Crypto Law Developments Shake U.S. and Europe This Week
This week in crypto law saw significant developments across the U.S. and Europe, with legal challenges, sanctions, and regulatory proposals shaping the industry's landscape. The Independent Community Bankers of America (ICBA) filed a lawsuit against the Office of the Comptroller of the Currency (OCC), challenging its framework for crypto trust banks. The lawsuit targets the OCC’s March 2026 National Bank Chartering rule and Protego’s charter approval, arguing that the agency overstepped its authority by allowing national trust banks that do not adhere to federal fiduciary limitations.
Meanwhile, the U.S. Treasury took action against the A7 Network, a sanctions-evasion network linked to Russia and Iran. The Office of Foreign Assets Control (OFAC) designated the network as a significant transnational criminal organization, while the Financial Crimes Enforcement Network (FinCEN) proposed restrictions on funds transfers involving its sub-agents. The network’s ruble-backed A7A5 token was identified as part of its infrastructure, underscoring the need for exchanges and payment businesses to review exposure beyond token names alone.
In Congress, Senator Richard Blumenthal released a report criticizing Tether’s sanctions controls, following an investigation into 846 wallets associated with Iran. The report called on Treasury and the Justice Department to investigate potential violations, though Tether defended its cooperation with authorities, citing the freezing of approximately $550 million in Iran-linked assets during 2026.
In Europe, the European Securities and Markets Authority (ESMA) proposed expanding the Markets in Crypto-Assets (MiCA) framework to include stricter regulations for decentralized finance (DeFi) access and stronger enforcement. The proposals aim to clarify treatment of noncompliant stablecoins and introduce targeted requirements for staking, lending, and borrowing. ESMA also recognized that open-source development and permissionless infrastructure should not automatically constitute regulated intermediation.
The UK’s Financial Conduct Authority (FCA) opened its crypto authorization application window, running through February 28, 2027. The FCA emphasized that authorization is not automatic, requiring firms to map their products against new regulated activities and address gaps in governance, safeguarding, financial resources, and compliance.