Cryptocurrency

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On July 28, 2026, New York Attorney General (AG) Letitia James submitted written testimony in connection with the pending federal Clarity Act, which aims to regulate the crypto market. In her testimony, she urged federal lawmakers to amend the Clarity Act to preserve the authority of the states to protect consumers, prosecute fraud, and hold government officials accountable for profiting from unlawful crypto-related activities. Her testimony came as the subcommittee’s ranking member, Senator Richard Blumenthal (D-Conn.), convened a public hearing examining alleged gaps in the bill, with particular focus on its ethics and enforcement provisions.

In this episode of Payments Pros, host Carlin McCrory is joined by Marissa Tartarini of Elliott Davis to explore how banks can build sustainable, scalable fintech partnerships in a shifting regulatory environment. They begin with the foundational risk questions banks should ask before choosing a partner — speed to market, in-house expertise and gaps, strategic fit, and risk appetite — then turn to practical legal and compliance considerations, including staffing, board oversight, and the need for tailored partnership agreements. Marissa and Carlin discuss the challenges of managing multiple fintech programs at once, maintaining up-to-date policies and marketing, and ensuring that growth does not outpace governance and BSA/AML controls. They highlight what separates successful programs from those that fail, lessons from terminated partnerships, and how to prepare for increasingly technical regulatory exams. Carlin and Marissa close the episode with a look at how regulators’ and banks’ views of fintech partnerships have evolved and what that means for the future of bank-fintech collaboration.

On March 11, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) signed a memorandum of understanding (MOU) that both agencies describe as “historic.” The MOU is intended to reset the relationship between the agencies by reducing turf battles, avoiding duplicative regulation, and providing clearer, technology-neutral oversight — particularly in markets where securities and derivatives regimes overlap, including crypto. While it does not change either agency’s statutory authority, it creates a formal framework for coordination that will materially affect how policy, examinations, and enforcement play out in practice.

On January 6, South Dakota Attorney General (AG) Marty Jackley announced a package of proposed legislation to modernize various aspects of the state’s criminal statutes. Among the proposals is a bill that would expressly authorize law enforcement to seize cryptocurrency as part of a criminal investigation. The measure reflects a growing concern that digital currency occupies a central role in much criminal activity and that legislation may be necessary in some jurisdictions to address those concerns.

The Federal Trade Commission (FTC) announced a proposed consent order with Illusory Systems Inc. (Illusory), a Utah-based blockchain infrastructure company that operates the Nomad Token Bridge. The settlement resolves the FTC’s allegations that Illusory failed to live up to its stated data security commitments, leading to a 2022 cyberattack in which hackers stole approximately $186 million in crypto assets from platform users. Under the proposed order, Illusory must return to consumers any recovered funds and implement enhanced information security measures.

On October 20, a coalition of 21 state attorneys general (AG), led by Iowa AG Brenna Bird, submitted a letter to Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce in response to her February statement titled “There Must Be Some Way Out of Here.” Peirce’s statement invited public input to assist the SEC’s Crypto Task Force with clarifying regulatory approaches for digital assets. The letter from the AGs addressed the pivotal question of establishing a regulatory structure that balances clarity with the protection of state authority and consumer interests.

On June 25, the California Department of Financial Protection and Innovation (DFPI) entered a consent order with Coinme, Inc., a cryptocurrency “ATM” operator, for noncompliance with the California’s Consumer Financial Protection Law (CCFPL) and Digital Financial Assets Law (DFAL). The consent order marks a significant milestone in California’s regulatory efforts because it represents the conclusion of the agency’s first enforcement action under the DFAL.

On March 24, cryptocurrency investment firm Galaxy Digital Holdings (Galaxy) entered into an assurance of discontinuance (AOD) with New York Attorney General (AG) Letitia James to resolve allegations that Galaxy engaged in misrepresentations when it promoted the failed algorithmic cryptocurrency Luna from 2020 to 2022.

Recent actions by the Pennsylvania and Iowa state attorneys general (AG) suggest increasing regulatory scrutiny of bitcoin transaction machines (BTMs) in connection with the role they allegedly play in facilitating scams. In Pennsylvania, AG David Sunday issued a consumer alert, warning Pennsylvanians that scammers are using BTMs to gain access to their money. In Iowa, AG Brenna Bird brought two lawsuits against Bitcoin Depot and CoinFlip, Iowa’s two largest BTM operators, over alleged collection of illegal fees and failures that allowed Iowans to send millions of dollars to scammers through their kiosks.