The Federal Reserve (Fed) announced it will shut down its program with additional scrutiny over crypto and fintech activities.

On an August 15 statement, the central bank said it will sunset the Novel Activities Supervision Program and return to monitoring banks’ crypto and fintech activities through standard supervisory processes.

The Fed established the specialized program in August 2023 to enhance oversight of banking organizations engaging in crypto activities, distributed ledger technology projects, and complex technology partnerships with non-banks. 

The program targeted activities that regulators deemed novel and potentially risky to financial stability.

The Fed stated:

“Since the Board started its program to supervise certain crypto and fintech activities in banks, the Board has strengthened its understanding of those activities, related risks, and bank risk management practices.”

The regulator will integrate knowledge gained from the program into standard supervisory processes while rescinding the 2023 supervisory letter that created the initiative.

The program’s dissolution follows several pro-cryptocurrency moves by federal regulators this year. 

The Federal Reserve Board removed reputational risk from its bank supervision program on June 23, ordering staff to strike the term from examination manuals and concentrate on measurable financial exposures.

The Fed’s move positions the central bank alongside the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, which made similar changes this year. 

The coordinated revisions eliminate a subjective standard that experts said allowed examiners to block banking services to crypto firms and prevented banks from offering basic crypto-related services.

Furthermore, the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corporation released a joint statement explaining how existing banking rules apply when institutions custody crypto for customers. 

The guidance describes safekeeping as holding digital assets on clients’ behalf while stressing that it does not create new supervisory demands.

Regulators instructed boards and executives to view crypto custody as a service that relies on exclusive control of private keys and other sensitive data, requiring banks to prove no other party can unilaterally move assets once they enter custody.

Fed Chair Jerome Powell laid the groundwork for the regulatory shift in an April 16 speech. In it, he urged Congress to establish a stablecoin framework and stated that the Fed does not intend to limit lawful relationships between banks and crypto firms. 

Powell acknowledged that regulators adopted a conservative stance after the 2022 market failures but indicated that some guidance may be relaxed to accommodate responsible innovation.

The program’s end represents a broader normalization of crypto banking supervision as regulators gain confidence in their understanding of digital asset risks and develop clearer frameworks for institutional participation in crypto markets.

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Ripple Labs has urged the US Senate to revise its proposed crypto legislation, warning that the current draft introduces more confusion than clarity.

The blockchain firm submitted its response on Aug. 5, addressing concerns about regulatory overreach and vague definitions that could stifle innovation across the digital asset space.

The comments come in response to the Senate’s call for feedback on the draft of the Responsible Financial Innovation Act of 2025, which was released on July 22.

The bill aims to modernize crypto oversight by expanding regulatory tools, improving consumer protections, and providing clearer classification rules for digital assets.

Ripple highlight concerns

One of Ripple’s key concerns is the bill’s treatment of “ancillary assets,” a vague term that could place many digital tokens under SEC jurisdiction.

The company warns that this could lead future SEC leadership to interpret the regulations loosely, potentially enforcing policies that undermine the growth of the crypto space.

According to the firm:

“This approach could subject long-established, widely traded tokens operating on open and permissionless networks, including ETH, SOL, and XRP, to perpetual SEC oversight, even when current or future transactions bear none of the hallmarks of a securities offering.”

Moreover, Ripple emphasized that assets tied to past investment contracts should not be perpetually subject to SEC jurisdiction.

The company argues that the SEC’s authority should be limited to the specific transaction in question, not extended to future trades of the asset.

The firm noted:

“The approach taken by the draft provides a backdoor to assert jurisdiction over present-day transactions based on conduct that is either irrelevant to the transaction at issue or barred from enforcement by fundamental legal protections.”

Considering this, Ripple proposed a fixed time period for SEC jurisdiction over tokens initially sold as part of an investment contract.

The company also called for Congress to clarify the application of the Howey Test, a standard used to determine whether an asset is a security, ensuring it is consistently applied without leaving room for subjective interpretations that could destabilize the market.

It added:

“If Congress intends to codify the Howey test, it should do so in a way that prevents misuse or manipulation by the SEC.”

Calls for legal clarity

In addition to concerns over SEC powers, Ripple urged lawmakers to provide clear guidelines on which blockchain activities, such as staking, mining, and governance, should be regulated as securities.

The company argued that uncertainty surrounding these activities could discourage innovation and hinder the broader adoption of blockchain technologies.

It stated:

“To avoid misapplication of the Howey test, it should be explicitly stated that ‘entrepreneurial or managerial efforts’ do not include core network functions or routine administrative services.”

Meanwhile, Ripple also supported a provision in the bill aimed at protecting tokens actively traded for at least five years, suggesting it could offer protection from retroactive enforcement.

The RLUSD issuer believes this would provide more predictability and stability for established digital assets while helping the industry move forward confidently.

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Representatives from multiple universities met with the US Securities and Exchange Commission’s (SEC) Crypto Task Force on June 23 to discuss a staking rulebook.

The meeting included representatives from the University of California, Berkeley School of Law, Georgetown University Law Center, the University of Chicago Law School, and venture firm Placeholder.

