Crypto Regulations in the US—A Complete Guide (2025)

Learn how the current legislative crypto framework functions in the US and how it may change in the future

The US cryptocurrency regulatory landscape has changed quite a bit lately. With President Donald Trump returning to the White House in 2025, his administration is adopting a pro-crypto stance and pushing for aggressive deregulation at the federal level, which is shaking things up in the crypto world. One of the most headline-grabbing moves so far is the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, showing the intent to treat digital assets as a national strategic priority.

Key regulatory bodies—such as the Department of Justice’s National Cryptocurrency Enforcement Team—have been disbanded, and the Securities and Exchange Commission (SEC) appears to be loosening its grip, even dropping major lawsuits against well-known crypto companies such as Gemini and Coinbase. 

 

 

This shift brings a mix of opportunities and challenges. On the one hand, this deregulatory approach could spark innovation and growth in the crypto sector. On the flip side, it raises some serious concerns about consumer protection, financial stability, and the risk of more criminal activity as a result of the weakened regulatory oversight.

In this guide, we’ll take a closer look at the federal licensing requirements, review the current state of US crypto regulations, and explore how recent legal changes and the administration’s policies are affecting the industry and what it all means for the future.

 

 

General overview of US Federal Crypto Regulation (2025)

At the federal level, the regulation of cryptocurrency-related activities in the United States is grounded in the application of existing financial laws to digital assets, leading to inconsistencies due to the unique nature of digital assets. Entities engaged in the exchange, transfer, or custody of cryptocurrencies are typically classified as Money Services Businesses (MSBs) and must register with the Financial Crimes Enforcement Network (FinCEN). Such entities must implement comprehensive Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) programs, conduct customer identification procedures (KYC), submit Suspicious Activity Reports (SARs), and comply with the Travel Rule, which mandates the transmission of specific information during virtual asset transactions.

 

Beyond FinCEN, several federal agencies exert regulatory authority over different aspects of the cryptocurrency sector. The Securities and Exchange Commission (SEC) treats certain digital assets as securities and enforces compliance with applicable securities laws. The Commodity Futures Trading Commission (CFTC) classifies certain cryptocurrencies, such as Bitcoin, as commodities and oversees derivative markets based on these assets. Additionally, the Office of Foreign Assets Control (OFAC) mandates compliance with US sanctions programs, requiring companies to screen clients and counterparties against designated lists.

 

Overall, US federal policy seeks to integrate cryptocurrencies into the existing financial regulatory framework while prioritizing financial security, investor protection, and the prevention of illicit activities. You can find below aspects of federal regulation in more detail. Note that local regulations may vary from state to state. Therefore, state-level legal requirements should be subject to separate review.

 

 

Who’s the regulator? Key federal agencies regulating crypto in the US
 

 

 

The US has a variety of federal institutions regulating digital assets. The exact institution in charge will depend on whether an asset is a money transmitter, security, or commodity/derivative. The main ones include:

Several government agencies, while not directly regulating digital assets, contribute through related guidelines and initiatives:

    • Department of Justice (DOJ) now concentrates on major criminal activities involving cryptocurrencies, such as terrorism and drug trafficking, rather than regulatory infractions

    • The President’s Working Group (PWG) on Digital Asset Markets is responsible for developing a federal regulatory framework for digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile. It was established in January 2025 and includes heads of key federal agencies like the SEC and CFTC. The PWG on Digital Asset Markets does not have a dedicated public website. However, information about its activities and related reports can be found through various official channels, including the US Department of the Treasury, the White House, and the Securities and Exchange Commission (SEC).

Note: Other Federal authorities can also regulate specific issues related to digital assets. The Internal Revenue Service (IRS) regulates taxation of digital assets, and the Office of the Comptroller of the Currency (OCC) issues guidance allowing banks to custody digital assets and use stablecoins for payments under certain conditions, etc.

 

State-by-state crypto regulation in the US

From New York’s BitLicense to Wyoming’s crypto-friendly laws, state-level regulation in the US is anything but uniform, making location a key factor for crypto platforms and their customers alike.

 

* This list of crypto-friendly and strict states has been created by Sumsub based on our own research, analysis, and subjective judgment. It is intended for informational and general reference purposes only.

  

Crypto-friendly states 

The following states are considered to be more crypto-friendly than others in the US:

    • Wyoming

    • Texas

    • Florida

    • Colorado

    • Ohio

    • Nevada

    • Arizona

    • Illinois

    • Tennessee

    • North Carolina

Strict states: Licensing and operational barriers

While some states foster crypto innovation, others have implemented rigorous regulatory frameworks that pose challenges for digital asset businesses.

