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Weekly Blockchain Blog – May 12, 2025

2025 BHIPP - BakerHostetler IP Perspective

Make It Plain: Clarity Regarding Obviousness-Type Double Patenting

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In this issue:



<ul><li><a href="#President">President Biden Issues Executive Order Addressing Digital Assets</a></li><li><a href="#Banks">Banks Join USDF ‘Stablecoin’ Consortium, Pursue Crypto Custody Offerings</a></li><li><a href="#U.S.">U.S. Restaurants Adopt Crypto; Swiss City Calls Crypto ‘De Facto’ Legal Tender</a></li><li><a href="#Cryptocurrency">Cryptocurrency Sanctions Compliance Activity Spikes Following Russian Actions</a></li><li><a href="#SEC">SEC, CFTC and DOJ Bring Charges Alleging Cryptocurrency Fraud Schemes</a></li></ul>



President Biden Issues Executive Order Addressing Digital Assets



By <a href="https://www.bakerlaw.com/RobertAMusiala">Robert A. Musiala Jr.</a>



This week, President Joe Biden signed “Executive Order on Ensuring Responsible Development of Digital Assets” (EO). According to a fact sheet published with the EO, the EO calls for measures to accomplish the following objectives:



<ul><li>Protect U.S. consumers, investors and businesses.</li><li>Protect U.S. and global financial stability, and mitigate systemic risk.</li><li>Mitigate the illicit financial and national security risks posed by the illicit use of digital assets.</li><li>Promote U.S. leadership in technology and economic competitiveness to reinforce U.S. leadership in the global financial system.</li><li>Promote equitable access to safe and affordable financial services.</li><li>Support technological advances and ensure responsible development and use of digital assets.</li><li>Explore a U.S. central bank digital currency (CBDC).</li></ul>



Among other things, the EO orders various U.S. agencies and interagency groups to submit within 90, 180 or 210 days a number of reports addressing digital assets. The reports broadly address CBDCs, economic opportunities and risks of digital assets, and approaches to illicit activity involving digital assets. The EO orders specific reports on the following topics:



<ul><li>Implications of a U.S. CBDC.</li><li>Whether legislative changes would be necessary to issue a U.S. CBDC.</li><li>The technical infrastructure necessary to support a U.S. CBDC.</li><li>Implications of digital assets for U.S. consumers, investors and businesses and for equitable economic growth.</li><li>Financial stability risks and regulatory gaps posed by various types of digital assets and recommendations to address such risks.</li><li>A framework for interagency international engagement with foreign counterparts to enhance adoption of global principles and standards for how digital assets are used and transacted.</li><li>A framework for enhancing U.S. economic competitiveness in, and leveraging of, digital asset technologies.</li><li>The environmental impact of distributed ledger technology, including potential uses of blockchain for mitigating technologies.</li><li>The role of law enforcement agencies in detecting, investigating and prosecuting criminal activity related to digital assets.</li><li>Development of a coordinated action plan for mitigating illicit finance and national security risks related to digital assets, including measures to increase AML/CFT obligations.</li><li>Strengthening international law enforcement cooperation for detecting, investigating and prosecuting criminal activity related to digital assets.</li></ul>



The EO also provides definitions of the following terms: blockchain, central bank digital currency, cryptocurrencies, digital assets and stablecoins.



In a joint statement, the U.S. director of the National Economic Council and the U.S. national security advisor said the EO “identifies the Administration’s policy priorities, both for cryptocurrencies and any future U.S. central bank digital currency, to help guide the evolution of the digital asset ecosystem in a way that is consistent with our values.” Separately, in a Washington Post article published three days prior, the undersecretary for domestic finance at the Treasury Department addressed the risks of stablecoins. According to reports, the day before the EO was published, the U.S. Treasury Department launched “an initiative to raise awareness about the risks of investing in cryptocurrencies.”



