Crypto Regulation in the United States
Crypto regulation in the United States is one of the most complex and influential frameworks globally. Unlike the European Union, which introduced a unified regulatory regime (MiCA), the US approach has developed without a single comprehensive crypto law.
Instead, regulation has evolved through court decisions, enforcement actions by regulators (SEC and CFTC), and targeted legislative initiatives. As a result, the US model is often described as a system shaped through enforcement and interpretation rather than through a predefined legal framework.
How crypto regulation works in the US (simple explanation)
There is no single law that defines crypto assets in the US.
Instead, regulators apply the following logic:
- if a token qualifies as an investment contract, it falls under SEC jurisdiction
- if an asset is treated as a commodity, it falls under CFTC jurisdiction
The key question is whether a crypto asset is a security or a commodity.
Examples:
- Bitcoin is generally treated as a commodity and falls under CFTC oversight
- many tokens sold via ICOs have been treated as securities and fall under SEC regulation
The role of the Howey Test
The primary legal tool for classification is the Howey test.
It evaluates whether:
- there is an investment of money
- there is an expectation of profit
- profits depend on the efforts of others
If all criteria are met, the asset is considered an investment contract (security).
Example:
- a project sells tokens to investors
- promises to build and grow the ecosystem
- investors expect the token price to increase
In such cases, the token is likely to be classified as a security.
The enforcement-driven period: key cases
For years, US crypto regulation developed primarily through enforcement actions and litigation.
Notable examples include:
- SEC v. Ripple — dispute over the legal status of XRP
- enforcement actions against Coinbase, Binance, and Kraken
In 2025, a significant shift occurred:
- several cases were dropped or settled
- the Ripple case concluded without further appeals
This marked a transition toward a more structured and predictable regulatory approach.
Transition to a new model (2025–2026)
As of 2026, US crypto regulation is in a transitional phase.
A new model is emerging:
- reduced reliance on litigation
- increased use of formal regulatory guidance
- gradual adoption of crypto-specific legislation
At the same time, the system remains hybrid, combining legal interpretation, regulatory guidance, and existing financial laws.
The role of SEC and CFTC
The US system is built around two key regulators.
SEC (Securities and Exchange Commission)
Responsible for:
- securities
- investment contracts
- tokens that meet the Howey test criteria
Example:
- tokens sold through ICOs with investment expectations
CFTC (Commodity Futures Trading Commission)
Responsible for:
- commodities
- derivatives markets
- crypto assets that are not securities
Examples:
- Bitcoin
- other decentralized crypto assets
SEC vs CFTC: key differences
| Criteria | SEC | CFTC |
|---|---|---|
| Asset type | Securities | Commodities |
| Core test | Howey test | Absence of security characteristics |
| Examples | ICO tokens, investment-driven projects | Bitcoin and similar assets |
| Focus | Investor protection | Market integrity and derivatives |
| Regulatory approach | Disclosure and registration | Market oversight |
The core challenge of US regulation is determining which regulator has jurisdiction.
GENIUS Act: stablecoin regulation in the US
The first major federal crypto law is the GENIUS Act.
It regulates stablecoins as payment instruments and introduces:
- licensing requirements for issuers
- reserve requirements
- rules for custody of backing assets
- AML/KYC obligations
Example:
- a stablecoin backed 1:1 with fiat and used for payments falls under this regime
The law is being implemented gradually and is expected to become fully operational in 2026–2027.
CLARITY Act: defining market structure
The CLARITY Act is an attempt to create a comprehensive regulatory framework.
Its goals include:
- defining the boundary between SEC and CFTC
- introducing asset classification categories
- establishing rules for market participants
As of 2026, the law has not yet been adopted but plays a key conceptual role in shaping future regulation.
SEC guidance (2025–2026)
In 2025–2026, the SEC shifted from enforcement-driven regulation to a more structured interpretative approach.
The key principle behind these updates is that a token is not automatically a security. Its classification depends on its economic function and how it is used in practice.
Meme coins
The SEC clarified that meme coins are not automatically securities.
Typical characteristics include:
- no investment structure
- no issuer obligations
- no profit expectation
However, if marketed as investments, their classification may change.
Stablecoins
The SEC introduced a more nuanced approach.
If a stablecoin:
- is backed 1:1 by reserves
- is used primarily for payments
- is not marketed as an investment
it may not be treated as a security.
This position laid the groundwork for the GENIUS Act.
Staking
The SEC distinguished between different staking models.
Direct protocol staking, where a user participates in network validation, is generally not treated as a security.
In contrast, staking through intermediaries (such as exchanges), where users rely on a third party and expect returns from their actions, may fall under securities regulation.
The presence of an intermediary is a key factor.
Broader crypto classification (2026)
In 2026, the SEC proposed a more comprehensive classification framework.
Categories include:
- digital commodities
- digital securities
- stablecoins
- digital collectibles
- infrastructure tokens
The SEC also clarified specific activities:
- airdrops are not always investments
- mining is considered infrastructure activity
- staking depends on its structure
- wrapped assets require case-by-case analysis
This marked the first systematic attempt to describe the crypto market as a whole.
CFTC perspective
Unlike the SEC, which focuses on investment characteristics, the CFTC emphasizes the functional nature of crypto assets.
Under this approach, an asset is treated as a commodity when:
- it does not represent a claim against an issuer
- it is not part of an investment scheme
- it functions as a decentralized digital asset
Examples include:
- Bitcoin
- other decentralized tokens
By 2025–2026, the positions of the SEC and CFTC became more aligned, moving toward a dual-regulator model where each authority focuses on different aspects of the market.
How the SEC–CFTC boundary is defined
The core issue in US regulation is jurisdiction.
In practice, regulators assess whether an asset involves an investment model. If it does, it falls under SEC oversight. If not, it is more likely to fall under CFTC jurisdiction.
This means that regulation depends on the economic substance of the asset rather than its technical design.
Example:
- a token sold as an investment is regulated by the SEC
- a token used as infrastructure is typically regulated by the CFTC
As a result, the same token can be treated differently depending on how it is used.
Current regulatory model
By 2026, the US system has become more structured.
Its development can be described in three stages:
- no dedicated crypto regulation
- development through case law and enforcement
- transition to a structured framework
Today’s system includes:
- a federal stablecoin law (GENIUS Act)
- a pending market structure reform (CLARITY Act)
- formal guidance from SEC and CFTC
However, it is still not a fully unified regulatory system.
How the US differs from MiCA
The US model differs fundamentally from the European approach.
In simple terms:
- the EU (MiCA) operates under a single comprehensive law
- the US relies on a combination of laws, guidance, and case law
This leads to key differences:
- the EU has a centralized and predefined framework
- the US has a fragmented and evolving system
As a result, the US model is more flexible but less predictable.
Why this matters for investors
US regulation has a global impact.
This is reflected in:
- SEC decisions influencing token prices worldwide
- exchange listings depending on regulatory classification
- international projects aligning with US regulatory expectations
In practice, US regulation often acts as a global benchmark for the crypto market.
Conclusion
The US crypto regulatory framework is a transitional system that combines case law, regulatory interpretation, and emerging legislation.
Its defining feature is that crypto assets are classified based on their economic function rather than their formal structure.
This results in:
- context-dependent regulation
- evolving legal interpretations
- an ongoing division of responsibilities between SEC and CFTC
Understanding this framework is essential for assessing regulatory risk and operating in the global crypto market.