October 27, 2025
This week in digital asset federal policy
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This week decoded
Last week in digital asset federal policy, Senators and industry tried to regain legislative momentum following the public leak of a draft Democratic proposal to impose illicit finance regulations on DeFi. Pro-crypto Senate Democrats held a closed-door meeting with a group of digital asset industry executives for a frank discussion on how to best satisfy key policy concerns within developing market structure legislation. Republican Senators held their own meetings together and with industry executives, joined by White House AI & Crypto Czar David Sacks. The day ended with renewed optimism that bipartisan negotiators could return to the negotiating table.
This week, we enter week five of the deeply partisan government shutdown, which creates a chilling effect on those bipartisan market structure negotiations.
After weeks of speculation, the White House announced the nomination of Mike Selig to lead the CFTC. The announcement was potentially overshadowed by news of President Trump’s pardon of Binance founder CZ, sparking intense reactions from Democratic lawmakers.
At the Federal Reserve’s first Payments Innovation Conference, Fed Governor Christopher Wallace announced the creation of new payment accounts for financial services transforming the U.S. payments system.
Treasury will begin processing public comments submitted in response to their request for comment on innovative methods to detect illicit activity involving digital assets. Public comments on their advance notice of proposed rulemaking for the GENIUS Act are due November 4, 2025. Stakeholders are watching closely whether the shutdown will measurably impact Treasury’s rulemaking timelines.
Read more below
Congress
Hearings
Last week
The October 22 House Financial Services Committee hearing on Oversight of Prudential Regulators was postponed.
The October 23 Senate Banking, Housing and Urban Affairs Committee hearing on Update from the Prudential Regulators: Rightsizing Regulation to Promote American Opportunity was postponed.
This week
No relevant hearings are scheduled this week.
Legislation
Reps. Troy Downing (R-MT), Byron Donalds (R-FL), Warren Davidson (R-OH), Marlin Stutzman (R-IN), Buddy Carter (R-GA), and Barry Moore (R-AL) introduced the Retirement Investment Choice Act to codify President Trump’s Executive Order (EO) 14330 by directing the Department of Labor (DOL) and Securities and Exchange Commission (SEC) to allow investments like private equity, real estate, and digital assets from being eligible for inclusion in 401(k) retirement plans. (Text)
Sens. Adam Schiff (D-CA) and Elizabeth Warren (D-MA) introduced a resolution condemning President Trump for pardoning Changpeng Zhao, the founder and majority owner of the crypto exchange Binance, and calling for Congress to use its authority to stop corruption. (Text)
Correspondence
Sens. Adam Schiff (D-CA), Ron Wyden (D-OR), Andy Kim (D-NJ), Catherine Cortez Masto (D-NV), Dick Durbin (D-IL), Gary Peters (D-MI), Elissa Slotkin (D-MI), and Cory Booker (D-NJ) sent a letter to Steve Witkoff, Assistant to the President and Special Envoy, requesting information on his failure to divest World Liberty Financial (WLF). (Letter)
Senate Banking Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY) sent a letter to the Consumer Financial Protection Bureau (CFPB) in support of the current open banking rule mandated by section 1033 of the Dodd-Frank Act, saying, “Large banks have shown they’ll restrict access for political reasons, targeting industries and individuals they disagree with, including gun manufacturers, digital assets, churches, and even President Trump. We cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation, and increase costs. Throwing up barriers would drive entrepreneurs overseas and weaken America’s leadership in financial technology.” (Letter)
Senate Banking, Housing, and Urban Affairs Committee Ranking Member Elizabeth Warren (D-MA) sent a letter to Treasury Secretary Scott Bessent providing feedback on the Treasury Department’s advance notice of proposed rulemaking on its plans to implement the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), saying, “Experts, policymakers, and Democratic and Republican members of Congress have raised the importance of fixing flaws in the GENIUS Act as written. It is critical that Treasury take steps to implement and enforce the law in a manner that attempts to limit severe risks to U.S. financial stability, consumers, taxpayers, and national security.” (Letter)
Rep. Bennie Thompson (D-MS) sent letters to various corporations, including crypto companies, requesting information regarding alleged donations to fund the White House State Ballroom Project. (X)
Trump Administration
White House
President Trump nominated Mike Selig as Chair of the Commodity Futures Trading Commission (CFTC). Selig has been serving as chief counsel for the Securities and Exchange Commission’s Crypto Task Force.
