Crypto Overview in the United States of America

Regulatory data is for informational purposes only and may not reflect the most current legal developments. Always consult qualified professionals before making decisions.

Legal Classification & Regulatory Framework

Cryptocurrency Status

Cryptocurrencies are legal in the United States, though their classification varies across federal agencies. The IRS treats all cryptocurrency as property for tax purposes. The CFTC (Commodity Futures Trading Commission) classifies Bitcoin and other major cryptocurrencies as commodities. The SEC (Securities and Exchange Commission) applies the Howey test to determine whether specific tokens qualify as securities, though its approach has shifted significantly under the current administration.

In March 2026, the SEC and CFTC jointly released an interpretive framework classifying 16 major cryptocurrencies as digital commodities, including Bitcoin, Ethereum, XRP, Solana, Cardano, and Litecoin. The framework establishes five categories: digital commodities, digital collectibles, digital utilities, stablecoins, and digital securities, and clarifies that staking, mining, airdrops, and token wrapping of classified digital commodities do not constitute securities law violations. This classification is interpretive guidance rather than statute; assets can still be reclassified depending on how they are offered or sold.

The SEC v. Ripple case, concluded in August 2025 after a $50 million settlement, established a key precedent: programmatic sales of tokens on secondary markets may not constitute securities transactions, even when institutional sales of the same token do.

Tax Treatment

Dispositions of cryptocurrency trigger capital gains or losses. Short-term gains (assets held one year or less) are taxed at ordinary income rates of 10% to 37%. Long-term gains (held more than one year) are taxed at preferential rates of 0%, 15%, or 20% depending on taxable income. Staking rewards, mining income, and airdrops are taxable as ordinary income when the taxpayer gains dominion and control over the assets.

Beginning with the 2025 tax year, the IRS introduced Form 1099-DA requiring brokers and custodial platforms to report gross proceeds from digital asset transactions. Cost basis reporting follows from January 2026. Crypto-to-crypto swaps are treated as property sales triggering capital gains or losses. The tax treatment of complex DeFi interactions such as wrapped tokens and liquidity pool positions remains partially undefined.

Regulatory Oversight

The United States operates a multi-agency regulatory framework:

• SEC (Securities and Exchange Commission): Oversees digital assets classified as securities and platforms trading them. Under Chair Paul Atkins (confirmed April 2025), the agency has shifted from enforcement-led regulation to guidance-led frameworks, dismissing cases against major exchanges including Binance, Coinbase, and Kraken.
• CFTC (Commodity Futures Trading Commission): Regulates digital commodities and their derivatives. Poised to gain expanded authority over digital commodity spot markets under pending legislation.
• FinCEN (Financial Crimes Enforcement Network): Regulates crypto exchanges and wallet providers as Money Services Businesses (MSBs) under the Bank Secrecy Act (BSA).
• OCC (Office of the Comptroller of the Currency): Issued Interpretive Letters 1183 (March 2025) and 1184 (May 2025) confirming that national banks may provide crypto custody, execute trades on customer direction, use sub-custodians, and participate in distributed ledger networks, without prior supervisory non-objection.
• State regulators: Each state maintains its own requirements, with New York’s BitLicense being the most stringent and Wyoming leading on innovation-friendly legislation.

Business Environment

Banking Relationships

Banking access for crypto businesses has improved markedly since early 2025. A Congressional investigation documented how federal regulators had previously discouraged banks from serving crypto businesses through informal guidance and supervisory pressure, with at least 30 digital asset entities losing banking access between 2022 and 2024, a pattern widely referred to as “Operation Choke Point 2.0.”

Several regulatory changes have reversed this trend. The SEC rescinded Staff Accounting Bulletin 121 (SAB 121) in January 2025, which had required banks to record custodied crypto as on-balance-sheet liabilities, making custody services prohibitively expensive. The OCC eliminated the prior requirement for supervisory non-objection before banks could engage in crypto activities, via Interpretive Letter 1183 in March 2025. The FDIC publicly released its earlier “pause” letters and clarified that prior approval is not required for permissible crypto activities. Federal agencies have also proposed eliminating “reputation risk” as a supervisory criterion, removing a tool that had been used to pressure banks away from crypto relationships.

Innovation Support

The United States has taken several notable steps to support crypto innovation. The approval of 11 spot Bitcoin ETFs in January 2024 and 8 spot Ethereum ETFs in May 2024 opened regulated investment vehicles for institutional and retail investors. In September 2025, the SEC approved generic listing standards for spot commodity ETPs, streamlining future crypto ETF approvals. In-kind creation and redemption for Bitcoin and Ethereum ETFs was approved in July 2025.

A Strategic Bitcoin Reserve was established by executive order in March 2025, funded by approximately 207,000 Bitcoin from criminal and civil forfeiture. The reserve is positioned as a permanent store of value, with sales prohibited. A separate Digital Asset Stockpile holds other seized digital assets including Ethereum, XRP, Solana, and Cardano.

At the state level, Wyoming has enacted over 20 blockchain-related laws, including the first DAO LLC Act and a Special Purpose Depository Institution (SPDI) charter for crypto-native banks. Four SPDI charters have been granted to date, with Kraken Financial as the first recipient. Wyoming also became the first U.S. state to issue its own stablecoin, the Frontier (FRNT) token, in August 2025. New Hampshire became the first state to allow investment of up to 5% of public funds in digital assets with market capitalizations exceeding $500 billion. Texas established a state-level Strategic Bitcoin Reserve in June 2025.

