By way of background, an executive order is a directive issued by the President of the United States, acting in his capacity as head of the executive branch, compelling a federal official or agency to engage in, or refrain from, a particular course of action. But this EO does not direct any federal agency to take any immediate actions with regard to cryptocurrencies or cease any ongoing efforts around cryptocurrencies; instead, the EO, which purports to utilize a novel “whole-of-government” approach, merely requires numerous federal agencies to coordinate with each other to study and report on various facets of cryptocurrencies and to recommend follow-up steps for regulatory and legislative action. The EO calls for numerous different interagency reports, assessments, and evaluations, and sets deadlines for these action items, which range from 90 days until 365 days after the issuance of the EO. Although the EO ultimately may set in motion activities that lead to federal agencies promulgating additional regulations concerning cryptocurrencies, the EO does not change the regulatory landscape for cryptocurrencies at this time. Nor does it guarantee that the regulatory landscape for cryptocurrencies will change in the future.
Additionally, the EO appears to direct some federal agencies, but not others, to take a more prominent role in the regulation of cryptocurrencies. For example, the EO directs certain federal officials and executive agencies to take specific actions, e.g., § 5(b)(ii)–(iii), whereas the EO merely requests that certain other agencies consider action, see e.g., § 5(b)(iv)–(vi). This distinction does not suggest that the EO is carving up federal responsibility to regulate cryptocurrencies but reflects the degree to which the President can influence and control policymaking by federal agencies. The President has the authority to direct traditional executive branch agencies, such as the Treasury Department, to take particular action. But the President does not have that authority over independent federal agencies, such as the Securities and Exchange Commission (“SEC”) and the Commodities Futures Trading Commission (“CFTC”). Because they are insulated from Presidential control and influence, the President may only request—not direct—that the independent federal agencies take particular action.
So the fact that the EO asks the SEC and the CFTC to consider, rather than take, action does not imply anything about their authority to regulate cryptocurrencies or their roles in the regulatory landscape. Indeed, the independent federal agencies already are active in regulating cryptocurrencies, through rulemaking and enforcement actions. See, e.g., In the Matter of: Payward Ventures, Inc. (d/b/a Kraken) Respondent, 2021 WL 4501468, CFTC Docket No. 21-20 (Sept. 28, 2021) (CFTC issuing an order, filing and settling charges against respondent Payward Ventures, Inc. d/b/a Kraken for offering margined retail commodity transactions in cryptocurrency—including Bitcoin—and failing to register as a futures commission merchant); Securities and Exchange Commission, Amendments to Exchange Act Rule 3b-16 Regarding the Definition of “Exchange”; Regulation ATS for ATSs That Trade U.S. Government Securities, NMS Stocks, and Other Securities; Regulation SCI for ATSs That Trade U.S. Treasury Securities and Agency Securities, Release No. 34-94062, File No. S7-02-22, (Jan. 2022) (proposing to amend Exchange Act Rule 3b-16, which, if adopted as proposed, could sweep in currently unregulated blockchain-based cryptocurrency platforms and subject them to all of the regulatory requirements that flow from being an exchange); Rep. of Investigation Pursuant to Section 21(a) of the Sec. Exch. Act of 1934: The DAO, Release No. 81207 (July 25, 2017) (SEC issuing report concluding that tokens offered and sold by a “virtual” organization known as “The DAO” were securities and…