For more information, please refer to the following links:



<ul><li><a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2022/03/09/executive-order-on-ensuring-responsible-development-of-digital-assets/">Executive Order on Ensuring Responsible Development of Digital Assets</a></li><li><a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/fact-sheet-president-biden-to-sign-executive-order-on-ensuring-responsible-innovation-in-digital-assets/">FACT SHEET: President Biden to Sign Executive Order on Ensuring Responsible Innovation in Digital Assets</a></li><li><a href="https://www.whitehouse.gov/briefing-room/statements-releases/2022/03/09/statement-by-nec-director-brian-deese-and-national-security-advisor-jake-sullivan-on-new-digital-assets-executive-order/">Statement by NEC Director Brian Deese and National Security Advisor Jake Sullivan on New Digital Assets Executive Order</a></li><li><a href="https://www.washingtonpost.com/opinions/2022/03/06/stablecoin-cryptocurrency-needs-congressional-regulation/">Opinion: ‘Stablecoins’ claim to be a safer cryptocurrency — but they’re far from risk-free</a></li><li><a href="https://www.reuters.com/article/usa-cryptocurrency-treasury-idCNL2N2VA292">U.S. Treasury launches campaign to educate public about crypto risks</a></li></ul>



Banks Join USDF ‘Stablecoin’ Consortium, Pursue Crypto Custody Offerings



By Alex Karambelas



Earlier this week, the USDF Consortium announced that three new banks have joined its stablecoin network only a month after the launch of the consortium. According to the announcement, the USDF Consortium is a “membership-based association of FDIC-insured banks” that is seeking “to build a network of banks and further the adoption and interoperability of a bank-minted tokenized deposit (USDF™), which will facilitate the compliant transfer of value on the blockchain.” With the addition of the three new banks, the consortium members now represent more than $200 billion in total assets, according to the announcement.



In another recent development, a global financial services firm announced a licensing agreement with a digital asset custody provider. According to a press release, the agreement will allow the financial services firm “to develop and, subject to receipt of regulatory and other approvals, launch an institutional grade digital custody offering where clients can store and settle their digital assets within a secure environment.” In a statement, a representative of the company said, “As institutional investors’ interest in digital assets continues to grow, we are building the financial infrastructure needed to support our clients’ allocations to this new asset class.”



In related news, this week a major cryptocurrency exchange announced that it will expand its global operations with the launch of a European affiliate. According to reports, the company received approval from Cypriot regulators and will begin offering products to customers in Europe. Separately, Binance, the world’s largest cryptocurrency exchange by volume, announced the launch of a new fiat-to-cryptocurrency payments provider, Bifinity. The new payment platform reportedly supports more than 50 cryptocurrencies and all major payment methods. In a statement, Bifinity’s president, Helen Hai, said, “With the launch of Bifinity, we aim to accelerate mass crypto adoption.”



For more information, please refer to the following links:



<ul><li><a href="https://www.usdfconsortium.com/_files/ugd/221e02_d6ef842fdcf347bcb711af07e82137bf.pdf">USDF Consortium Membership Grows Following Launch, Bringing More Access to Blockchain</a></li><li><a href="https://www.businesswire.com/news/home/20220309005564/en/State-Street-to-Develop-Digital-Custody-in-Collaboration-with-Copper.co">State Street to Develop Digital Custody in Collaboration with Copper.co</a></li><li><a href="https://newsroom.paypal-corp.com/2021-03-08-PayPal-to-Acquire-Curv">PayPal to Acquire Curv</a></li><li><a href="https://www.prnewswire.com/news-releases/ftx-continues-global-expansion-with-the-establishment-of-ftx-europe-301496387.html">FTX Continues Global Expansion with the Establishment of FTX Europe</a></li><li><a href="https://www.binance.com/en/blog/ecosystem/binance-launches-payments-technology-company-bifinity-421499824684903541">Binance Launches Payments Technology Company, Bifinity</a></li></ul>



U.S. Restaurants Adopt Crypto; Swiss City Calls Crypto ‘De Facto’ Legal Tender



By <a></a><a href="https://www.bakerlaw.com/VeronicaReynolds">Veronica Reynolds</a>



According to reports, a popular U.S.-based burger chain recently launched a marketing campaign offering customers bitcoin as a reward for restaurant purchases made via a third-party provider’s digital payments app and debit card. The campaign runs through March and provides customers 15 percent in the form of bitcoin back on purchases. In related news, another U.S.-based restaurant chain announced in a press release that it will give away 19,840 non-fungible tokens (NFTs), in part to commemorate its 1984 founding date. The NFTs, which are hosted on the Tezos blockchain, feature nine different pizza delivery hot bag designs and will be made available throughout early March.



