The United States regulates crypto through an accumulating stack rather than a single code. The first layer is old law applied to new assets: the Bank Secrecy Act has treated exchangers of convertible virtual currency as money services businesses since FinCEN's 2013 guidance, the CFTC has treated bitcoin as a commodity since 2015, and the SEC has applied the Howey investment contract test to token sales since the 2017 DAO Report. The second layer arrived in July 2025, when the GENIUS Act became the first federal statute written for crypto, licensing payment stablecoin issuers. The third layer, the CLARITY Act covering market structure for everything else, passed the House in July 2025 and failed its first Senate test on September 15, 2026, when cloture on the motion to proceed fell 49–50, eleven votes short of the 60 needed. A motion to reconsider keeps a post-election revival procedurally possible; otherwise the bill dies with the 119th Congress.
Agency posture changed as much as statute. Under Chair Paul Atkins the SEC formally retired regulation by enforcement, dismissed or settled most legacy crypto cases, stood up a Crypto Task Force under Commissioner Hester Peirce, and announced Project Crypto in July 2025 as a rulemaking agenda covering an investment-contract off-ramp test, an innovation exemption for tokenized securities, capital-raising pathways, and broker-dealer custody of non-security crypto. On August 18, 2026 the agency proposed Regulation Crypto Assets, its first permanent crypto rule: a $5 million startup exemption and a $75 million annual fundraising exemption for crypto offerings, with disclosure on a new Form 1-CRYPTO, state preemption, and a safe harbor for assets whose issuers have completed their promised managerial work. Treasury proposed its GENIUS definitions the same day. Two days after the Senate vote, on September 17, the SEC issued its innovation exemption for on-chain trading of tokenized stocks, and the CFTC sent the White House a pre-rule filing for a crypto asset market regime built on its existing authority. The CFTC had moved in lockstep all year: the two agencies signed a memorandum of understanding on March 11, 2026, and on March 17 issued a joint interpretive release sorting crypto assets into five categories and naming sixteen, including ether, XRP, and solana, as digital commodities. On May 29, 2026 the CFTC approved the first bitcoin perpetual futures contract on a US designated exchange. All of it is guidance, exemptive relief, and rulemaking that a future administration can reverse, which is why the industry still wants the statute.
The last week of September showed the pattern continuing. On September 24, 2026 the Federal Reserve Board proposed its GENIUS Act rules for stablecoin issuers affiliated with Board-supervised banks, requiring full backing in short-term Treasuries and other high-quality liquid assets, standardized capital charges for credit and operational risk, and treating certain third-party yield arrangements as presumptively prohibited interest, with a companion proposal setting the application process for bank subsidiaries; comments close 60 days after Federal Register publication. The same day CFTC staff updated their crypto FAQs to let futures commission merchants and clearinghouses hold customer funds in tokenized versions of permitted investments and keep required records on a blockchain. On September 25 the SEC's Division of Corporation Finance added staff answers on when token buybacks, network upgrades, and promotional claims do and do not signal the managerial efforts that make an asset an investment contract, and Commissioner Hester Peirce, who leads the Crypto Task Force, announced that she will leave the Commission on October 2, 2026, leaving Chair Atkins and Commissioner Uyeda as its only members.
Below the federal layer, state law still decides who may serve customers. Most states reach crypto through money transmission statutes; New York has run its BitLicense since 2015, California's Digital Financial Assets Law went operative on July 1, 2026, and Illinois enacted a similar regime in 2025. The state tracker follows eleven states in detail. Taxation runs on its own track: crypto is property for federal tax purposes, brokers began reporting gross proceeds on the new Form 1099-DA for 2025, and the IRS proposed digital-delivery rules in March 2026.
