Executive Summary

2025 has introduced a nuanced and evolving regulatory landscape for digital assets. While the current administration has signaled a more accommodative stance, most notably through Executive Order 14178, uncertainty persists. The SEC continues to lean on legacy statutes, case-by-case enforcement, and informal guidance, leaving investment advisers and broker-dealers to navigate a still-unsettled environment. Chief compliance officers are left with a responsibility to reconcile recent policy developments with real-world compliance expectations, requiring a defensible, principles-based path forward.

Policy Evolution Under Executive Order 14178

Issued in January 2025, Executive Order 14178 marked a policy pivot. It repealed earlier directives promoting a central bank digital currency (CBDC) and established the Presidential Working Group on Digital Asset Markets. The group’s July 2025 report advanced the following priorities:

A formal legislative framework to delineate jurisdiction between the SEC and CFTC, e.g., via the proposed Clarity Act;
Stablecoin oversight through the GENIUS Act;
Expanded regulatory support for tokenization, decentralized finance (DeFi), and self-custody;
Enhanced interagency coordination on anti-money laundering (AML) and digital asset enforcement; and
While this shift reflects a more structured approach to digital engagement, the recommendations largely affirm existing market expectations rather than transform the regulatory landscape.

SEC Activity: Project Crypto and Enforcement Realities

In July 2025, the SEC launched Project Crypto, an initiative aimed at modernizing regulatory infrastructure for tokenized assets and supporting digital-native securities. At the same time, the creation of the SEC’s Digital Assets Task Force, led by Commissioner Hester Peirce, suggests incremental movement toward formal rulemaking.

Nonetheless, enforcement remains active. The dismissal of charges against Coinbase and the paused litigation against Binance signal a strategic shift, not a retreat. Enforcement continues, particularly around fraud, disclosure failures, and misleading practices in digital offerings – all bread and butter deficiencies for the SEC generally, regardless of asset class.

For RIAs and broker-dealers, regulatory expectations surrounding custody, disclosure, and fiduciary responsibility remain unchanged. Digital assets are a named priority in the SEC’s 2025 Examination Priorities, though its place on the 2026 priority list remains to be seen. The Division of Corporation Finance reaffirmed the continued use of the Framework for “Investment Contract” Analysis of Digital Assets as the Commission’s primary interpretive tool.

Practical Compliance for RIAs and Broker-Dealers

At Compliance Risk Concepts (CRC), we advocate for a principles-based approach grounded in three core pillars:

1. Function Over Form

Apply the Howey test rigorously to assess whether a digital asset constitutes a security
Document exemption determinations with the same diligence used for traditional alternative investments

2. Integration Into Existing Frameworks

Apply Rule 206(4)-2 custody standards to digital holdings
Use qualified custodians wherever possible; implement heightened controls where unavailable
Extend Code of Ethics, personal trading rules, and supervisory oversight to cover crypto exposure

3. Clear, Comprehensive Disclosure

Ensure disclosures in Form ADV, Form CRS, and marketing materials explicitly address digital asset risks, liquidity concerns, operational complexity, and conflicts
Avoid promotional or vague language, particularly when marketing to retail investors

Recent Staff Guidance: Implications for Digital Products

The SEC’s July 2025 staff guidance on crypto-linked ETFs emphasizes the importance of plain-language, risk-forward disclosures. While focused on fund issuers, the same principles apply across product types. Key areas of emphasis include:

Clarity around asset rights (e.g., forks, airdrops)
Detailed pricing and valuation methodologies
Operational risks and potential dilution mechanisms

The takeaway: novelty does not excuse opacity. Transparency remains the baseline compliance expectation.

Reading the Tea Leaves

Strategic Signals and What Comes Next

The administration’s endorsement of tokenization and its creation of a Strategic Bitcoin Reserve underscore a long-term vision that includes digital assets as part of national financial infrastructure. However, policy momentum has not yet translated into regulatory certainty.

Until comprehensive rulemaking is enacted, firms remain bound by legacy securities laws. While the tone may have shifted, the legal foundation persists. Digital assets should not be treated not as experimental sidecars, but as integrated components within fiduciary and supervisory frameworks.

Support for a Changing Digital Asset Landscape

As the digital asset ecosystem continues to mature, CRC will continue supporting clients with:

Howey analysis and classification of tokens;
Integration of crypto exposure into custody, trading, and supervisory programs;
Development of bespoke disclosures and investor education materials;
Design and documentation of enhanced controls where qualified custody is not feasible;
Training and testing programs that align crypto oversight with the firm’s overall risk profile.

CRC’s philosophy is that responsible engagement with digital assets is possible, but it must be grounded in current law, executed with internal discipline, and responsive to evolving regulatory tone. As regulatory clarity remains a work in progress, a disciplined, compliance-first approach remains the most defensible strategy. In this environment, compliance is not just a backstop, it is the bridge between innovation and responsibility.

The SEC has made its expectations plain, if not formal: innovation is not an excuse for regulatory evasion. While the political rhetoric surrounding digital assets may ebb and flow, the compliance obligations for RIAs and BDs remain rooted in longstanding law. Treating digital assets as a discrete category outside the firm’s standard compliance posture is likely both a strategic and regulatory mistake.

The theme of regulatory compliance thus far in 2025 has been flexibility, observation, and course correction. By considering these principles and embedding digital assets into the firm’s core governance structure and documenting decisions with rigor and transparency, RIAs and BDs can engage responsibly today, while remaining positioned to adapt to what comes next.