislation in either Q4 2022 or Q1 2023.”

On September 26 regulators in New York, California, Kentucky, Maryland, Oklahoma, South Carolina, Washington, and Vermont sued cryptocurrency lending company Nexo for illegally offering unregistered securities to investors. The group alleges that Nexo’s Earn Interest Product, which provided investors a chance to receive annual interest rates of up to 36 percent on crypto asset deposits, constitutes an investment contract that the company was not properly registered to offer.

Sens. Chris Van Hollen (D-MD) and Elizabeth Warren (D-MA) and Reps. Ayanna Pressley (D-MA) and Jesús “Chuy” García (D-IL) have reintroduced a bill that would compel financial institutions to recognize funds in real time, paving the way for the Federal Reserve’s new faster payments service, FedNow.

U.S. Attorney Damian Williams, Deputy Assistant Attorney General David Hubbert, and IRS Commissioner Charles Rettig announced that a federal judge has authorized the IRS to issue a “John Doe summons,” a term used when the IRS investigates unknown taxpayers. It compels New York-based M.Y. Safra Bank to submit information about taxpayers that might have failed to report and pay taxes on their cryptocurrency transactions and is reportedly specifically looking at users of the crypto exchange SFOX.

The Department of the Treasury filed a Request for Comment to seek feedback from the American people on the illicit finance and national security risks posed by digital assets. The filing comes in response to President Biden’s Executive Order, “Ensuring Responsible Development of Digital Assets” and the Illicit Finance Action Plan released by Treasury last week. The RFC will be open for comment through November 3.

The SEC announced on September 19 that it has reached a $35 million settlement with cryptocurrency company Sparkster Ltd. and its CEO who is alleged to have conducted an unregistered securities offering. The settlement includes an agreement to destroy the remaining SPRK tokens, request the removal of the tokens from trading platforms, publish the SEC's order on its website and social media channels, and pay $30 million in disgorgement, more than $4.6 million in prejudgment interest, and a $500,000 civil penalty.

The White House released its first-ever comprehensive framework for responsible regulation of digital assets per the president’s executive order on digital assets. The framework outlines six key priorities: consumer and investor protection; promoting financial stability; countering illicit finance; U.S. leadership in the global financial system and economic competitiveness; financial inclusion; and responsible innovation. The reports call for the SEC and CFTC to go after crypto scams, fraud, and other illegal activity and outline the potential development of a CBDC. More reports will be released by Treasury as part of this framework, including one on financial stability risks due next month, one on DeFi due in February, and one on NFTs due in July.

The Department of Justice published a new report on cryptocurrency crime in which it recommended a variety of legal reforms and created a network, the Digital Asset Coordinator Network (DAC), comprised of experts to advise federal offices. This network was formed under the leadership of the National Cryptocurrency Enforcement Team and held its first meeting on September 8. The report was published in response to President Biden’s digital asset executive order and gives particular attention to NFTs and DeFi.

The SEC is claiming in Illinois federal court that a Chicago crypto investment advising firm, Chicago Crypto Capital LLC, illegally raised $1.5 million in an unregistered offering through which it sold tokens of the asset BXY at a significant markup to at least 100 individuals, most of whom were inexperienced investors.