Crypto Winter Leads to Explosion of Regulatory Activity

Meanwhile, the U.S. Department of Justice (DOJ) has paved its own path forward in the crypto space. Judge Rakoff once famously wrote, "to prosecutors of white collar crime, the mail fraud statute is our Stradivarius, our Colt 45, our Louisville Slugger, our Cuisinart — and our true love." Jed S. Rakoff, The Federal Mail Fraud Statute (Part 1), 8 Duq. L. Rev. 771 (1980). Modern day white-collar prosecutors have often relied on mail fraud's cousin, wire fraud, and have used that statute to great effect in the crypto space. By principally relying on the wire fraud statute, federal prosecutors have largely sidestepped the question of whether and which digital assets constitute securities or not.

Aggressive Regulatory Enforcement and Turf War

With no federal regulatory framework specifically designed for digital assets in the United States, there has been an ongoing turf war between the SEC and the CFTC over whether certain digital assets should be regulated as "securities" or "commodities" or both. The SEC has made clear that it intends to be the lead regulator in the crypto market and that it believes that virtually all digital assets are securities. On the other hand, the CFTC claims that certain digital assets, such as Bitcoin and Ether, are commodities.