Courts and regulators are addressing cryptocurrency through several distinct legal frameworks, with developments this week spanning enforcement actions, banking policy, tax challenges, and international asset recovery.
CFTC Settlement Stands Despite Agency Policy Shift
On October 15, a federal judge in New York declined to vacate a settled enforcement case between the CFTC and Gemini Trust Company, despite the agency's change in enforcement priorities. Judge Alvin Hellerstein ruled that the parties had not satisfied standards for post-judgment relief.
The CFTC originally sued Gemini in 2022 for allegedly making false or misleading statements during review of a proposed bitcoin futures contract. Gemini agreed to a $5 million civil penalty and permanent injunction in January 2025. The CFTC later joined Gemini in seeking to reopen the judgment after concluding the case would not have been filed under current enforcement standards.
The decision signals that a change in agency leadership or enforcement policy does not automatically unwind final judicial orders. Companies evaluating settlements should carefully assess the long-term consequences of injunctive language, admissions, and collateral regulatory effects.
Major Banks Restricted Digital-Asset Services
The Office of the Comptroller of the Currency released findings on October 14 that all nine of the largest national banks under its supervision maintained policies between 2020 and September 2025 that restricted financial services based on lawful business activities or nonfinancial considerations.
The OCC specifically identified digital-asset issuers, exchanges, and administrators as industry sectors subject to restrictions. The agency attributed many restrictions to broad reputational-risk policies lacking objective, risk-based standards. The OCC reviewed approximately 50,000 documents totaling roughly 420,000 pages and nearly 100,000 complaints.
While the report does not create new rights to banking services or prohibit legitimate financial-crime assessments, it signals greater scrutiny of categorical exclusions. Digital-asset businesses should be prepared to demonstrate licensing status, transaction-monitoring controls, customer profiles, and sanctions compliance.
Illinois Crypto Tax Faces Expedited Court Review
On October 13, industry groups and the State of Illinois jointly requested expedited proceedings on two challenges to the state's Digital Asset Tax Act, which would impose a 0.2% tax on specified digital-asset purchases and transfers.
The lawsuits allege violations of federal and state constitutional provisions and preemption under the federal Internet Tax Freedom Act. The parties proposed filing summary-judgment motions on November 4, with briefing completed by January 22, 2027, and a decision requested by March 1. Enforcement of the tax has been separately stayed until July 1, 2027.
USDC Designated as EU's First Significant E-Money Token
The European Banking Authority classified USDC as the first significant e-money token under the Markets in Crypto-Assets Regulation on October 14. Among 45 e-money tokens notified under MiCA, USDC is the first to meet applicable significance criteria.
Beginning November 12, USDC will be subject to dual supervision. The EBA will oversee own funds, reserve assets, liquidity requirements, and recovery planning, while France's Autorité de Contrôle Prudentiel et de Résolution will handle governance, outsourcing, and fitness assessments. The classification subjects USDC to heightened supervision due to its scale and importance.
London Court Applies Chinese Law to Bitcoin Recovery Case
The High Court in London ruled on October 12 that Chinese law governs ownership claims to approximately 61,000 bitcoin seized by British authorities. The bitcoin is connected to Zhimin Qian, convicted following a large investment fraud conducted in China.
Victims had argued that English property law should apply because the bitcoin is held in the United Kingdom. Justice Mark Turner concluded that Chinese law applies because the alleged misrepresentations, money transfers, contractual relationships, and economic losses occurred in China.
The ruling underscores that the physical location of seized crypto assets may not determine the law governing competing ownership claims. Courts may instead focus on where the underlying fraud and economic loss occurred.
