US Crypto Regulations Weekly Recap: States Advance Bitcoin Reserve Bills and More

Florida Senator Proposes Bitcoin Investments to Combat Inflation

Florida Senator Joe Gruters introduced a bill on February 7, 2025, proposing that the state invest a portion of its funds in Bitcoin and other digital assets to mitigate inflation's impact on purchasing power. The bill suggests empowering Chief Financial Officer Jimmy Patronis to allocate up to 10% of certain state funds into Bitcoin, a more significant cap than Wyoming’s recent 3% proposal. This move aligns with a broader trend, as Kentucky also introduced legislation for a Bitcoin reserve, while 17 states are assessing similar measures. 

Utah's bill for a 5% allocation is advancing quickly, positioning it to potentially become the first state with a Bitcoin reserve. Despite some resistance, such as North Dakota's recent rejection of crypto investment proposals, interest in Bitcoin as a strategic reserve asset continues to grow, evidenced by nearly $5 billion inflows to U.S. spot Bitcoin ETFs in January 2025 alone.

North Carolina Becomes 20th U.S. State to Allow Bitcoin Reserves

North Carolina has become the 20th U.S. state to introduce Bitcoin reserve legislation with House Bill 92, allowing the state treasurer to invest up to 10% in qualifying cryptocurrencies with a market cap exceeding $750 billion. As of now, only Bitcoin meets this criterion, greatly surpassing Ethereum's $323 million market cap. Investments will occur through regulated exchange-traded products, with oversight from the Governor and Council of State. 

Additionally, third-party investment managers must manage at least $100 million in assets. Other states like Montana and Florida are also pursuing similar initiatives, with Montana’s House Bill 429 proposing a special revenue account for crypto and digital assets, while Florida's bill advocates Bitcoin as a hedge against inflation. Other states including Maryland, Iowa, and Kentucky are introducing their own bills to incorporate Bitcoin and digital assets as part of their financial strategies, reflecting a growing trend in state-level cryptocurrency adoption.

CFTC Launches Initiatives to Review Prediction Markets and Pilot Digital Asset Program

The U.S. Commodity Futures Trading Commission (CFTC) is taking significant steps under Acting Chair Caroline Pham to address regulatory frameworks for emerging markets through two initiatives. First, a public roundtable is set to review regulations governing prediction markets, affecting platforms like Kalshi and Polymarket. 

This event will engage market participants, legal experts, and stakeholders to evaluate the legality of event contracts under the Commodity Exchange Act and discuss consumer protection and potential regulatory changes, with public comments due by February 21. Pham has criticized previous regulatory approaches as a “sinkhole of legal uncertainty.” 

Second, a Crypto CEO Forum will initiate a pilot program focused on digital asset markets, examining the use of tokenized non-cash collateral like stablecoins via distributed ledger technology. Leaders from major firms such as Coinbase, Ripple, and Circle will participate, emphasizing "responsible innovation" to establish the U.S. as a leader in the digital asset space. Further details on the forum are pending.

STABLE Act of 2025 Introduced, Temporarily Banning Certain Stablecoins Amid Regulatory Push

The STABLE Act of 2025, introduced by US House Financial Services Committee Chairman French Hill and Digital Assets Subcommittee Chairman Bryan Steil, proposes a regulatory framework for stablecoins in response to financial stability concerns. The key provision includes a two-year moratorium on endogenously collateralized stablecoins, which could pose risks of liquidity and market manipulation. A comprehensive study by the US Treasury, in coordination with the Federal Reserve, SEC, and OCC, is mandated to evaluate the technological and governance aspects of stablecoins and their market impact. 

The act defines acceptable stablecoin issuers as either insured depository institutions or qualified non-bank entities, imposing stringent capital and liquidity standards. Issuers will be subjected to monthly disclosures, independent audits, and risk management protocols. Following the bill's passage, federal agencies have 180 days to establish implementation rules, with an 18-month transition period before enforcement.

Elon Musk Calls for Impeachment of Judge After Ruling Limits Access to Treasury Data

Elon Musk has called for the impeachment of New York federal Judge Paul Engelmayer following a ruling that limits Musk's access to U.S. Treasury payment systems and confidential data. This comes after Engelmayer's February 8 decision, which was influenced by concerns raised by 19 Democratic state attorneys general about the potential for corruption and misuse of taxpayer information. 

Musk, leading the Department of Government Efficiency (DOGE), criticized the judge as "corrupt" on his platform X, highlighting his frustrations with the ruling that he believes undermines efforts to curtail federal spending and oversee government waste. The ruling aimed to protect sensitive information from unauthorized access, citing risks associated with hacking and confidentiality. Musk's initiative has focused on scaling back minor federal agencies like USAID, but seeks to leverage Treasury data to target larger inefficiencies in the budget. 

