Courts and regulators addressed crypto this week through several distinct legal frameworks. A federal judge declined to erase a settled CFTC enforcement case despite the agency's own change in policy. The Office of the Comptroller of the Currency documented banking restrictions affecting digital-asset businesses, and litigation over Illinois's unusual crypto transaction tax moved toward an expedited decision. In Europe, $USDC became the first e-money token classified as significant under the European Union's Markets in Crypto-Assets Regulation (MiCA). A major English asset-recovery proceeding also produced an important choice-of-law ruling concerning 61,000 seized bitcoin.

Federal Court Refuses to Vacate the CFTC's Gemini Settlement

On October 15, Judge Alvin Hellerstein of the U.S. District Court for the Southern District of New York denied a joint request by the Commodity Futures Trading Commission (CFTC) and Gemini Trust Company to vacate the consent order they entered in January 2025.

The CFTC first sued Gemini in 2022, alleging that the exchange made false or misleading statements during the agency's review of a proposed bitcoin futures contract. Gemini later agreed to pay a $5 million civil penalty and accept a permanent injunction. Earlier this year, however, the CFTC joined Gemini in seeking relief from the judgment after concluding that the case would not have been filed under the agency's current enforcement standards.

The court's October 15 order declined to reopen the judgment. Judge Hellerstein found that the parties had not satisfied the standards for post-judgment relief: the CFTC's revised policy position did not require vacatur, and Gemini had litigated the matter for more than three years before voluntarily settling shortly before trial. The $5 million penalty has already been paid, but the permanent injunction also remains in place. The text of the order is available in the court filing.

The decision has significance beyond Gemini. Because a consent order carries the force of a final court judgment, it can be reopened only under narrow post-judgment standards — a bar that a regulator's revised policy position alone could not satisfy here. A change in an agency's leadership or enforcement priorities therefore does not automatically unwind a final judicial order. Companies considering settlements should assess the enduring consequences of injunctive language, admissions, undertakings and collateral regulatory effects. An agency's later willingness to revisit a matter may not be enough if judicial approval is required.

OCC Review Finds Large Banks Restricted Digital-Asset Businesses

On October 14, the Office of the Comptroller of the Currency (OCC) released the results of its supervisory review of debanking practices at the nine largest national banks under its supervision. According to the OCC's report and accompanying announcement, all nine banks maintained policies between 2020 and September 2025 that could restrict financial services based on lawful business activities or other nonfinancial considerations. The agency specifically identified digital-asset issuers, exchanges and administrators among the industry sectors subject to restrictions.

The OCC attributed many of the problems to broad reputational-risk policies that lacked objective, risk-based standards. Its review covered approximately 50,000 documents totaling roughly 420,000 pages, along with nearly 100,000 complaints. The agency is now considering further changes to the regulatory and supervisory framework governing the largest banks.

The report does not itself create a new right to a bank account, nor does it prohibit banks from declining customers for legitimate financial-crime, credit or operational reasons. Banks must still manage sanctions, anti-money-laundering and other legal risks. The development is nevertheless important for crypto companies because it signals greater scrutiny of categorical exclusions and decisions that cannot be tied to documented risks.

Digital-asset businesses seeking banking relationships should be prepared to demonstrate their licensing position, transaction-monitoring controls, customer profile and approach to sanctions and fraud. Companies that lose banking services should also preserve communications identifying the bank's stated reasons, especially where those reasons appear unrelated to the company's actual risk profile.

Illinois Crypto Tax Litigation Moves Toward Expedited Resolution

On October 13, industry groups and the State of Illinois jointly asked the Circuit Court of Sangamon County to expedite two challenges to the state's Digital Asset Tax Act. The Act would impose a 0.2% tax on the value of specified digital-asset purchases and transfers. The pending lawsuits allege, among other things, violations of federal and state constitutional provisions and preemption by the federal Internet Tax Freedom Act. Those allegations have not yet been adjudicated.

According to the Crypto Council for Innovation's filing announcement, the parties proposed that opening summary-judgment motions — a procedural vehicle that can resolve a case on its legal merits without a trial — be filed on November 4, with briefing completed by January 22, 2027, a hearing in February and a decision by March 1. The proposed schedule still requires court approval. Enforcement of the tax has separately been stayed until July 1, 2027.

The development is procedural rather than a ruling on the tax's legality. Even so, the stay provides additional preparation time, and the requested schedule could produce a merits decision before the revised effective date. Exchanges, brokers and other businesses with customers should not treat the delay as invalidation of the law. They should continue evaluating whether the Act would cover their transactions, who would be responsible for collection and how their systems would calculate the tax if the challenges fail.

EBA Designates $USDC as the EU's First Significant E-Money Token

On October 14, the European Banking Authority (EBA) classified $USDC as the first "significant" e-money token under the Markets in Crypto-Assets Regulation. Under MiCA's framework, stablecoins that reference a single official currency fall into the e-money token category, distinct from asset-referenced tokens. According to the EBA's announcement, 45 e-money tokens have been notified under MiCA, but $USDC is the first to meet the applicable significance criteria. $USDC is issued in the European Union by Circle Internet Financial Europe SAS.

Beginning November 12, $USDC will be subject to MiCA's dual-supervision model for significant e-money tokens. The EBA will assume direct responsibility for areas including own funds, reserve assets, liquidity requirements, and recovery and redemption planning. France's Autorité de Contrôle Prudentiel et de Résolution will retain responsibility for governance, outsourcing, qualifying holdings, conflicts of interest and fitness assessments.

The designation is materially different from last week's opinion by the European Securities and Markets Authority (ESMA) concerning stablecoins that do not comply with MiCA. The EBA's decision does not identify $USDC as noncompliant. Instead, it subjects $USDC to heightened supervision because of its scale and importance.

The classification matters beyond Circle. Exchanges, custodians and payment businesses using $USDC should expect more formalized supervisory coordination and potentially more detailed operational requests concerning reserve, redemption and liquidity arrangements. Other stablecoin issuers approaching the significance thresholds should study the allocation of responsibilities between the EBA and their national regulators.

English Court Applies Chinese Law to Claims Over 61,000 Seized Bitcoin

On October 12, the High Court in London ruled that Chinese law governs fraud victims' ownership claims to approximately 61,000 bitcoin seized by British authorities. The cryptocurrency is connected to Zhimin Qian, who was convicted following a large investment fraud conducted in China. The victims argued that English property law should govern because the bitcoin is held in the United Kingdom. Mr. Justice Mark Turner instead concluded that Chinese law applies because the alleged misrepresentations, transfers of money, contractual relationships and immediate economic losses occurred in China.

The ruling does not decide who ultimately owns the bitcoin. The claimants must now establish relevant property rights under Chinese law and show that those rights satisfy the United Kingdom's requirements for returning seized criminal property. A further hearing is expected, and the claimants have indicated that they intend to appeal.

For cross-border crypto asset recovery, the decision underscores that the physical or technical location of seized assets may not determine the law governing competing ownership claims. Courts may instead focus on where the underlying fraud, payment and economic loss occurred. Victims pursuing recovery should develop their choice-of-law analysis early and obtain appropriate foreign-law evidence rather than assuming that seizure in a favorable jurisdiction will determine ownership.

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