In Switzerland, the city of Lugano reportedly has partnered with international stablecoin issuer Tether to relegate bitcoin, tether and the city’s own LVGA Points token as the city’s “de facto legal tender.” While many other Swiss municipalities already accept tax payments in the form of cryptocurrency, Lugano is the first Swiss locality aiming for all businesses to transact in cryptocurrency. And in Sweden, one of the world’s largest Bitcoin Network mining companies announced the launch of a new bitcoin mining data center. The project anticipates having 100 megawatts of power capacity by 2024, to be derived entirely from clean energy sources.



For more information, please refer to the following links:



<ul><li><a href="https://www.coindesk.com/business/2022/03/04/shake-shack-offering-bitcoin-rewards-for-customers-using-blocks-cash-app-report/">Shake Shack Offering Bitcoin Rewards for Customers Using Block’s Cash App</a></li><li><a href="https://www.prnewswire.com/news-releases/new-cheddar-range-with-a-side-of-nfts-301496562.html">NEW CHEDDAR RANGE WITH A SIDE OF NFTS</a></li><li><a href="https://www.coindesk.com/business/2022/03/03/swiss-city-of-lugano-to-make-bitcoin-and-tether-de-facto-legal-tender/">Swiss City of Lugano to Make Bitcoin and Tether ‘De Facto’ Legal Tender</a></li><li><a href="https://www.globenewswire.com/news-release/2022/03/03/2396787/0/en/Genesis-Digital-Asse%5b%E2%80%A6%5doin-Mining-Farm-in-Sweden-Powered-by-100-Clean-Energy.html">Genesis Digital Assets Announces New Bitcoin Mining Farm in Sweden Powered by 100% Clean Energy</a></li></ul>



Cryptocurrency Sanctions Compliance Activity Spikes Following Russian Actions



By <a href="https://www.bakerlaw.com/KeithRMurphy">Keith R. Murphy</a>



This week the U.S. Financial Crimes Enforcement Network (FinCEN) issued an alert advising increased vigilance by all financial institutions regarding efforts to evade sanctions and other U.S. restrictions that have been levied against Russia in the wake of that country’s actions in Ukraine. Among other things, the alert offers examples of “red flags” indicating potential evasion efforts. According to the press release, “While large-scale sanctions evasion using convertible virtual currency (CVC) by a government such as the Russian Federation is not necessarily practicable, CVC exchangers and administrators and other financial institutions may observe attempted or completed transactions tied to CVC wallets or other CVC activity associated with sanctioned Russian, Belarusian, and other affiliated persons. In addition, FinCEN reminds financial institutions of the dangers posed by Russian-related ransomware campaigns.”



According to reports, several cryptocurrency industry firms have responded by taking actions to prevent sanctions evasion. In one example, a major U.S. cryptocurrency exchange has reportedly blocked 25,000 cryptocurrency wallets believed to be linked to Russian entities and individuals allegedly involved in illegal activities, and it has shared the wallet addresses with the U.S. government in aid of sanctions enforcement. In another example, a popular Ethereum wallet provider and a related infrastructure firm made their wallet services unavailable in certain unidentified jurisdictions to deter sanctions evasion. The two entities released a joint blog post noting that the move was necessitated due to “legal compliance” and in response to recent sanctions directives from the United States and other jurisdictions.  



In a final example, a well-known non-fungible token (NFT) marketplace has reportedly deactivated accounts with Internet protocol addresses based in Iran. A representative said the marketplace “blocks users and territories on the U.S. sanctions list from using our services, including buying, selling or transferring NFT’s” and that if individuals are found to be in violation of the sanctions policy, swift action is taken to ban the offending accounts. 