According to the logs, the discussions focused on narrow definitions, economic guardrails, and open-source requirements when it comes to staking digital assets.

Mutual-funds approach

The delegation worked under the Blockchain and Law at Berkeley (BLAB) banner and requested that the SEC certify the term “staking” only for products that perform protocol-level validation and require pre-approval of any retail marketing that uses the label. 

They compared the approach to the mutual-fund “80% names rule,” arguing that precise terminology would stop custodial yield programs from masquerading as core network staking. 

Furthermore, the group proposed capping published yields at a protocol’s base reward rate and limiting intermediary fees to 5% of those rewards to curb aggressive advertising. However, providers could boost fees if they can justify higher charges with auditable cost data.

The BLAB also recommended standardized, on-interface disclosures of gross network yield, net customer payout, and slashing liability so that users see real-time risk and fee data inside wallets and explorers. 

The meeting followed a May 29 staff bulletin in which the SEC’s Division of Corporation Finance said that self-staking, delegated staking, and most non-custodial services do not trigger securities registration requirements.

Industry participants view the exemption as a springboard rather than a finish line. Exchange-traded fund (ETF) advocates note that the Internal Revenue Service still must decide how grantor-trust structures can distribute staking rewards.

Transparency beyond exemption

Against that policy backdrop, the universities told SEC staff that disclosure alone cannot manage concentrated validator power or hidden rehypothecation loops in liquid-staking and restaking protocols. 

They asked the agency to mandate public dashboards that display validator influence, uptime, censorship behavior, and jurisdictional exposure, as well as an open-source requirement for any client software that interacts with consensus. 

The presenters further recommended licensing thresholds for entities that control a material share of network stake, mirroring bank-style oversight for dominant validators. They argued that the combination of slashing, live data, and licensing would “close the gap between on-chain enforcement and real-world accountability,” according to the meeting memo.

The SEC took the suggestions under advisement, leaving academic proponents and industry stakeholders to await further guidance on whether staking’s new regulatory safe harbor will expand into a codified framework.

Journalist

Hassan Shittu

Journalist

Hassan Shittu

About Author

Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in…

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June 24, 2025

Turkey’s Ministry of Treasury and Finance is tightening regulations on crypto asset service providers in a bid to clamp down on illicit financial activities. According to the Ministry, digital asset platforms must now collect and verify more detailed information about user transactions.

This information includes obtaining a written explanation of at least 20 characters describing the purpose of each transfer, along with verifying the origin of funds involved.

Per AA, the government believes this measure will enhance transparency and help identify suspicious activity earlier in the transaction process.

Turkey Impose Withdrawal Restrictions to Disrupt Illicit Flows

In a major shift, the new regulation imposes a delay on crypto asset withdrawals. Any crypto purchased, exchanged, or deposited will be subject to a 48-hour waiting period before it can be withdrawn.

For new users making their first withdrawal, the waiting period will extend to a minimum of 72 hours. Authorities believe these delays will reduce the ability of criminal actors to quickly transfer illicit funds outside the system before they are detected or blocked.

Stablecoins are also under scrutiny in the new regulatory framework. The Ministry will impose a daily transfer cap of $3,000 and a monthly limit of $50,000 for these digital assets.

These restrictions are designed to prevent the rapid movement of large sums of money that may be connected to illegal betting, fraud, or other criminal proceeds.

However, platforms that fully comply with the travel rule, which requires collecting identifiable information about both sender and receiver will be allowed to operate with limits twice as high.

While the regulations are strict, the Ministry emphasized that they do not aim to stifle legitimate activities within the crypto space. Treasury and Finance Minister Mehmet Şimşek stated that transactions linked to market making, liquidity provision, and arbitrage will be permitted without restriction.

Notably, the Ministry issued a clear warning to platforms that fail to comply with the new rules. Sanctions may include administrative penalties, financial fines, or even the denial or cancellation of operational licenses.

Turkey Continues to Tighten Crypto Legal Framework

The latest enforcement actions build on Turkey’s broader regulatory overhaul published on March 13, 2025, through amendments to Capital Markets Law No. 6362. These changes placed crypto platforms under the oversight of the Capital Markets Board (CMB).

Two communiqués, III-35/B.1 and III-35/B.2 set out new rules for platform structure, capital requirements, internal audits, and customer protection. Platforms must be joint-stock companies with minimum capital and approved management.

Aside from this, they are also required to conduct proof-of-reserve audits, partner with CMB-approved custodians, and maintain separate accounts for user funds.

Additional rules govern asset listings, conflict of interest policies, risk disclosures, and dispute resolution processes to enhance user safety and platform transparency.

Prior to then, Turkey introduced tighter crypto rules in February 2025 to strengthen anti-money laundering (AML) compliance and align with global standards. Announced in the last week of 2024, the regulations require crypto service providers to collect user identification for transactions over 15,000 lira (about $425).

Modeled after the EU’s MiCA framework, the rules aim to curb money laundering and terror financing, as Turkey’s presence in global crypto markets continues to grow.