Cryptocurrency regulation focuses on laws, policies and guidelines that regulate the use of bitcoin, cryptocurrencies and blockchain technologies. This includes legal and regulatory actions to protect financial stability, consumer protection, national security, and enforcing anti-money laundering laws. It also aims to reduce regulatory overlap and increase transparency for businesses and investors.
Regulatory clarity for crypto assets remains an ongoing challenge. Federal agencies have moved from episodic litigation and speeches to approvals, statutes, executive orders, and supervisory rewrites that now shape day-to-day decisions for exchanges, custodians, stablecoin issuers, developers and institutional users.
However, disagreements persist on how to foster innovation and avoid stifling it. The GENIUS Act and the pending CLARITY Act are examples of efforts to improve the regulatory framework for digital asset markets.
In contrast, the Securities and Exchange Commission (SEC) still views many tokens as securities, even those that are not offered through initial coin offerings. The SEC’s approach combines factors such as marketability, investor demand, and the presence of centralized actors to determine whether an asset meets the Howey test for securities.
At the state level, New York’s BitLicense has established a crypto-friendly licensing regime that focuses on customer protection. Meanwhile, states like Illinois and Pennsylvania have imposed strict rules on crypto exchanges and custodial wallet providers. Many of these firms are regulated as money service businesses under the Bank Secrecy Act, which requires them to comply with anti-money laundering and know-your-customer compliance programs. In addition, many of these firms are subject to state consumer protection and privacy laws.
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