For more information, please refer to the following links:



<ul><li><a href="https://www.fincen.gov/news/news-releases/fincen-provides-financial-institutions-red-flags-potential-russian-sanctions">FinCEN Provides Financial Institutions with Red Flags on Potential Russian Sanctions Evasion Attempts</a></li><li><a href="https://blockworks.co/coinbase-blocks-25000-accounts-linked-to-russia-to-support-sanctions/">Coinbase Blocks 25,000 Accounts Linked to Russia To ‘Support’ Sanctions</a></li><li><a href="https://www.coindesk.com/policy/2022/03/03/metamask-infura-block-certain-areas-amid-crypto-sanctions-fury/">MetaMask, Infura Block ‘Certain Areas’ Amid Crypto Sanctions Fury</a></li><li><a href="https://www.coindesk.com/policy/2022/03/03/opensea-bars-iranian-users-as-us-sanctions-talk-ramps-up/">OpenSea Bars Iranian Users as US Sanctions Talk Ramps Up</a></li></ul>



SEC, CFTC and DOJ Bring Charges Alleging Cryptocurrency Fraud Schemes



By <a href="https://www.bakerlaw.com/JoannaFWasick">Joanna F. Wasick</a> and <a href="https://www.bakerlaw.com/LaurenBass">Lauren Bass</a>



On Tuesday, the U.S. Securities and Exchange Commission (SEC) charged brother and sister John and JonAtina Barksdale with defrauding thousands of investors of more than $124 million through two unregistered fraudulent securities offerings of a digital token called “Ormeus Coin.” The siblings, described by the SEC as “modern-day snake-oil salesmen,” allegedly began selling the token on crypto trading platforms in 2017, and later sold it through subscription packages in a multilevel marketing business and promoted the sale on social media and in road shows held around the world. Among other things, the complaint alleges the defendants falsely claimed that Ormeus Coin was supported by one of the largest crypto mining operations in the world and arranged for a public website to display a wallet of an unrelated third party showing more than $190 million in assets, even though the Ormeus wallets were worth less than $500,000. The complaint also details how the Barksdales manipulated Ormeus Coin’s price and misused millions of dollars of investor funds for personal expenses.



Also on Tuesday, the Commodity Futures Trading Commission (CFTC) filed its own action against four defendants, charging them with operating a massive Ponzi scheme that defrauded investors of more than $44 million worth of bitcoin. According to the CFTC, the defendants operated a number of websites fraudulently soliciting investors, falsely promising them that professionals would trade their bitcoin and profits would be paid daily. Instead, the complaint states, the customers’ bitcoin were either misappropriated or otherwise used to make supposed profit payments to other earlier customers. A press release from the U.S. Department of Justice (DOJ) provided details on a parallel criminal action against three of the individuals. The DOJ charged the individuals with conspiracy to commit wire fraud, money laundering, conspiracy to obstruct justice, obstructing justice and tampering with evidence in connection with the fraud scheme.



A separate DOJ press release announced that the final of three co-founders of a major cryptocurrency derivatives exchange has pled guilty to violating the Bank Secrecy Act for the willful failure to establish, implement and maintain an anti-money laundering (AML) program. According to the press release, failure to implement and adhere to a proper AML program allowed the facilitation of money laundering on the exchange platform. The violations carry a maximum penalty of five years in prison.



For more information, please refer to the following links:



<ul><li><a href="https://www.sec.gov/news/press-release/2022-37?utm_medium=email&utm_source=govdelivery">SEC Charges Siblings in $124 Million Crypto Fraud Operation that included Misleading Roadshows, YouTube Videos</a></li><li><a href="https://www.cftc.gov/PressRoom/PressReleases/8498-22">CFTC Charges Four Operators for $44 Million Bitcoin Ponzi and Misappropriation Schemes</a></li><li><a href="https://www.justice.gov/usao-edny/pr/owners-and-operators-online-cryptocurrency-companies-indicted-defrauding-investors">Owners and Operators of Online Cryptocurrency Companies Indicted for Defrauding Investors</a></li><li><a href="https://www.justice.gov/usao-sdny/pr/third-founder-cryptocurrency-exchange-pleads-guilty-bank-secrecy-act-violations">Third Founder Of Cryptocurrency Exchange Pleads Guilty To Bank Secrecy Act Violations</a></li></ul>

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Keith R. Murphy

Joanna F. Wasick

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Lauren Bass

Chicago

Robert A. Musiala Jr.

Web3 and Digital Assets

Digital Assets and Data Management

Executive Order Addresses Digital Assets; Banks and Restaurants Launch Crypto Initiatives; FinCEN Issues Alert; SEC, CFTC and DOJ Bring Actions

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