Court Strikes Down SEC Short Sale Disclosure Rules

Summer 2025 may mark the end of the beginning for digital assets in the United States. With the launch of Project Crypto, new legislation like the GENIUS Act and Clarity Act, and the resolution of Ripple’s long-running litigation, regulators and lawmakers are signaling a shift from years of uncertainty toward building a durable framework for digital assets. The SEC, CFTC, and Treasury are moving in concert to modernize securities laws, strengthen stablecoins, and position the U.S. as the global hub for crypto innovation.

Project Crypto: SEC Chairman, Paul Atkins announced “Project Crypto” in an effort to make the U.S. the crypto capital of the world.Mr. Atkins made reference to the innovation, evolution and expansion of U.S. markets throughout our history. In that tradition, Project Crypto is a Commission-wide initiative to modernize securities laws to enable America’s financial markets to move on-chain.Mr. Atkins directed SEC policy divisions to work with the SEC’s Crypto Task Force led by Commissioner Hester Peirce to propose ways to implement the recommendations of the President’s Working Group (“PWG”) on Digital Asset Markets. SEC staff have been directed to draft clear and simple rules of the road for crypto asset distributions, custody and trading.

Project Crypto Sprint: Acting CFTC Chair Caroline Pham announced a similar Crypto Sprint to implement the PWG’s recommendations. The CFTC has also launched an initiative for trading spot crypto asset contracts that are listed on a CFTC registered futures exchange.

GENIUS Act:The U.S. Treasury issued a request for comment related to the Guiding and Establishing National Innovation for U.S. Stablecoins(“the GENIUS Act”) which supports the growth and use of digital assets. The GENIUS Act, Senate Bill 1582,became law in July and provides for the regulation and oversight of payment stable coins which are digital assets used as a means of payment or settlement and backed with, among other things, U.S. coins and currency.

President’s Working Group:The PWG released a report that provides a roadmap for strengthening American leadership in digital financial technology.The White House Fact Sheet is also available.The PWG recommends that the SEC and CFTC enable trading of digital assets at the Federal level by providing clarity to market participants on registration, custody, trading, and recordkeeping. The PWG recommends modernizing bank regulations for digital assets, strengthening the role of the U.S. dollar through the adoption of U.S. dollar backed stable coins, combating illicit finance and money laundering, and ensuring fairness and predictability in digital asset taxation.

Ripple Appeals Dismissed: The SEC ended a nearly five-year legal battle with Ripple Labs, Inc. It dismissed the Commission’s appeal and Ripple Labs’ cross appeal.In December of 2020, the SEC alleged that Ripple and two executives raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.Commissioner Peirce remarked that “… the SEC’s case against Ripple was finally laid to rest. A welcome development for many reasons, including that minds once occupied with litigation now can concentrate on creating a clear regulatory framework for crypto.”

Clarity Act: The House voted to pass the Digital Asset Market Clarity Act of 2025, H.R. 3633, in July. The bill would give the CFTC a central role in regulating digital commodities and related intermediaries while preserving SEC authority over primary market crypto transactions, subject to a new limited exemption from SEC registration requirements for fundraising.The bill would provide regulatory certainty to the digital asset space.The Senate expects the bill to be done by the end of September.