Lowenstein Crypto advises leading digital asset and cryptocurrency projects, exchanges, and trading firms. Our practice covers regulatory advice, transactions and structuring advice, investigations, and adversarial matters including commercial disputes, bankruptcy, and related litigation. As these markets continue their rapid growth and market participants continue to evolve and mature their businesses, we are providing this weekly digest as a resource that highlights and summarizes a selection of key recent legal regulatory developments.
Nasdaq Seeks SEC Approval for Listing Tokenized Equities
On Sept. 8, Nasdaq announced its Form 19b-4 submission seeking the U.S. Securities and Exchange Commission’s (SEC) approval to amend its rules and enable trading of tokenized equities on the Nasdaq Stock Market (Proposal). The Proposal includes a change to the definition of a security and clarifies that a security may be traded in either a traditional form or a tokenized form whereby the token functions as a digital representation of ownership and rights utilizing blockchain technology. In the related press release, Nasdaq noted that tokenized securities will be subject to the same requirements and will not result in material differences to investors; however, Nasdaq will allow the Depository Trust Co. to clear and settle the trade, recording the asset as a blockchain token. A copy of Nasdaq’s Form 19b-4 may be viewed here. The related press release may be viewed here.
SEC and CFTC Issue Joint Statement on Harmonizing Opportunities
Following the Sept. 4 joint statement on spot crypto asset trading, the heads of the SEC and Commodity Futures Trading Commission (CFTC) issued a joint statement on Sept. 5 to strengthen coordination as securities and commodities markets increasingly intersect, particularly in areas like cryptocurrency and emerging financial technologies. Emphasizing the need to eliminate regulatory gaps and uncertainty, both agencies are exploring harmonized approaches to product definitions, reporting standards, margin requirements, and innovation exemptions. Key areas of focus include 24/7 trading markets, event and perpetual contracts, portfolio margining, and decentralized finance (DeFi). A joint roundtable on regulatory harmonization is scheduled for Sept. 29, reflecting the agencies’ shared commitment to creating a more coherent, innovation-friendly U.S. regulatory environment while maintaining investor protections and market integrity. See the CFTC public statement here.
SEC Chair Outlines Vision for Global Regulatory Cooperation and Market Innovation
On Sept. 10, the chair of the SEC, Paul Atkins, spoke at an international roundtable held in Paris, where he emphasized the importance of global cooperation to promote economic growth and innovation in capital markets while reaffirming the SEC’s core mission of investor protection, market integrity, and capital formation. Highlighting recent SEC efforts, Atkins discussed a review of accommodations for foreign issuers, concerns over the EU’s double materiality approach, and the need for continued focus on high-quality, financially material disclosures. A major portion of the address introduced Project Crypto, an initiative to modernize U.S. securities regulations to support blockchain-based financial markets and digital asset innovation, with a commitment to ending “regulation by enforcement” and instead offering clear rules to encourage domestic development. Atkins also expressed enthusiasm for emerging technologies like AI in finance and advocated for international collaboration to ensure the U.S. and its allies remain leaders in financial innovation. See the full keynote address here.
SEC’s Crypto Task Force to Host Public Roundtable on Financial Surveillance and Privacy
On Sept. 8, the SEC’s Crypto Task Force announced it will host a public roundtable on financial surveillance and privacy on Friday, Oct. 17 from 1 to 4 p.m. at the SEC’s headquarters in Washington, D.C. The event, prompted by recent federal initiatives and directed by Commissioner Hester Peirce, aims to explore privacy-protecting technologies and policy considerations in the crypto space. The roundtable will feature expert panelists and be open to the public, with live streaming available on SEC.gov. This initiative aligns with the Crypto Task Force’s broader mission to clarify crypto regulations and support U.S. leadership in digital assets and fintech while safeguarding individual privacy and economic liberty. See the SEC press release here.
Justice Department Seeks Forfeiture of Over $5M in Bitcoin Tied to SIM Swap Attacks
On Sept. 9, the U.S. Justice Department (DOJ) filed a civil forfeiture complaint targeting over $5 million in bitcoin, alleged to be proceeds from SIM swap attacks that compromised the cryptocurrency wallets of five victims across the U.S. between October 2022 and March 2023. According to the complaint, attackers exploited vulnerabilities in multifactor authentication by transferring victims’ phone numbers to SIM cards under their control, intercepting security codes to access, and draining crypto accounts. The stolen funds were laundered through a series of complex transactions, including circular transfers via the online casino Stake.com, designed to obscure their origin. The case is part of a broader DOJ effort to combat cybercrime, led by the Computer Crime and Intellectual Property Section, which has recovered hundreds of millions of dollars in stolen funds since 2020. See the DOJ press release here.
U.S. Authorities Seek Forfeiture of $12M in Cryptocurrency Linked to Fraud Scheme
On Sept. 9, the U.S. Attorney’s Office filed a civil forfeiture complaint seeking over $12 million in tether cryptocurrency connected to a cryptocurrency investment fraud targeting 10 Mandarin-speaking women, who collectively lost more than $10.3 million. According to the complaint, the perpetrator(s) approached victims via unsolicited text messages and persuaded them to invest through a fake platform, ShakepayEX, designed to resemble a legitimate Canadian cryptocurrency exchange. Victims were unable to withdraw funds due to fraudulent excuses and demands. Authorities used blockchain analysis and other investigative methods to link the cryptocurrency to the scheme. Officials emphasized that cryptocurrency scams can have severe financial and emotional impacts, and law enforcement is actively using available tools to pursue justice and protect victims. The FBI continues to investigate the case, with Assistant U.S. Attorney Joshua R. Rosenthal representing the government. See the U.S. Attorney’s Office press release here.