Crypto License in the United States

The United States has no single federal crypto license. Operators must assemble a stack of authorizations: a federal FinCEN MSB (Money Services Business) registration under the Bank Secrecy Act, Money Transmitter Licenses (MTLs) in each state where they serve customers, and oversight by the SEC, CFTC, or OCC depending on the activity. The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), signed July 18, 2025, introduced the first federal pathway for payment stablecoin issuers via a dual federal-state licensing track. For all other crypto activities, state-by-state licensing remains the operative regime.

Licensing Requirements

At the federal level, any business that administers or exchanges convertible virtual currency must register with FinCEN as an MSB using Form 107 via the BSA E-Filing System within 180 days of commencing operations, renewing every two calendar years. Registration triggers ongoing obligations: a written AML (Anti-Money Laundering) program, a designated Compliance Officer, Suspicious Activity Reports (SARs) for transactions of $2,000 or more, Currency Transaction Reports (CTRs) for cash transactions exceeding $10,000, and Travel Rule recordkeeping for transmittals of $3,000 or more. Operating as an unregistered MSB is a federal felony under 18 U.S.C. 1960.

At the state level, 49 states and the District of Columbia require a Money Transmitter License (only Montana does not). Most applications are filed through the Nationwide Multistate Licensing System (NMLS). The Money Transmission Modernization Act (MTMA), enacted by 31 states, standardizes net worth minimums, surety bond requirements, and permissible investment rules. Surety bond amounts range from roughly $10,000 in smaller jurisdictions to $2 million or more in larger states; most fall between $100,000 and $500,000. The Conference of State Bank Supervisors (CSBS) Multi-State MSB Licensing Agreement (MMLA) allows a lead-state review accepted by participating states, reducing duplication across the rollout.

New York’s BitLicense (23 NYCRR Part 200), administered by the New York Department of Financial Services (NYDFS), is a separate specialized regime, not a standard MTL. It requires a minimum $500,000 surety bond or net capital, annual AML risk assessments, cybersecurity controls meeting NYDFS Part 500 standards, a Chief Information Security Officer (CISO) annual report to the board, and bi-annual independent examinations. Applications are filed through NMLS; well-prepared submissions may be approved within 12 months, while complex exchange-focused applications regularly take 18 to 24 months.

For payment stablecoin issuance, the GENIUS Act creates a dual path: issuers may seek a federal charter supervised by the OCC or FDIC, or operate under a state regime recognized as “substantially similar” to the federal standard. Issuers must maintain 1:1 reserves in high-quality liquid assets; rehypothecation is prohibited. The OCC published a Notice of Proposed Rulemaking on February 25, 2026, addressing application requirements, capital adequacy, and redemption obligations. Final rules are targeted by July 18, 2026, with compliance required by January 18, 2027 at the latest.

Application Process and Timeline

A multi-state MTL rollout through NMLS requires a business plan, AML/KYC policies, audited financials, and background checks on owners and key personnel. Processing times vary from 60 to 180 days per state; a full national build-out typically takes 12 to 24 months. For the New York BitLicense, the NYDFS issues a supervisory agreement upon approval setting firm-specific operating conditions. For GENIUS Act federal stablecoin charters, the application framework will be finalized once the OCC completes its rulemaking, expected by mid-2026.

Market Characteristics

Adoption Patterns

The United States is the largest cryptocurrency market globally, with substantial retail and institutional participation. Spot Bitcoin and Ethereum ETFs attracted billions in institutional capital after their 2024 approvals, while retail adoption spans self-custody, exchange-based trading, and DeFi participation. The country hosts the majority of the world’s regulated crypto exchanges, custodians, and infrastructure providers.

Industry Focus

The US crypto industry spans exchange operations, institutional custody, DeFi protocol development, stablecoin issuance, mining, and venture capital investment. Major exchanges including Coinbase, Kraken, and Gemini are headquartered in the US. Dollar-denominated stablecoins dominate global markets. Bitcoin mining, particularly in Texas and other energy-rich states, is a significant and growing sector.

Regulatory Evolution

The US regulatory landscape has undergone a dramatic shift. The period from 2021 through early 2025 was characterized by enforcement-led regulation, with the SEC bringing dozens of cases against crypto firms. Under the current administration, enforcement actions have dropped 27% and monetary settlements declined 45%, while the agency has shifted toward guidance-led frameworks and legislative cooperation.

The GENIUS Act represents the first federal crypto legislation signed into law, though its scope is limited to payment stablecoins. The CLARITY Act (Digital Asset Market Clarity Act) passed the House in July 2025 with a 294-134 vote and cleared the Senate Banking Committee on May 14, 2026, by a 15-9 vote. It would formally divide SEC and CFTC authority over digital assets. The bill still requires a full Senate floor vote before proceeding to conference and presidential signature.

The US is a founding member of the Financial Action Task Force (FATF) and received strong ratings in its most recent full evaluation. A fifth-round mutual evaluation underway in 2026 will for the first time fully assess the effectiveness of the country’s virtual asset supervision framework. The federal-versus-state dynamic remains distinctive: federal agencies set broad policy while states retain authority over licensing and consumer protection, creating compliance complexity for operators but competitive opportunities for innovation-friendly jurisdictions.