The instruments
GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act)
Signed July 18, 2025. Creates a federal licensing regime for payment stablecoin issuers, with a dual track through federal banking regulators or certified state regimes. Requires 1:1 reserves in cash, Treasuries, and other high-quality liquid assets, monthly reserve disclosure, redemption rights, and Bank Secrecy Act compliance, and prohibits paying interest or yield on the stablecoin itself. Licensing takes effect January 18, 2027, and from July 18, 2028 service providers may not offer any payment stablecoin to US persons unless a licensed issuer stands behind it. The OCC proposed issuer rules in March 2026, FinCEN and OFAC proposed the illicit-finance program rules, and on August 18, 2026 Treasury proposed the section 3 definitions of issuing, offering, and selling in the United States, with comments due October 19, 2026. On September 24, 2026 the Federal Reserve Board proposed its own rules for issuers affiliated with Board-supervised banks (Dockets R-1899 and R-1900): full reserve backing, standardized capital requirements, a presumption that certain third-party yield arrangements are prohibited interest, and an application procedure for bank subsidiaries, with comments due 60 days after Federal Register publication.
CLARITY Act (Digital Asset Market Clarity Act)
The market structure bill. Creates a 'digital commodity' category with CFTC jurisdiction over spot markets, preserves SEC authority over digital securities and investment-contract offerings, and establishes registration for digital commodity exchanges, brokers, dealers, and custodians with segregation and bankruptcy-priority protections for customers and statutory protection for self-custody. Passed the House 294–134 on July 17, 2025. The Senate Banking Committee advanced a 309-page version 15–9 on May 14, 2026, adding a DeFi trading protocol framework, an insolvency safe harbor, a bar on yield for idle stablecoin balances, and illicit-finance provisions; Senate Agriculture advanced its companion Digital Commodity Intermediaries Act 12–11 on January 29, 2026. Placed on the Senate calendar June 1, 2026 (No. 423). A final text released September 13 added a divest-or-blind-trust ethics rule for covered officials and spouses, enforceable by state attorneys general alongside DOJ. On September 15, 2026 the Senate rejected cloture on the motion to proceed 49–50 (Roll Call Vote 234). No Democrat voted yes; Republicans Collins, Hawley, and Moran voted no, and Tillis switched to no so he could enter a motion to reconsider. The bill remains on the calendar, and without a lame-duck agreement it expires when the 119th Congress ends on January 3, 2027.
Joint SEC-CFTC Interpretive Release on crypto asset classification
The agencies' shared taxonomy: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities, with sixteen named assets (including ether, XRP, solana, cardano, and dogecoin) classified as digital commodities. Issued under the March 11, 2026 SEC-CFTC memorandum of understanding committing both agencies to harmonized crypto policy. Guidance rather than statute: it governs staff practice today but can be revised by a future Commission.
SEC Project Crypto rulemaking agenda
Announced July 31, 2025 and elaborated through 2026: a formal test for when a crypto asset ceases to be an investment contract, a temporary 'innovation exemption' permitting limited trading of tokenized securities on novel platforms, new capital-raising pathways for crypto offerings, a custody rule allowing broker-dealers to hold non-security crypto including payment stablecoins, and transfer-agent modernization for blockchain recordkeeping. Regulation Crypto Assets (Release 33-11434), proposed August 18, 2026, would create a $5 million startup exemption over four years and a two-tier fundraising exemption up to $75 million per year, with Form 1-CRYPTO disclosure, preemption of state registration, and a safe harbor once an issuer's promised managerial efforts are complete; comments close October 20, 2026. The innovation exemption followed on September 17, 2026 as a standalone exemptive order, and on September 25, 2026 Division of Corporation Finance staff added FAQ answers on token buybacks, network upgrades, and promotional claims. The SEC and CFTC are also jointly advancing extended and 24-hour trading initiatives.
SEC Innovation Exemption for tokenized NMS stock
Five-year conditional exemptions, running to September 17, 2031, under which Tokenized Securities Venues may trade tokenized versions of exchange-listed US stocks through permissioned automated market makers and liquidity pools without registering as exchanges, and liquidity providers supplying those pools are exempt from the dealer definition. Conditions include allow-listed participant wallets, rights identical to the underlying shares, trading halts synchronized with the primary market, limits of 75 symbols and 0.25% of volume for the most liquid stocks (250 symbols and 2.5% for all others), and at least 30 days' notice to an issuer, which may object, before a third party tokenizes its stock. The Commission requested public comment on all aspects.
