K&L Client Alert Highlights Developments in Crypto Space

At the end of January, K&L Gates released a client alert detailing recent regulatory actions in the cryptocurrency and digital assets space as well as a primer on the initiatives that will take center stage in 2026. The alert notes that the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will work together to facilitate access to digital assets.

One area proven to be a roadblock for some industry participants is custody. The alert notes that the SEC has taken several steps to ease that burden including issuing guidance to “clarify SEC custody rules by allowing state trust companies to hold digital assets subject to certain conditions and confirming when broker-dealers can hold digital assets.” The SEC’s Division of Investment Management issued a no-action letter permitting the treatment of a state-chartered trust company as a bank for purposes of holding digital assets and effecting transactions in digital assets. And following that, the Division of Trading and Markets issued a statement clarifying when broker-dealers themselves may hold digital asset securities. The CFTC has also been paving the way for reducing the regulatory constraints around crypto including announcing that spot digital assets were available for trading by a CFTC-registered exchange. Both the CFTC and SEC are also focused on tokenization and have issued several agency level actions easing the burden in this space.

In addition, with the passage of the GENIUS Act last year, Treasury, the Office of the Comptroller of the Currency (OCC), and other relevant federal agencies will likely put forth rulemaking proposals to speed implementation of the signed legislation. A comprehensive package on cryptocurrency remains somewhat elusive in Congress. The U.S. House of Representatives passed the CLARITY Act in 2025, but the Senate remains divided on a bipartisan approach forward. Both the Senate Banking Committee and Senate Agriculture Committee are working on proposals, both differ from the House-passed CLARITY Act.

Click here to read the full client alert from K&L Gates.