The decision to open a cryptocurrency account carries legal, financial, and operational implications that extend well beyond the initial deposit. For high-net-worth individuals, family offices, and corporate treasury functions, the stakes are magnified by the scale of holdings, the complexity of applicable regulatory regimes, and the finality of blockchain-based transactions. This alert addresses three critical dimensions of that threshold decision: the proactive security measures that should be in place before any digital asset is acquired, the structural and tax considerations that attend account design, and the consequences that follow when security protocols are not observed.

Earlier this year, the Michigan House of Representatives introduced several new bills aimed at fostering blockchain innovation and addressing certain open issues regarding the treatment of digital assets. As discussed herein, one of these bills, HB 4511 of 2025, provides digital asset users and associated service providers helpful guidance on the state’s current approach to this technology while reflecting broader policy trends at the state and federal levels.

On September 4, 2024, the California Attorney General’s office reached a $3.9 million settlement with a cryptocurrency trading platform. This marks the first public enforcement action by the California Department of Justice against a cryptocurrency company, as well as the first application of the state's commodity laws to cryptocurrency. While the CA DOJ’s focus on consumer protection is commendable, the Settlement exhibits features of “regulation by enforcement.” Its lack of specific legal guidance leaves cryptocurrency companies uncertain about how California laws apply to their operations.