The New York State Bar Association announced on September 12 that it is launching a task force to make recommendations on how virtual currencies and digital assets should be regulated within New York, while also studying how the technologies can help the state's legal community. The group is called the Task Force on Emerging Digital Finance and Currency and will be led by a partner at Drohan Lee LLP and the co-chair of Perkins Coie LLP's fintech industry group. Its member also include representatives from the financial sector and academia, cryptocurrency and blockchain experts, and other attorneys.

Sen. Cynthia Lummis (R-WY) wrote an opinion piece published by Coin Telegraph in which she argues that digital assets are the best way to ensure that the United States remains a fiscal world leader. She writes, “Decentralized digital assets…offer users a way to invest in a store of value that governments cannot inflate away. The ledger technology undergirding it, called blockchain, has many incredible applications, from currency to tracking shipping and enabling smart contracts,” and notes that in order for this goal to be achieved, Congress must give authority to federal agencies like the SEC and CFTC and create a clear, common set of definitions for regulation of digital assets.

In an Axios interview, Rep. Tom Emmer (R-MN) said that cryptocurrency “cannot be partisan… This is literally about looking at America and opportunities for Americans [...] If you try to take all risk out of this stuff, well, you're going to take away a lot of the opportunity [...] It can either happen here in this country or it will happen somewhere else.”

The FDIC has issued cease and desist letters to five companies including FTX US for making cryptocurrency-related false or misleading representations about deposit insurance. The FDIC has said, “Based upon evidence collected by the FDIC, each of these companies made false representations—including on their websites and social media accounts—stating or suggesting that certain crypto-related products are FDIC-insured or that stocks held in brokerage accounts are FDIC-insured.”

Senate Banking Committee Ranking Member Pat Toomey (R-PA) sent a letter to FDIC Director and Acting Chairman Martin Gruenberg on August 16 saying that he is investigating claims that the FDIC has blocked banks from doing business with crypto businesses. The letter says, “Personnel in the FDIC’s Washington, D.C., headquarters are urging FDIC regional offices to send letters to multiple banks requesting that they refrain from expanding relationships with crypto-related companies, without providing any legal basis for sending such letters.”

The Federal Reserve issued a supervisory letter directing banks to notify regulators before engaging in any new activity involving cryptocurrency startups or digital asset markets. It states, “Banking organizations engaging in crypto-asset-related activities face potential legal and consumer compliance risks,” and adds that, “if any supervised banking organization has questions regarding the permissibility of any crypto-asset-related activities or about the applicability of any filing requirements, it should consult its lead supervisory point of contact at the Federal Reserve.”

The FTC is ordering BitMart operators Bachi.Tech Corporation and Spread Technologies LLC to turn over information. The companies had been sent subpoenas in May seeking information about their security and how they have handled customer complaints, and the companies had pushed back on the request at the time, saying it was overly broad. The FTC denied their effort to block the FTC from compelling them to provide this information and is now investigating whether the companies misled users about their cybersecurity protections or failed to comply with financial services laws.

The Department of the Treasury announced that it has sanctioned digital currency mixer Tornado Cash, a service that officials say has been used by a North Korean hacking group (Lazarus Group) to launder more than $455 million in stolen funds. This marks the second time that Treasury has blacklisted a cryptocurrency mixing service.