The Office of Management and Budget (OMB) released a memo entitled Streamlining the Review of Deregulatory Actions to provide guidance to agencies on streamlining the deregulation of prior government regulations and to establish new timelines and guidelines for review of deregulation efforts by the Office of Information and Regulatory Affairs (OIRA). The memo details benefits of deregulation, including, “The collective value of a group of deregulatory actions and the synergies between deregulation across multiple areas of the law and across the entire web of ensuing causal effects as they spread throughout the national economy may be greater than the sum of its parts. For instance, deregulating the energy sector will not simply make driving cars and use of electricity to power our homes less costly, it also benefits America’s tech sector, increasing AI innovation and improving the development of new cryptocurrency assets — benefits that in turn would further profit consumers in a virtuous cycle.” (Memo)
Treasury Department
The deadline for public comments on the Treasury Request for Comment on Innovative Methods to Detect Illicit Activity Involving Digital Assets were due October 17, 2025. Submissions can be viewed at Regulations.gov.
The extended deadline on the Advance Notice of Proposed Rulemaking (ANPRM) on GENIUS Act Implementation is November 4, 2025, as published in the Federal Register on October 1, 2025. (ANPRM)
Federal Reserve
The Federal Reserve Board held its first Payments Innovation Conference to encourage collaboration between traditional financial institutions, emerging digital asset and fintech companies, and regulators. At the conference, Fed Governor Christopher Wallace announced the availability of a new “skinny” master account for financial services transforming U.S. payments systems. (Press release)
Noteworthy Quotes and Events
ADMINISTRATION
White House
On the President’s pardon of Binance founder Changpeng Zhao, White House spokesperson Karoline Leavitt said in a statement, “President Trump exercised his constitutional authority by issuing a pardon for Mr. Zhao, who was prosecuted by the Biden Administration in their war on cryptocurrency. In their desire to punish the cryptocurrency industry, the Biden Administration pursued Mr. Zhao despite no allegations of fraud or identifiable victims.” (Axios)
Federal Reserve
Fed Governor Christopher Waller delivered a keynote address at the Payments Innovation Conference on Embracing New Technologies and Players in Payments in which he said, “…I believe we can and should do more to support those actively transforming the payment system. To that end, I have asked Federal Reserve staff to explore the idea of what I am calling a ‘payment account.’ Today, Federal Reserve Banks provide access to master accounts and financial services to legally eligible entities following our Guidelines for Evaluating Account and Services Requests. The payment account would be available to all institutions that are legally eligible for an account and could be beneficial for those focused primarily on payments innovations. This payment account concept would be targeted to provide basic Federal Reserve payment services to legally eligible institutions that right now conduct payment services primarily through a third-party bank that has a full-fledged master account…To be more concrete, let me describe a possible prototype for this type of payment account or, as I sometimes call it, a “skinny” master account. The account would provide access to the Federal Reserve payment rails while controlling for various risks to the Federal Reserve and the payment system.” (Remarks)
CONGRESS
Market Structure Legislation
Sen. John Kennedy (R-LA) delivered remarks on Senate floor about the future of digital asset market structure legislation in Congress, saying, “The Senate Banking Committee is in the process, as we should be, of considering market structure legislation for digital assets, for Bitcoin, for crypto. And it’s important because there’s an enormous amount of confusion out there. I remember when blockchain technology started, many of us do. Today, one in five Americans own cryptocurrency. Its growth has been nothing short of breathtaking. But as oftentimes happens when you have an innovation, it creates enormous confusion on the way that the subject of that innovation integrates with the federal government, and that’s the case here. Those who are in the cryptocurrency business and in the blockchain technology business don’t know who to talk to in the federal government. The Securities and Exchange Commission has announced, under President Biden, that it has jurisdiction over digital assets, and so did the Commodity Futures Trading Commission, the CFTC. And there’s been a lot of litigation, and there have been a lot of court cases, and it’s been enormously confusing. Those in the crypto business understandably have the reaction, ‘Look, we don’t mind being regulated. We have nothing to hide, but we’d like to know who to talk to. Is it the CFTC? Is it the SEC? What do we do?’ That’s why we need legislation. That’s why we need market structure legislation. Not because the government needs to stick its nose in everything, but because there has to be some certainty here. Clearly, there’s a turf war between the CFTC and the SEC, and it’s Congress’s role to delineate who has jurisdiction over what... We need to hold hearings. This is a complicated piece of legislation. I’ve spent a lot of time on it, and it’s one of the most complicated pieces of legislation I’ve ever seen. This is just one person’s opinion as a member of Banking: I think it’s going to take at least two hearings for us to be able to understand the pros and the cons of this legislation and understand the legislation itself…These are not issues that you raise and solve over a weekend. But I wanted to start talking about this bill, Mr. President, because it’s one of the most important pieces of legislation that this body will consider. It may not be the sexiest, it may not be the most interesting for some, but when one in five Americans own cryptocurrency, it’s certainly important. So, I will probably be talking about this issue several more times on this floor, but as the Senate moves forward with our digital assets market structure legislation, I hope we’ll move it quickly, but I hope we’ll move deliberately. I hope we’ll take the time to hold the hearings and, again, I think it’s going to take more than one hearing to address these weighty topics—and then additional time, once we get a bill, to mark it up, as we say, to amend it and make sure that we do the job for the American people.” (Press release)
Sen. Thom Tillis (R-NC) said, “I’ll be shocked if we make much progress in the crypto space [this Congress], because it’s become a political lightning rod.” (Semafor)
Sen. Cynthia Lummis (R-WY) said at the SALT Wyoming Blockchain Symposium that she expects a market structure bill to become law “before the end of the year — hopefully before Thanksgiving.” (Bitcoin Magazine)
Rep. Bryan Steil (R-WI) posted “US leadership in digital assets shouldn’t be a partisan issue. It’s time for the Senate to pass CLARITY.”
House Committee on Agriculture posted “It’s undeniable that momentum is building to finally bring certainty to the digital asset space. The CLARITY Act is a big step toward a commonsense framework that fosters innovation instead of stifling it.”
Senate Democrats / Industry Executives Meeting
Sen. Ruben Gallego (D-Ariz.) reportedly said to executives in the meeting, “Don’t be an arm of the Republican Party. They used you all and your megaphones to fuck us.” (Punchbowl)
Sen. Cynthia Lummis (R-WY) said, “We didn’t hear from either side that we don’t want to get to yes.” (Punchbowl)
Lummis posted “Had a productive day focused on market structure and how we keep the momentum going to get it across the finish line by the end of this year. I look forward to working with all my colleagues to bring this critical digital asset legislation to POTUS’ desk.”
Rep. Haley Stevens (D-MI) posted, “Happy to hear about positive bipartisan movement in the Senate to create clear rules of the road for digital assets and hold bad actors accountable. Crypto is not a Republican or Democratic issue, it’s about securing American innovation.”
President Donald Trump Pardon of Binance Founder Changpeng Zhao
Senate Banking, Housing, and Urban Affairs Committee Ranking Member Elizabeth Warren (D-MA) issued a statement saying, “First, Changpeng Zhao pleaded guilty to a criminal money laundering charge. Then he boosted one of Donald Trump’s crypto ventures and lobbied for a pardon. Today, Donald Trump did his part and pardoned him. If Congress does not stop this kind of corruption in pending market structure legislation, it owns this lawlessness.”
House Financial Services Committee Ranking Member Maxine Waters (D-CA) released a statement, saying, “As the government remains shut down, federal workers go without pay, and Americans watch their health care costs skyrocket, Donald Trump continues to show no interest in negotiating with Democrats to reopen the government and relieve the pain Americans are feeling. Instead, Trump is doing massive favors for crypto criminals who have helped line his pockets. Trump’s pardon of Binance founder Changpeng Zhao—who pleaded guilty to enabling money laundering and facilitating suspicious transactions with child abusers, drug dealers, and terrorists—is an appalling but unsurprising reflection of his presidency: one defined by corruption, self-interest, and loyalty to criminals over working-class American families. Let’s be clear about why this happened. CZ has spent months lobbying Trump and his family while funneling billions into Trump’s personal crypto company, World Liberty Financial. The pardon was the payoff and a blatant example of the kind of pay-to-play corruption that Trump and his Administration continue to engage in. Taken together, the Administration’s actions effectively legitimize the crypto crime CZ was convicted of, giving him the green light to continue operating his crypto platform with virtually no guardrails to protect the hard-earned funds of everyday investors. These actions are yet again proof that Trump is more than willing to allow crypto crime to flourish so long as it boosts his personal fortune.” (Press release)
Sen. Chris Van Hollen (D-MD) posted, “Trump pardoning the guy who helped boost his family’s crypto scheme is par for the course, but we can’t look away. He’s abusing his power again and again to enrich himself and his family. The most corrupt president in history — and it’s not even close.”
