Cryptocurrency Laws in the United States: A Comprehensive Legal Overview
The regulatory landscape for digital assets in the United States is evolving rapidly. Federal agencies, Congress, and state legislatures have each taken significant steps to define how cryptocurrencies, stablecoins, exchanges, custodians, and blockchain‑based businesses must operate. This page provides a clear, practitioner‑oriented summary of the most important laws and regulatory frameworks shaping the industry today.
Federal Regulation of Cryptocurrency
The Guiding and Establishing National Innovation for U.S. Stablecoins Act (“GENIUS Act”) is the first federal statute to create a comprehensive regulatory framework for payment stablecoins. The Act defines which entities may issue stablecoins, establishes strict reserve and redemption requirements, and creates a dual federal‑state supervisory model.
Key features include:
- Permitted issuers only: Stablecoins may be issued only by insured depository institution subsidiaries, OCC‑approved federal issuers, or state‑qualified issuers operating under a certified regulatory regime.
- 1:1 reserve backing: Stablecoins must be backed by high‑quality, highly liquid assets such as cash, short‑term Treasuries, or insured deposits.
- Monthly attestations and disclosures: Issuers must publish reserve composition reports and undergo third‑party examinations.
- Consumer protections: Redemption at par, fee transparency, and segregation of reserve assets are mandatory.
- Bankruptcy treatment: Stablecoin reserves are not part of the issuer’s bankruptcy estate.
The GENIUS Act also clarifies that payment stablecoins issued by permitted issuers are not securities or commodities, placing them in a dedicated regulatory category.
SEC and CFTC Regulation of Crypto Assets
Crypto Assets as Securities
The SEC continues to apply the Howey test to determine whether a crypto asset or token sale constitutes an investment contract. In March 2026, the SEC and CFTC jointly issued landmark guidance establishing a five‑category taxonomy:
- Digital commodities (e.g., Bitcoin, Ether, Solana)
- Digital collectibles (NFTs, meme tokens)
- Digital tools (utility tokens, credentials, access passes)
- Stablecoins (regulated separately under the GENIUS Act)
- Digital securities (tokenized stocks, bonds, notes)
The agencies clarified that:
- A crypto asset is not automatically a security merely because it was sold in an investment contract.
- A token may “separate” from an investment contract once purchasers no longer reasonably expect managerial efforts from the issuer.
- Mining, staking, wrapping, and airdrops of non‑security crypto assets generally do not involve securities transactions when performed under specified conditions.
Crypto Assets as Commodities
The CFTC treats many non‑security crypto assets as commodities, giving the agency authority over:
- Fraud and manipulation in spot markets
- Derivatives, futures, and swaps referencing digital assets
The joint SEC‑CFTC guidance represents the most coordinated federal approach to date.
State Cryptocurrency Laws
State laws vary widely, and compliance often depends on where a business operates or serves customers. Below is a summary of the most significant state‑level frameworks.
Digital Financial Assets Law (DFAL)
Effective 2025, California’s DFAL establishes a licensing regime for businesses engaging in:
- Digital asset exchange
- Custody services
- Issuance of digital financial assets
- Operating digital asset kiosks
DFAL imposes capital requirements, cybersecurity standards, consumer disclosures, and examination authority similar to New York’s BitLicense.
Unclaimed Property Rules
California treats certain digital assets as reportable unclaimed property when custodians or platforms hold abandoned accounts. Exchanges must comply with escheatment timelines and reporting obligations.
Crypto Kiosk (ATM) Regulations
California imposes strict rules on digital asset kiosks, including:
- Transaction caps
- Enhanced identity verification
- Prohibitions on certain high‑risk tokens
- Mandatory disclosures to consumers
BitLicense / NY Virtual Currency Business Activity License
New York’s BitLicense remains one of the most rigorous digital‑asset regulatory regimes in the country. It requires:
- Licensing for exchanges, custodians, and transmitters
- Comprehensive AML/KYC programs
- Cybersecurity and business continuity planning
- Prior approval for listing new tokens
- Ongoing examinations and reporting
Ban on Fossil‑Fuel‑Powered Crypto Mining
New York enacted a first‑in‑the‑nation moratorium on new or expanded proof‑of‑work mining operations that rely on fossil‑fuel‑based power plants. The law aims to reduce environmental impacts while allowing renewable‑powered mining to continue.
Texas Virtual Currency Act
Texas recognizes virtual currency as a form of personal property and provides a statutory framework for:
- Control and transfer of digital assets
- Custodial obligations
- Perfection of security interests in virtual currency
Texas has positioned itself as a crypto‑friendly jurisdiction, with clear rules for custodians and a supportive regulatory environment for mining and blockchain businesses.
Act 7 of 2025 – Money Transmitter Licensing for Crypto Businesses
As of June 2025, Pennsylvania requires that any entity transferring cryptocurrency for a fee obtain a money transmitter license from the Department of Banking and Securities (DoBS).
Key elements:
- Virtual currency is officially treated as “money” under state law.
- Exchanges, custodians, and payment processors must comply with the Money Transmitter Act, including bonding, net‑worth, and AML requirements.
- Non‑custodial software providers may be exempt depending on business model.
This represents one of the most significant state‑level shifts toward treating crypto transactions like traditional financial services.
Wyoming
Wyoming has enacted some of the most innovative digital‑asset laws in the country.
Wyoming Stable Token Act
Wyoming authorizes the issuance of a state‑backed stable token redeemable for U.S. dollars held in trust. The token is designed to function as a fully reserved, government‑issued digital asset.
Decentralized Unincorporated Nonprofit Associations (DUNAs)
Wyoming created a first‑of‑its‑kind legal structure for decentralized blockchain projects. DUNAs allow DAOs to:
- Obtain legal personhood
- Limit liability for participants
- Hold property and enter contracts
- Operate without traditional corporate formalities
This framework is widely viewed as a model for DAO‑friendly legislation.
Illinois
Digital Assets and Consumer Protection Act
Illinois requires licensing for digital asset businesses engaged in:
- Exchange services
- Custody
- Transmission
- Digital asset lending
The Act includes consumer‑protection provisions, cybersecurity requirements, and examination authority.
Digital Asset Kiosk Act
Illinois regulates cryptocurrency ATMs by imposing:
- Registration requirements
- Transaction limits
- Enhanced identity verification
- Anti‑fraud safeguards
The law responds to concerns about kiosk‑based scams and unlicensed money transmission.
Conclusion
Cryptocurrency regulation in the United States is a complex interplay of federal and state laws. Businesses operating in this space must navigate:
- Federal securities and commodities regulation
- Stablecoin‑specific rules under the GENIUS Act
- State licensing regimes
- Consumer‑protection and AML obligations
- Environmental and operational restrictions
If you need guidance on how these laws apply to your business, we are here to help.