Binance & SEC Agree to 60-Day Legal Pause Amid Settlement Talks

On February 10, 2025, Binance and the SEC filed a joint motion in the U.S. District Court for the District of Columbia to pause legal proceedings for 60 days to explore a settlement and conserve resources. The SEC's newly established crypto task force, led by Commissioner Hester Peirce, could influence the case’s resolution. The pause may serve as a model for other crypto firms, including Ripple, Coinbase, and Kraken, facing SEC lawsuits. Acting SEC Chair Mark Uyeda, appointed by President Trump, initiated regulatory reforms, shifting from enforcement to proactive policymaking. 

Binance, previously accused of operating as an unregistered exchange and misleading investors, welcomed the pause, reaffirming its commitment to regulatory compliance. A judge had dismissed SEC claims that Binance’s BNB token sales were securities. Ripple's XRP case continues in the Court of Appeals after a 2023 ruling deemed XRP not a security when sold to retail investors. A joint status report will follow the pause.

SEC's Hester Peirce Declares Memecoins like TRUMP Outside Agency's Jurisdiction

SEC Commissioner Hester Peirce stated that memecoins, including the TRUMP token, are not under the SEC's jurisdiction, especially as investors reportedly lost $2 billion following a drastic decline in the token's value. Launched on January 17, TRUMP peaked at $72.60 on January 19 but has since plummeted approximately 80%, resulting in a market capitalization drop from $14.5 billion to $3 billion. Peirce noted that regulation of memecoins may need to be addressed by Congress or other agencies, as they resemble collectibles rather than traditional cryptocurrencies. Reports indicated that 813,000 crypto wallets incurred losses, while the Trump Organization earned $100 million in trading fees. Industry experts, like Nate Geraci and Lyn Alden, commented that memecoins reflect community support and trends rather than technological innovation, drawing parallels to past market phenomena like initial coin offerings and non-fungible tokens.

Trump to Nominate Pro-Crypto Regulators Quintenz for CFTC, Gould for OCC

Bloomberg reported that Donald Trump intends to nominate Brian Quintenz, the head of policy at Andreessen Horowitz’s (a16z) crypto division, as chairman of the Commodity Futures Trading Commission (CFTC). Quintenz, a former CFTC commissioner, has been advising the Trump transition team on crypto regulation. If confirmed, he is expected to advocate for making the CFTC the primary regulator for cryptocurrencies. Acting CFTC Chair Caroline Pham praised his selection. The document also revealed Trump’s plans to appoint Jonathan Gould as Comptroller of the Currency and Jonathan McKernan as head of the Consumer Financial Protection Bureau (CFPB). McKernan would take over amid major upheaval after Trump recently weakened the CFPB. 

Trump Brokers Prisoner Swap: Russian Bitcoin Fraudster Vinnik Released for American Teacher Fogel

Alexander Vinnik, former operator of the bitcoin exchange BTC-e, is set to be released from U.S. custody in a prisoner swap brokered by President Trump, trading him for American teacher Marc Fogel. Vinnik, arrested in 2017, faced charges related to fraud and money laundering stemming from BTC-e's handling of over $9 billion in transactions, making it a choice platform for criminals and resulting in a $121 million loss, according to U.S. prosecutors. He was convicted in France in 2020 and pleaded guilty to money laundering conspiracy in May 2024. Fogel, held in Russia for three and a half years on marijuana charges, returned to the U.S. on February 11, 2025. Trump met Fogel at the White House, emphasizing his role in facilitating the exchange. Additionally, Trump indicated that another American's release might follow soon. The deal was also aided by Saudi Arabia.

New York Senator Proposes Crypto Task Force to Study Digital Asset Impact

New York Senator James Sanders Jr. has introduced a bill to establish a 17-member crypto task force aimed at studying the impact of digital assets on state revenue and environmental issues, as New York reassesses its strict crypto regulations. The panel, which will include experts from financial services and environmental groups, is expected to deliver findings by late 2027. New York's current regulations, largely stemming from the 2015 BitLicense framework, present challenges for crypto firms, prompting some to bypass the state. Sanders emphasizes the importance of blockchain for innovation and economic growth, especially as New York competes globally for financial investments. Despite previous initiatives since 2019, including a vetoed bill in 2023, skepticism persists regarding this task force's viability. Future findings could potentially shape New York's crypto policy as it aims to maintain its status as a leading financial capital amid shifting federal regulations and emerging market trends.

SEC and CFTC Revive Joint Advisory Committee to Pursue Unified Digital Asset Regulation

Reports emerged that the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are prioritizing a unified approach to digital asset regulation by reviving the Joint Advisory Committee (JAC), which was inactive since 2014. Acting CFTC Chair Caroline Pham is advocating for the committee's reinstatement to address jurisdictional uncertainties around digital assets. This initiative marks a shift towards more structured policymaking, moving away from enforcement-heavy tactics. 

Recently, the CFTC launched a pilot program for tokenized non-cash collateral in derivatives markets and reorganized its enforcement division to emphasize fraud prevention. Meanwhile, SEC Commissioner Mark Uyeda’s leadership signals a more cooperative regulatory environment, with Commissioner Hester Peirce heading a new Crypto Task Force to establish clear guidelines that promote industry growth while ensuring market integrity. These developments indicate a concerted effort to create a comprehensive regulatory framework for the evolving crypto landscape.