Sen. Jeanne Shaheen (D-NH) posted, “Binance processed billions worth of illicit finance, including from known terrorist organizations and drug traffickers. POTUS pardoning Binance’s CEO after the company boosted President Trump’s own crypto venture is a corrupt and blatant betrayal of American interests.”
Sen. Mazie Hirono (D-HI) posted, “Once again, the law doesn’t apply to you as long as you’re enriching the Trump family. Yesterday, Trump pardoned Changpeng Zhao, a convicted crypto CEO, after Zhao offered to boost the Trump family’s own crypto company. It’s pure corruption.”
Sen. Chris Murphy (D-CT) posted, “The White House is a 24/7 pay-to-play enterprise. The latest? Trump is pardoning Changpeng Zhao, who built a company that allowed terrorists and sex predators to launder money. Why? Because Zhao made a huge investment in Trump’s corrupt crypto business. Pay-to-play.”
Sen. Richard Blumenthal (D-CT) posted “Pardoning CZ rewards corruption. Money laundering & narcotics trafficking is condemnable, except if you’re a partner in Trump family’s corrupt crypto racket. It makes this Administration look like a RICO organized crime enterprise.”
Rep. Jim Clyburn (D-SC) posted, “Let’s recap Trump’s week: Demolished the East Wing of the White House—without any Congressional approval—to make room for a $300 million ballroom funded by wealthy donors. Pardoned a crypto company founder convicted of enabling crimes tied to terrorist groups and child exploitation, after the company helped boost Trump’s own cryptocurrency. Refused to meet with Democrats to end the government shutdown and save health care. In short: Trump spent the week busy helping himself—not helping you.”
Rep. Greg Casar (D-TX) posted “Trump’s crypto corruption is staggering. Congress must investigate and hold him accountable, and we must pass new rules of the road that prevent corrupt crypto deals in future.”
Rep. Chris Deluzio (D-PA) posted “The President just pardoned a convicted money launderer—Changpeng Zhao—who spent months pumping up the Trump family crypto business. Stinks like corruption to me”
Rep. Joe Morelle (D-NY) posted “Betraying your country to enrich yourself sounds like the work of tyrants like Putin, Marcos, or Maduro—the ranks of which Donald Trump is seemingly desperate to join. It’s disgraceful.”
Rep. Jerry Nadler (D-NY) posted “Binance CEO CZ allowed Hamas’ Al-Qassam Brigades and other terrorist groups to use his platform, pled guilty, and owed billions in fines. Then Trump pardoned him, just months after a $2 billion stablecoin deal between Binance and his family’s crypto venture. Trump is selling pardons to anyone who can personally profit him. It’s a shameful abuse of power and a mockery of justice.”
Rep. Mark Takano (D-CA) posted “Trump has turned his Administration into a pay to play system. Crypto bros, tobacco companies, and military contractors get to the front of the line since they have bankrolled Trump’s demolition of the East Wing to make space for his ballroom.”
Rep. Don Beyer (D-VA) posted, “Donald Trump and the Trump family’s self enrichment from crypto dealings are one of the worst corruption scandals in American history and this is one of the most blatant and corrupt acts in pursuit of those payouts that Trump has ever done. Trump is taking vast sums of money from foreign governments and corporate interests, and then giving them what they want. It’s some of the worst corruption this country has ever seen, and Congress absolutely has to investigate it. But Republicans keep turning a blind eye. This man’s company facilitated financing of terrorist organizations like Hamas, ISIS, and Al Qaeda, helped evade sanctions on Iran and North Korea, and enabled ransomware attackers. He put money in the pockets of the Trump family and Trump pardoned him.”
House Judiciary Dems posted “Trump just pardoned Binance founder Changpeng Zhao, whose online crypto exchange allowed Al Qaeda, Hamas, and ISIS, other terrorists, hackers, and vicious drug cartels to launder billions of dollars in criminal proceeds. Now that Zhao has helped Trump get filthy rich off his own crypto schemes, all these dangerous criminal deals are forgiven and Zhao is free to offend again. Another day in the Gangster State.”
Miscellaneous
House Financial Services Ranking Member Maxine Waters (D-CA) issued a statement on the October 10 flash crash in crypto markets, saying, “While crypto has recovered slightly, both average and institutional investors still suffered huge losses. This highlights the volatility in the crypto market that Ranking Member Waters has long warned about. These risks are only amplified as Trump and Republicans in Congress work to integrate crypto into the traditional financial system without first establishing the proper guardrails—increasing the likelihood of future crashes just like this one that could more rapidly spread to traditional finance.” (Press release)
Rep. Ilhan Omar (D-MN) posted “Trump loves to brag that he’s not taking a presidential salary. But let’s be honest, that’s pocket change compared to what he’s made using the presidency to enrich himself through crypto deals and now angling for millions in taxpayer dollars from a Justice Department he controls. It’s corruption in plain sight.”