CFTC crypto asset market regime (pre-rule)
After the CLARITY Act stalled, the CFTC submitted a pre-rule filing for White House regulatory review, the first step toward a new CFTC-registered category of crypto asset market using the agency's existing authority over leveraged and margined retail commodity trading. An advance notice and comment period would follow review, with a proposed rule expected in 2027. The approach cannot give the CFTC authority over unleveraged spot trading, which still requires legislation.
Executive Order 14178: Strengthening American Leadership in Digital Financial Technology
Signed January 23, 2025. Set the administration's policy of supporting lawful dollar-backed stablecoins and self-custody, prohibited agencies from establishing a central bank digital currency, revoked the prior administration's digital asset order, and created the President's Working Group on Digital Asset Markets, whose July 2025 report set the legislative roadmap the GENIUS and CLARITY Acts followed.
Executive Order establishing the Strategic Bitcoin Reserve and U.S. Digital Asset Stockpile
Directs Treasury to hold bitcoin forfeited to the federal government as a strategic reserve, not to be sold, with a separate stockpile for other forfeited digital assets, and authorizes budget-neutral strategies for acquiring additional bitcoin. Several states followed with their own reserve statutes (see the state tracker: Texas, New Hampshire, Arizona).
Anti-CBDC Surveillance State Act
Passed the House in July 2025 during 'Crypto Week' alongside the GENIUS and CLARITY Acts. Would prohibit the Federal Reserve from issuing a retail central bank digital currency or using one to implement monetary policy. Awaits Senate action; the substance is partially covered in the interim by E.O. 14178's CBDC prohibition.
Bank Secrecy Act coverage of virtual currency
Exchangers and administrators of convertible virtual currency are money services businesses: FinCEN registration, AML programs, suspicious activity and currency transaction reporting, and the travel rule apply. This has been the enforceable floor of US crypto regulation for over a decade and remains the basis for major criminal resolutions.
Digital asset tax treatment and broker reporting (Form 1099-DA)
Crypto is property for federal tax purposes (Notice 2014-21). Custodial brokers report gross proceeds on Form 1099-DA beginning with 2025 transactions, with basis reporting phasing in for 2026; the March 2026 proposed regulations facilitate digital delivery of the form. Congress repealed the DeFi front-end broker rule in April 2025 under the Congressional Review Act.
Questions people ask
Is cryptocurrency legal in the United States?
Yes. Buying, holding, self-custodying, and trading crypto are legal nationwide. What is regulated is the business layer: issuing a payment stablecoin requires approval under the GENIUS Act once effective, exchanges and custodians need state licenses (and federal registration where securities or derivatives are involved), and all money-services businesses carry Bank Secrecy Act obligations.
Has the CLARITY Act passed?
No. The House passed it in July 2025. In the Senate, both committees of jurisdiction advanced their versions in the first half of 2026, the bill reached the floor calendar June 1, and cloture on the motion to proceed was filed August 8, 2026. On September 15, 2026 the Senate rejected that motion 49–50, eleven votes short of 60. A motion to reconsider was entered, so leadership could bring it back after the November elections if a deal emerges; otherwise the bill expires with the 119th Congress on January 3, 2027 and would have to be reintroduced.
Who regulates crypto in the US, the SEC or the CFTC?
Both, divided by asset character. Under the March 2026 joint guidance, digital commodities (bitcoin, ether, and fourteen other named assets) fall primarily to the CFTC in spot markets, while digital securities and investment-contract offerings belong to the SEC. The CLARITY Act would write that split into statute; while it is stalled, the agencies are extending it through their own rules.
Can US stablecoins pay interest?
Not the issuer, on the coin itself: the GENIUS Act prohibits paying holders interest or yield solely for holding the stablecoin, and the Senate's 2026 CLARITY text extends a bar on yield for idle balances at intermediaries while permitting activity-based rewards. Bank regulators have proposed treating coordinated affiliate yield arrangements as evasive.