    • New York. The New York State Department of Financial Services (NYDFS) requires crypto businesses to obtain a BitLicense. It mandates comprehensive compliance measures, including Know Your Customer (KYC) protocols, capital requirements, and regular reporting. Due to its complexity and cost, the BitLicense has been criticized for stifling innovation.

    • California. Effective July 1, 2026, California’s Digital Financial Assets Law (DFAL) will require crypto companies to get a license from the Department of Financial Protection and Innovation (DFPI). The law imposes strict requirements on digital asset businesses, including stablecoin issuers, and introduces big penalties for non-compliance, such as $100,000 per day for unlicensed activity (e.g., operating a crypto exchange without a DFPI license).

    • New Jersey. The Digital Asset and Blockchain Technology Act mandates that crypto businesses obtain licenses from the New Jersey Department of Banking and Insurance. The act encompasses various activities, including digital asset trading, custody, and storage, and imposes capital and compliance obligations.

    • Connecticut. Connecticut treats virtual currency similarly to fiat currency under its money transmitter licensing laws. Businesses that engage in virtual currency activities must obtain a money transmitter license and adhere to the same regulatory standards as traditional financial institutions.

Who is affected?

At the federal level, several US agencies oversee different aspects of cryptocurrency activities. Each agency’s jurisdiction depends on the nature of the business and the classification of the digital assets. Below is a breakdown by regulatory authority, indicating which businesses are affected, under what circumstances, and what type of registration, license, or compliance is required.

 

 

1. Financial Crimes Enforcement Network (FinCEN)

Regulates businesses involved in the transmission of money, including cryptocurrencies, under the Bank Secrecy Act (BSA).

Affected businesses:

    • Centralized cryptocurrency exchanges (e.g., platforms facilitating crypto-fiat or crypto-crypto trades)

    • Crypto custodians holding user funds

    • Crypto payment processors

    • Custodial wallet providers

When? When a business accepts and transmits value that substitutes for currency or provides money transmission services.

Required authorization: Registration as a Money Services Business (MSB). No formal license issued; instead, registration and adherence to ongoing AML/CFT compliance obligations are mandatory.

 

 

2. Securities and Exchange Commission (SEC)

Regulates businesses dealing with financial instruments classified as securities under US law, including certain digital assets.

Affected businesses:

    • Platforms trading digital assets deemed securities

    • Issuers of tokens that qualify as securities (e.g., security token offerings, some ICOs)

    • Crypto investment advisors and custodians handling security tokens

When? When digital assets meet the Howey Test criteria and are considered “investment contracts” or otherwise qualify as securities.

Required authorization: 

    • Registration of securities offerings (unless qualifying for an exemption such as Regulation D, Regulation S, or Regulation A+).

    • Alternative Trading System (ATS) license for platforms facilitating secondary trading of securities

    • National Securities Exchange license for larger trading venues

    • Investment Adviser registration for firms managing security tokens on behalf of clients

    • Qualified Custodian status for custodians holding securities.

3. Commodity Futures Trading Commission (CFTC)

It regulates businesses involved with commodities and derivatives related to digital assets under the Commodity Exchange Act (CEA).

 

Affected businesses:

    • Platforms offering futures, swaps, or options contracts on cryptocurrencies

    • Entities providing leveraged or margined crypto trading to retail clients

When? 

    • When offering derivatives based on cryptocurrencies (e.g., Bitcoin futures)

    • When retail commodity transactions involve leverage or margin

Required authorization:

    • Registration as a Futures Commission Merchant (FCM) (for platforms facilitating customer futures trading)

    • Registration as a Commodity Pool Operator (CPO) or Commodity Trading Advisor (CTA) if managing pooled crypto investment products

    • Registration as a Swap Dealer if facilitating crypto swaps

US federal crypto licensing and compliance requirements in 2025 

Navigating the US crypto regulatory landscape in 2025 remains complex, with a mix of federal rules and diverse state-level laws. While federal regulations have been rolled back, individual states continue to enforce their own distinct requirements, which impacts how crypto businesses approach licensing and compliance. This means that what’s true in one state may not be true in another, making it essential for crypto companies to stay informed about the different rules.

 

 

Financial Crimes Enforcement Network (FinCEN): Steps to register

    1. Determine MSB status. Confirm that your business qualifies as an MSB under the BSA. If your business transmits funds (e.g., crypto exchanges, custodial wallets, or payment processors), it is likely considered an MSB.

    1. Register with FinCEN:
        1. Complete and file FinCEN Form 107 through the BSA E-Filing System.

        1. Registration must be completed within 180 days of starting MSB activities.

    1. Develop and implement an AML program:
        1. Include written policies, customer due diligence procedures, and independent review protocols.

        1. Appoint a compliance officer.

Securities and Exchange Commission (SEC): Steps to register

    1. For token issuers (securities offerings):
        1. Assess token classification. Apply the Howey Test to determine if your digital asset is a security.

