February 1, 2025 18:21
Explore the recent cryptography policies updates, including tornado cash penalties and the SEC 121 personnel accounting bulletin. Understand the implications for the cryptographic industry.
Recent developments in the panorama of crypto policies A16Z Crypto.
Tornado cash: update of legal procedures
In a significant update of the United States District Court for the West District of Texas, procedural actions have been observed in the current case against Tornado cash. Initially sanctioned by the United States Treasury in 2022 for alleged money laundering activities, including the profits of the cyber hacks of North Korea, the case has seen several developments. In November 2024, the Court of Appeals of the 5th Circuit ruled that the Treasury had exceeded its authority, referring the case to the District Court to determine the resources.
The Texas District Court is now preparing to reopen legal procedures. Despite the reports of the media that suggest a reversal of the sanctions, the sanctions remain in force until a new court order is issued. The result of this case could have long -range implications, especially taking into account a similar continuous dispute and the potential for the case to reach the Supreme Court.
SEC rescinding the Personnel Accounting Bulletin 121
In another important policy change, the SEC has terminated the personnel of the Accounting Bulletin No. 121, which previously required entities to safeguard customer cryptography assets to inform them as liabilities. This directive, effective since April 2022, faced an important opposition of the political leaders who argued that it was an overreach.
With the issuance of the Personnel Accounting Bulletin No. 122, the custodians can now apply standard accounting principles, reflecting the true nature of the custody agreements instead of presuming liabilities. This change is expected to make it more financially viable that banks participate in cryptographic custody without the load of additional liabilities.
The repeal of SAB No. 121 follows a bipartisan effort in Congress to cancel the newsletter, which had been vetoed by President Biden in May 2024. The new guide is aligned with the industry that requires more appropriate regulations that do not hinder innovation .
Executive order on digital financial technology
President Trump recently issued an executive order aimed at strengthening American leadership in digital financial technology. The order emphasizes the importance of digital assets and blockchain technology to boost innovation and economic growth. It also proposes the establishment of a National Reserve of Digital Assets, potentially of cryptocurrencies seized through the efforts of application of the law.
The Executive Order underlines the administration’s commitment to support responsible development and the use of digital technologies, preparing the scenario for more regulatory adjustments.
These policy updates mark the crucial steps in the evolving regulatory environment for cryptocurrencies, with significant implications for the industry in general. Interested parties are recommended to remain informed as these developments develop.
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