Sen. Jim Justice (R-WV) posted “Honored to speak at the MARA Summit! We need Toby and Edith to jump on the Bitcoin train, then watch it spread like wildfire. The potential in crypto is off the charts!”
House Foreign Affairs Committee Democrats posted “Despite killing USAID + huge StateDept reorg/staff purge + corrupt crypto deals + Ukraine/Gaza + China trade war + bombing boats in the Caribbean—HFAC GOP has held just 4 oversight hearings w/ Trump officials this year Republicans dont even pretend to care about doing their jobs”
Rep. Nancy Mace (R-SC) posted “Outdated mortgage rules don’t belong in a digital economy. Our American Homeowner Crypto Modernization Act makes sure crypto investors can still chase the American Dream.”
Rep. Zach Nunn (R-IA) posted “The DOJ just cracked the biggest crypto scam in history, seizing $15B from fraudsters operating out of Cambodia. Our bipartisan GUARD Act would give local law enforcement the same tools the DOJ uses, increasing fraud protection in local communities.”
Sen. Tina Smith (D-OR) posted “The only people doing well right now seem to be AI executives, crypto bros and the Trump family.”
Sen. Elizabeth Warren (D-MA) posted “Americans lost over $240 million of their hard-earned savings to crypto ATM scams this year. The companies running these machines profit while doing little to stop it. We need rules that protect people, not profits and scammers.”
Warren also posted “We need rules in place to protect regular investors in crypto and private equity – not a shadowy system that lines the pockets of crypto billionaires and giant private equity firms. A downturn in these markets could put our whole economy at risk.”
Rep. Greg Casar (D-TX) posted “Trump gets $5 billion in corrupt crypto deals, a $400 million “palace in the sky”, millions in payouts from Amazon and Meta. But when Democrats demand affordable health care for working people? Republicans shut down the government.”
Sen. Sheldon Whitehouse (D-RI) posted “Trump is purposely driving up your electric bills to cater to his big crypto, AI, and fossil fuel donors — money from your pockets to theirs. He’s also driving up your homeowners insurance, hurting property values.”
Sen. Cynthia Lummis (R-WY) posted “Large banks have shown they’ll restrict access for political reasons, targeting industries & individuals they disagree with, including gun manufacturers, digital assets, churches, & even POTUS. I sent a letter to the CFPB expressing my strong support for the open banking rule. We cannot empower the opponents of digital assets to rewrite the rules in their favor, stifle innovation, and increase costs. Throwing up barriers would drive entrepreneurs overseas and weaken America’s leadership in financial technology.”
Lummis also posted “Another POTUS win and a victory for human rights, financial integrity, and American leadership. The seizure of 127,000 bitcoin underscores two urgent priorities for Congress: first, passing clear digital asset market structure legislation to ensure law enforcement can act decisively against bad actors while protecting innovation. Second, codifying how seized bitcoin is stored, returned to victims, and safeguarded for future generations. Turning criminal proceeds into assets that strengthen America’s Strategic Bitcoin Reserve shows how sound policy can turn wrongdoing into lasting national value.”
Zero One Strategies in the News
I had a great time talking with Eleanor Terrett, Jacquelyn Melinek, and Gerard Gallagher on Crypto in America Live. (Video)
I was quoted in Unchained, in an article by Jason Brett entitled, Landmark Crypto Bill Set to Take a Big Step in the Senate Despite Shutdown: “Optimistically, we’re at about eight out of ten,” said Stacey Rolland, founder and CEO of Zero One Strategies, a government relations firm focused on U.S. federal policy in emerging technologies. “Everybody who needs to be at the table is at the table. If you listen to the daily noise, it can sound like things are about to fall apart — but Democrats are still offering suggestions, Republicans are still engaging, and we’re nowhere near a shutdown-style impasse.” (Unchained)
Zero One Strategies appeared in:
What I’m Reading This Week
State of Crypto 2025: The Year Crypto Went Mainstream, Daren Matsuoka, Robert Hackett, Jeremy Zhang, Stephanie Zinn, and Eddy Lazzarin, a16z.