Crypto Law Landscape Shifts with Legal Challenges and Regulatory Actions
This week in crypto law saw significant developments, including legal challenges, regulatory scrutiny, and new compliance obligations. The Independent Community Bankers of America filed a lawsuit against the Office of the Comptroller of the Currency, challenging its crypto trust bank framework. The suit targets the OCC’s March 2026 National Bank Chartering rule and Protego’s charter approval, arguing that the agency overstepped its authority. Crypto businesses relying on national trust charters now face planning uncertainty, as the litigation could impact financing, product launches, and commercial agreements.
The U.S. Treasury also took action against the A7 Network, designating it as a significant transnational criminal organization connected to Russia and Iran. The network uses the ruble-backed A7A5 token for sanctions evasion. While the Office of Foreign Assets Control’s designation carries immediate blocking consequences, the Financial Crimes Enforcement Network’s proposed transfer restrictions are still under consideration. Businesses are advised to review their exposure beyond token names, focusing on counterparty ownership and transaction purposes.
In Congress, Senator Richard Blumenthal released a report criticizing Tether’s sanctions controls, following an investigation into 846 wallets linked to Iran. Blumenthal called for a Treasury and Justice Department investigation, but Tether emphasized its cooperation, citing $550 million in Iran-linked assets frozen during 2026. Businesses using stablecoins should assess their own exposure and compliance procedures, rather than relying solely on issuers’ controls.
In Europe, the European Securities and Markets Authority proposed expanding the Markets in Crypto-Assets Regulation’s reach, including stronger enforcement and clearer rules for decentralized finance. The UK also opened its crypto authorization application window, with firms required to apply by February 28, 2027, ahead of the regime’s commencement on October 25, 2027. Companies serving UK customers must now map their products against the new regulated activities and prepare for authorization.