gm from the Day One Law team!

Today’s legal update includes:

• 1/3 Operation Choke Point 2.0

• 2/3 SEC No-Action Letter for Tokenized Equities

• 3/3 Latest from the CFTC

House Republicans Release Report on “Operation Choke Point 2.0”

On November 25, House Financial Services Committee Republicans released a report detailing how, in the committee's view, federal bank regulators encouraged banks to avoid providing services to crypto businesses on the basis that their industries posed “reputational risk.” The report, titled “Operation Choke Point 2.0: Biden’s Debanking of Digital Assets,” asserted that such discrimination was inflicted on political grounds by the Biden Administration.

Office of the Comptroller of the Currency (OCC) head Jonathan Gould issued a statement the following Monday supporting the report’s central thesis, saying that the prudential regulators politicized debanking in such a way that “hampered the industry’s efforts to modernize, innovate, and better serve their customers and contribute to the national economy.” 

The report said that at least 30 accounts were closed in response to the allegedly over-restrictive guidance, as well as a widespread “chilling effect” that could not be quantified. The report asserted that such regulatory guidance pushed crypto businesses off shore, limiting American customers’ access to such products.

You should know: U.S. banking access for digital asset businesses is trending meaningfully better. Between the House debanking report and the OCC’s public posture (including removing “reputation risk” as a supervisory tool), the default incentive gradient for banks is shifting from “avoid” to “bank it, but controls-first.”

Practical implications:

• Expect more viable onramp/offramp options across both crypto-native banks and traditional institutions, plus more redundancy (fewer single-point failures).  

• This is not “open season.” Banks will still demand a bank-ready compliance package (licensing posture, AML/BSA program, sanctions, transaction monitoring, stablecoin exposure, and a clean funds-flow narrative).

• If you were previously stymied when trying to secure USD rails, it is worth re-running a U.S. banking workstream now because the probability of durable access is materially higher than it was 12 to 24 months ago.  

SEC Issues No-Action Letter for Tokenized Equities

The Securities and Exchange Commission (SEC) granted a subsidiary of the Depository Trust & Clearing Corporation (DTCC), the world’s largest clearing house, permission to tokenize a defined set of equities and other non-crypto assets on pre-approved blockchains.

The no-action letter allows the subsidiary, The Depository Trust Company (DTC), to list these assets on Layer 1 and Layer 2 providers which meet specific technical requirements. DTCC said in a press release that it would provide information about approved blockchains “in the coming months.” The firm says it will launch tokenization products in the latter half of 2026.

Any participant with a digital asset wallet registered with the SEC will be able to transfer tokenized entitlements directly between themselves and other registered wallets. SEC Commissioner Hester Peirce said the program “marks a significant incremental step in moving markets onchain.”

You should know: This SEC no-action relief is a real unlock, but it is best understood as regulated tokenization of DTC-held security entitlements, not a green light for free-form “equity tokens.” DTC participants can move tokenized entitlements between registered, allowlisted wallets on supported blockchains, while DTC remains the regulated market core.  

Why it matters commercially:

1. It validates a credible path for onchain settlement and post-trade automation without rebuilding the entire custody, clearing, and record-keeping stack from scratch.

2. It increases the near-term opportunity set for tokenized funds and equity-adjacent products where the value prop is faster settlement, collateral mobility, and programmable operations, not regulatory arbitrage.

3. If you are building here, design around the reality that compliance-aware rails (allowlists, registered wallets, controlled transfer logic) will be table stakes for anything that touches real securities.

CFTC Issues Series of Updates Affecting Digital Assets Regulation

Just as the Senate prepares to confirm CFTC chair nominee Mike Selig, Acting Chair Caroline Pham has been busy updating the commission’s digital assets policies.

“Under my leadership this year, the CFTC is finally using our decades-long existing authority to work smarter and faster to protect Americans who deserve safe U.S. markets now, not offshore exchanges that lack basic safeguards against uncontrolled customer losses,” Pham said in a press release.

At the start of the month, the CFTC also announced that it would allow leveraged spot crypto trading on the derivatives exchange Bitnomial, which officially went live December 8th.

The CFTC recently announced three major developments. First, the CFTC launched a pilot program for tokenized collateral on Monday, which allows CFTC-approved futures commission merchants (FCMS) to accept select digital assets as margin collateral in futures and swaps, so long as they give the CFTC the ability to monitor such trades via strict reporting requirements. Approved assets include BTC, ETH, and USDC.

Second, the CFTC rescinded 2020 guidance requiring “actual delivery” for digital assets through notice and comment Thursday. The guidance had been passed in accordance with the 2010 Dodd Frank Act, and rescinding it was one of a series of recommendations made by the President’s Working Group report on digital assets released this summer.

Pham also named twelve individuals to a CEO Innovation Council which will weigh in on rulemaking and policies related to developments in derivatives markets. The Council includes prediction market and crypto heavyweights like Polymarket’s Shayne Coplan, Kalshi’s Tarek Mansour, and Gemini’s Tyler Winklevoss.

You should know: The CFTC is no longer a background regulator for crypto. It is actively building onshore pathways for products that historically drifted offshore: listed spot crypto products on CFTC-registered venues, a tokenized collateral pilot for derivatives markets, and cleanup of outdated “actual delivery” guidance.

What to do with that:

1. Product teams should assume a growing slice of “crypto functionality” will be analyzed under CEA and swaps concepts, not just SEC securities framing.

2. Prediction markets are accelerating onshore under CFTC permissions, which will pull more teams into commodities-derivatives compliance sooner than expected.

3. The winning strategy is not choosing “SEC vs CFTC.” It is mapping each surface area (spot, leverage, perps, prediction, collateral, custody) to the right regulatory box and designing the commercial rollout sequence around what can be supported in the U.S. first.

That’s it for your legal update.

As always, please reach out if you have questions on the above, or just want to riff on what we’re seeing in the market.

Talk soon.

Nick Pullman
Day One Law