Crypto Regulation in the U.S.: What Exists, What’s Changing, and What’s Coming Next

The cryptocurrency industry has grown from a niche experiment into a trillion-dollar global force. But in the U.S., regulation is still catching up—and often caught in a tug-of-war between innovation and oversight.

From state-level pro-crypto bills to federal enforcement actions, the regulatory landscape is complex, shifting, and high-stakes for banks, investment firms and businesses.

This article breaks it down:

What crypto regulations exist today
What happened in the Ripple v. SEC case
How states like Texas are leading
What’s expected in 2025 and beyond
Effect of U.S. Bitcoin Reserve establishment

Federal Crypto Regulation: The Current State

There is no single federal law that governs all of crypto. Instead, several agencies apply existing laws to digital assets, often inconsistently:

1. SEC (Securities and Exchange Commission)

Claims that many crypto tokens are unregistered securities

Uses the Howey Test to determine if a token is an investment contract

Has targeted companies like Ripple, Coinbase, Kraken, and others

Wanted regulatory control over crypto issuance, sales, and exchanges

(To address changes in SEC leadership in upcoming articles)

2. CFTC (Commodity Futures Trading Commission)

Has argued that many crypto assets (like Bitcoin and Ether) are commodities

Oversees crypto derivatives, futures, and trading platforms

Supports clearer crypto regulation, not enforcement-only actions

3. IRS (Internal Revenue Service)

Treats crypto as property for tax purposes

Requires capital gains reporting for every transaction

Crypto tax reporting now included in standard 1040 forms

4. FinCEN (Financial Crimes Enforcement Network)

Enforces anti-money laundering (AML) and know-your-customer (KYC) laws

Requires registration for crypto exchanges and custodians as money service businesses (MSBs)

The result? A patchwork of rules, competing interpretations, and significant legal uncertainty for crypto businesses and investors. Read below to see how things are changing fast.

The Ripple v. SEC Case: What Just Happened?

In 2020, the SEC sued Ripple Labs, claiming that XRP tokens were unregistered securities and that Ripple had raised billions in an illegal securities offering.

After nearly three years of legal back-and-forth, in 2023–2025, several major developments happened:

A federal judge ruled that XRP is not a security when sold on public exchanges
However, the court found that institutional sales of XRP were securities
In 2024, the SEC quietly dropped its remaining claims against Ripple executives
Ripple declared legal victory, calling it a win for the industry

But the mixed ruling left key issues unresolved (e.g., secondary market sales of other tokens)

Why This Matters:

Sets precedent that not all crypto tokens are securities
Undermines the SEC’s broader campaign against crypto
Boosts efforts in Congress to pass clear crypto legislation
Encourages other companies (like Coinbase) to fight back instead of settle

What Are the States Doing?

Some U.S. states are moving faster—and more favorably—than the federal government.

Texas

Strong pro-crypto stance
Passed laws protecting Bitcoin mining, self-custody, and energy innovation
Opposes a U.S. CBDC (Central Bank Digital Currency)
Hosts major industry players (like Riot Platforms, Layer1)
Working to recognize DAO legal entities and blockchain-based land registries

Wyoming

The most crypto-forward state legally
Created a special DAO LLC structure (more about DAOs in future articles)
Legalized digital asset custody by state-chartered banks
Introduced the concept of “digital property rights”

Florida

Also opposes a federal CBDC
Supports personal financial privacy and crypto innovation
Exploring ways to integrate blockchain into public infrastructure

Other states like California, New York, and Colorado are exploring crypto but with more cautious or regulatory-heavy approaches.

What’s Coming in 2025 and Beyond?

Likely Developments & Federal Crypto Legislation

Congress is under pressure to pass:

A digital asset market structure bill
A stablecoin regulation bill
Bipartisan proposals are emerging (e.g., FIT Act, Digital Commodities Act)

Stablecoin Clarity

USDC, PYUSD, and others may face licensing, reserve, and audit requirements
Likely treated differently than algorithmic coins like UST (which collapsed)

SEC Reform or Restraint

Court rulings (like Ripple) may limit the SEC’s enforcement strategy
Congress may explicitly assign crypto oversight to the CFTC or a new agency

Privacy and Self-Custody Protections

Laws may emerge protecting wallet usage, private keys, and off-chain privacy
CBDC Opposition Momentum
More states may pass anti-CBDC bills

What Should Businesses and Builders Do Now?

