Blockchain+ Update — End Of A Shutdown And The Beginning Of An Era

The government shutdown of the last month and a half stopped a lot of the momentum that had been developing dead in its tracks. There was no movement on market structure with Congress, little ability for regulatory agencies to issue guidance, no ability for the SEC to review registration statements for products and little ability to fill longstanding vacancies that need to be filled to drive progress. While there were not many developments during the shutdown, the end of the shutdown appears to have kicked off additional activity that might still result in significant progress through the end of the year.

Detailed breakdowns of these developments, their implications for businesses going forward and a few other updates on crypto-law topics are discussed below.

Mike Selig Nominated for CFTC Chair: October 25, 2025

Background: Mike Selig has been nominated for CFTC Chair. Most recently, Selig has been the Chief Counsel of the SEC Crypto Task Force. The nomination comes after the nomination of Brian Quintenz was pulled, reportedly due to complaints by certain leaders in the crypto ecosystem.

Analysis: This about as pro-crypto as a nominee could have been. It will be interesting to see the direction he takes the CFTC, particularly in the absence of comprehensive market structure regulation. Unlike Quintenz's nomination that was repeatedly delayed, the Senate Agriculture Committee moved quickly to set a confirmation hearing.

SEC Chair Teases Taxonomy: November 12, 2025

Background: SEC Chair Atkins gave a landmark speech that seems to be breaking the ground for a more comprehensive overhaul of how securities laws apply to digital assets. First, he clarified the rather commonsense notion that something that was once the subject of an investment contract – orange groves, beavers or cattle embryos to name a few – can cease to be subject to an investment contract as circumstances change. Second, he proposed a taxonomy for digital assets that would be divided into (1) digital commodities (or network tokens) that derive their value from the operation of a crypto platform or network, (2) digital collectibles that represent or convey rights in things, (3) digital tools that perform a function such as verifying identity and (4) tokenized securities, which would be securities. Only the last category would be regulated by the SEC. Third, he laid out what the SEC's expected approach would be to digital asset regulations.

Analysis: While this is significant progress, it still leaves open a number of major questions that hopefully will be answered in the upcoming months and years. Does the SEC believe a token itself can inherently be or not be a security, rather than being a piece of code that may or may not be associated with a set of rights? Will the agency continue with the "embodiment theory" of tokens that seemed to have been largely rejected by the courts in the later stages of the SEC's earlier crusade against participants in the digital assets ecosystem? Should there be broad buckets of asset classes where people are developing instruments utilizing new technologies that defy classification? If a tokenized security is just a thing that would have been a security if not tokenized and we're still relying on the Howey test, have we necessarily moved beyond the morass in large part created by the SEC of the prior six years? This contrasts somewhat with our own proposal submitted on behalf of The Digital Chamber that proposed much narrower categories and a somewhat more fluid approach, though a lot of the principles still align.

Briefly Noted:

Government Back Up and Running: After 43 days, the federal government got its act together for just long enough to end the longest government shutdown in US history. Most regulatory agencies were operating on a skeleton crew, so this also means agencies developed a backlog on normal procedures to get government approvals or reviews for things like registration statements. The SEC came out with this handy dandy FAQ on how to handle certain things that did or didn't move forward during the shutdown.

SEC Releases Exam Priorities: The SEC's Division of Examinations, which examines broker-dealers, investment advisers and certain other registered intermediaries, released its annual list of exam priorities. For the first time since the Hinman Speech, digital assets are not one of the enumerated exam priorities, although there is a more general priority regarding the use of emerging financial technologies.

IRS Releases Staking Guidance for ETFs: A new revenue procedure released by the IRS established a safe harbor for "investment trusts" and "grantor trusts" under tax law to be able to stake cryptoassets without jeopardizing their special tax status.

Market Structure Keeps Moving: The Senate Agriculture Committee released a discussion draft that included a lot of placeholders, including an entire "seeking further feedback" section for decentralized finance. The Brookings Institute proposed a merger of the SEC and CFTC to best regulate crypto. Nothing has moved on the House side with respect to the Clarity Act that it passed that does not closely resemble the discussion drafts coming out of the Senate. While Sen. Tim Scott has stated they're targeting a vote on a market structure bill before the end of the year, it's hard to see how this would come together so quickly when lawmakers appear to still be so far apart.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.