The recent election has ushered in a more favorable regulatory environment in the U.S. for the crypto industry, potentially rewriting its future. To explore what lies ahead, we spoke with Christopher O’Brien, founder and chair of Venable’s Blockchain and Digital Currencies Group, about how legal work in this area is shifting from enforcement defense to guiding companies through new business opportunities, and how Venable’s strategic presence in key crypto hubs—including its recent expansion into Miami, Florida— places the firm at the center of the industry’s evolving legal landscape.
Q: What has changed for crypto since the presidential election?
Chris: Crypto won the election. No doubt. There’s no question that a major shift is under way. We now have the most pro-crypto Congress in history. One of crypto’s biggest opponents in the Senate was unseated, and the president has become a crypto advocate, and even a crypto entrepreneur. So, we’re moving from an era where crypto operated under a constant cloud of regulation and enforcement to one where that cloud is starting to lift. Members of Congress are also predicting new legislation, so it’s not hard to see that the industry is on the cusp of major change in the U.S.
Q: How is the industry responding to all this change?
Chris: We’re moving out of crypto’s early phase—one defined by startups, regulatory uncertainty, and heavy enforcement. For a long time, companies didn’t have a clear path to compliance in the U.S., which pushed many entrepreneurs overseas. We saw criminal indictments, convictions, and major bankruptcies, which set off a domino effect in the industry. That phase is coming to an end. The focus now is establishing a clear regulatory framework, understanding how to comply, and then actually complying. Once that’s in place, we’ll likely see a wave of mergers and acquisitions. Wall Street institutions are showing more interest because they’re no longer walking into legal uncertainty—there’s less risk of inheriting a lawsuit or criminal liability. With that clarity, we’ll see more institutional players entering the crypto space, along with new projects and renewed investor interest.
Q: With these new circumstances, are we likely to see an end to enforcement actions from the Securities and Exchange Commission (SEC) and other agencies?
Chris: We’re seeing pro-crypto figures being appointed to key regulatory positions. The SEC is shifting, the acting chair of the Commodity Futures Trading Commission (CFTC) is pro-crypto, there’s a crypto czar in the White House, and multiple federal task forces are focused on bringing regulatory clarity to the industry—specifically in a way that supports growth. So, it’s virtually certain, and we’re already seeing signs of it, that the SEC and DOJ will start pulling back on many of their actions against players in the crypto space. That doesn’t mean crime and fraud enforcement will stop—those cases will continue. But many mainstream crypto companies will no longer face aggressive enforcement and will finally have a clear path to compliance under a new regulatory framework. The most basic changes we are likely to see are that a lot of crypto tokens will be defined as commodities, and only a minority will be seen as securities. Commodities are subject to light regulation in the everyday trading environment. So issuers and exchanges will likely not be required to comply with securities laws, but rather with commodities laws and probably crypto-specific laws.
Q: So now that there promises to be a more favorable regulatory environment, how do you see the industry evolving?
Chris: This is the moment of truth. Or at least one moment of truth. For a long time, the industry felt it couldn’t fulfill its potential because of government interference. Well, now the government is stepping back—so it’s time to deliver. Crypto has always had two sides, described by one commentator as the computer side and the casino side. The computer side is focused on solving real-world problems with blockchain technology. The casino side is about speculation—buying and selling digital currencies, meme coins, and other tokens to ride market momentum and make money on trades. This doesn’t mean that there aren’t many companies working to apply blockchain in meaningful ways. In fact, that’s where most venture capital funding has gone recently. The big question now is whether, in the next five years, we’ll see blockchain-based companies providing services that the public wants to use.
Q: How is Venable’s crypto practice responding to these new developments?
Chris: We’ve been in the crypto industry since before it was called “crypto”—way back in 2016 when almost no Am Law 100 firms were in the space—not quite at the dawn of crypto. I wasn’t advising Satoshi Nakamoto when he, she, or they sent Bitcoin into the world (or was I?). So we’ve been witness to all of the major changes. This one is exciting. Crypto isn’t a standalone practice group at Venable, but rather intersects with IP, fintech, litigation, regulatory enforcement, bankruptcy, tax, corporate transactions and securities, and real estate, among others. So, we approach it as part of a broader set of legal services cutting across multiple practice areas. Our work has run the gamut from entertainment transactions to SEC and DOJ investigations, bankruptcies, and even criminal defense. One day, a crypto client might need litigation support, the next, real estate advice, and the next, regulatory guidance. So, we work across these disciplines to meet the evolving needs of companies in the space.
Q: And finally, what regions are driving the industry’s growth today, and how can Venable support clients in these key markets?
Chris: Crypto is a global industry. But certain cities in the U.S. have become major hubs for its growth. New York and San Francisco have long been central to the industry, and Miami has emerged as an important player, attracting a high concentration of crypto companies despite the challenges of U.S. regulation. Our firm has been engaged in the crypto space for years, working with companies and investors across these geographies. With a strong foundation in New York and San Francisco, and our recent expansion into Florida, we are now even better positioned to support clients in key crypto hubs across the country.
Learn more about Venable’s Blockchain and Digital Currencies Practice.