Track legislation at both federal and state levels
Align operations with stablecoin and DAO-friendly states (like Texas, Wyoming)
Include crypto clauses in legal contracts
Stay compliant with current IRS and FinCEN rules
Monitor key cases for additional regulatory impact

Final Thoughts: From Confusion to Clarity

Crypto regulation in the U.S. is still unfolding. But after years of legal battles, shifting agency stances, and state experimentation, the path forward is clearer:

Stablecoins are likely to be legalized and regulated
Decentralized systems (DAOs, smart contracts, wallets) will continue to grow
The Ripple case exposed the limits of enforcement-by-lawsuit
The U.S. rejection of CBDCs steers global crypto policy toward freedom over control

How The U.S. Bitcoin Reserve Effects Regulations

The formally held U.S. Bitcoin Reserve and digital assets sovereign wealth fund, signals a major policy shift that directly impacts regulation, adoption, and global legitimacy.

1. Legitimizes Digital Assets

A formal reserve or wealth fund holding Bitcoin does this:

Signals federal recognition of crypto as a strategic asset
Forces regulatory agencies to align on classification and oversight
Likely accelerates Congressional action on comprehensive legislation

If the federal government treats Bitcoin as part of its monetary reserves or long-term strategic portfolio, it can’t be simultaneously labeled an “unregistered security” by another agency.

This would likely:

Reinforce Bitcoin’s classification as a commodity under the CFTC
Push other cryptos (especially stablecoins) toward clearer regulatory lanes
Encourage institutional investment with less legal ambiguity

2. Creation of a Regulatory Framework Built Around Protection, Not Suppression

Since the U.S. holds crypto itself, regulations will evolve to:

Ensure safe custody, disclosure, and risk management
Mandate auditing and transparency for public trust
Create guardrails, not roadblocks, for others doing the same

This could also lead to the creation of a federal digital assets office or regulatory body to oversee digital reserves, custody, and treasury strategy—independent of the SEC/CFTC feud.

3. International Pressure to Clarify Laws

A sovereign Bitcoin reserve creates international ripple effects:

Other countries would respond—some copying the U.S. move (e.g., UAE, Singapore), others tightening controls (e.g., China)
The IMF and G20 will be pressured to update their frameworks
U.S. allies would seek regulatory harmonization for trade and finance

It will also embolden private sector growth in tokenization, custody, and infrastructure (like Circle, Coinbase, Anchorage, etc.)

4. Stablecoin and DAO Regulation Becomes Urgent

The U.S. government staked a claim in digital assets, so now it must:

Clarify the role of stablecoins in commerce, treasury, and public infrastructure
Define how DAOs, DeFi, and Web3 companies interact with regulated systems
Legislate around self-custody, privacy, and cross-border transfers
This will likely push regulators toward a pro-innovation posture, rather than reactive enforcement.

5. The End of the Anti-Crypto Stance from Federal Agencies

Some regulators (notably within the SEC) have taken a combative stance toward crypto. The creation of the US Bitcoin reserve will have these effects:

It would be politically untenable for federal agencies to continue hostile enforcement campaigns
Enforcement would shift from “is crypto valid?” to “how do we manage it responsibly?”

It will also likely:

Increase cooperation between agencies (SEC, CFTC, Treasury, IRS, FinCEN)
Reduce regulatory contradictions and overreach
Drive state-federal alignment on crypto infrastructure and taxation

Final Thought: The Signal and the Shift

The creation of the U.S. Bitcoin reserve and sovereign digital asset fund is more than just a financial move—it is a huge geopolitical and regulatory milestone:

Cements crypto as part of U.S. economic strategy
Ends the era of legal limbo
Ushers in a more structured, pragmatic, and innovation-friendly regulatory environment

And for businesses and builders?

It will provide the road to the certainty needed to scale with confidence.