        1. Choose a path. Register with the SEC via Form S-1 (public offering), or use an exemption.

    1. For trading platforms (ATS or exchange):
        1. Apply to register as an ATS:
            1. File Form ATS with the SEC.

            1. Register as a broker-dealer with FINRA (via Form BD).

        1. For a full national securities exchange license. Submit a Form 1 application and follow the SEC rulemaking and approval process.

    1. For investment advisers:
        1. Register via the SEC’s Investment Adviser Registration Depository (IARD).

        1. File Form ADV and establish a compliant business structure.

        1. Maintain ongoing disclosure, recordkeeping, and fiduciary duties.

    1. For custodians:
        1. Apply for Qualified Custodian status if holding digital securities.

        1. Must meet certain standards (e.g., bank or trust company, broker-dealer, or futures commission merchant).

Commodity Futures Trading Commission (CFTC): Steps to register

    1. For FCMs (e.g., futures platforms):
        1. Register with the National Futures Association (NFA):
            1. Submit Form 7-R via the NFA’s ORS portal.

            1. Designate a compliance officer.

            1. Provide proof of capital and operational readiness.

        1. Undergo background checks.

        1. Implement risk controls, AML policies, and financial reporting mechanisms.

    1. For CPOs and CTAs:
        1. Register through the NFA, using Form 7-R (CPO) or Form 8-R (CTA).

        1. Submit a Disclosure Document for approval.

        1. Provide regular financial and investor reports.

    1. For swap dealers:
        1. Determine if swap dealing activity exceeds CFTC thresholds.

        1. Register with the CFTC and NFA.

        1. Establish robust compliance, documentation, and margin procedures.

While federal crypto regulation in the US is complex and evolving, a methodical approach to identifying applicable business activities and following the right registration path will ensure a strong legal foundation. In many cases, registration involves not just filing forms, but also building internal compliance infrastructure that satisfies ongoing regulatory obligations. Please note that in each case, you should check your state regulations and requirements. 

 

 

AML/KYC requirements for US crypto companies in 2025

In 2025, anti-money laundering (AML) and countering the financing of terrorism (CFT) requirements will continue to be a core element of the regulatory framework for cryptocurrency businesses operating in the United States. Crypto companies are classified as financial institutions under BSA and are primarily overseen by the Financial Crimes Enforcement Network (FinCEN).

 

Importantly, AML/CFT obligations are not limited to companies registered as MSBs with FinCEN. Cryptocurrency businesses regulated by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—such as crypto trading platforms handling security tokens, alternative trading systems (ATS), futures commission merchants (FCMs), and swap dealers—must also establish and maintain AML programs in accordance with applicable laws and regulations. These entities are subject to parallel or additional AML compliance obligations under the Securities Exchange Act of 1934, the Commodity Exchange Act (CEA), and associated regulations.

 

What’s next for US crypto regulation?

As of April 2025, the US crypto regulations are significantly changing. The Trump administration is taking a hands-off approach, trying to encourage innovation in the crypto space, though this has sparked some worries about how things will be monitored and enforced. At the same time, Congress is looking into new laws to bring some clarity and organization to the world of digital assets.

 

 

Upcoming federal guidelines and proposals

Several key federal initiatives and proposals are shaping the future of crypto regulation:

    • Stablecoin legislation. Congress is considering two major bills—the revised STABLE Act and the GENIUS Act—aimed at creating a regulatory framework for stablecoins. These bills address reserve requirements, transparency, and oversight mechanisms.

    • SEC and CFTC roundtables. Regulatory bodies like the SEC and CFTC are hosting roundtables to discuss critical issues such as digital asset custody, tokenization, and decentralized finance (DeFi), showing a more collaborative approach to regulation.

Trends shaping the future of crypto compliance in the US

Several emerging trends are influencing the trajectory of crypto compliance:

    • Stablecoin regulation. With the increasing adoption of stablecoins for payments and remittances, regulations are more intensely focused on ensuring their stability, transparency, and compliance with financial laws.

    • Privacy coins scrutiny. Privacy-focused cryptocurrencies are under more scrutiny due to concerns about their potential use in illicit activities, which prompts discussions on implementing stricter AML/KYC measures.

    • Centralized oversight vs. decentralization. The balance between innovation in decentralized platforms and ensuring adequate oversight remains a central debate, which affects policy decisions and regulatory frameworks.

    • Regulatory sandboxes. There is growing interest in setting up regulatory sandboxes that allow for controlled experimentation with new technologies and business models, all the while managing risks.


    • Global regulatory coordination. As digital assets transcend borders, international cooperation among regulators is becoming crucial to address cross-border transactions and enforcement challenges.
 

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