Cryptocurrency regulation is the legal framework that governs how digital assets such as cryptocurrencies operate. It is a rapidly evolving area of the law and regulations are different across nations. Generally, they address anti-money laundering compliance, securities laws, taxation, and consumer protection frameworks.
The US Congress made progress in 2025 towards establishing federal oversight of stablecoin and digital asset markets, with the bipartisan introduced Responsible Financial Innovation Act. The Act outlines a clear regulatory approach that balances innovation with investor protection and financial transparency, while integrating digital assets into existing banking and tax law.
In addition, the CFTC is asserting its authority over the regulation of decentralized blockchain-based assets, whereas the SEC retains authority over those that qualify as securities. The Internal Revenue Service continues to treat digital assets as property, which means that using, selling, or exchanging them may trigger capital gains or losses.
Lastly, state regulators are also active in the space. New York has been a leader in this area, with a comprehensive set of rules that are primarily focused on customer protection. Other states have less robust regulations, but are actively pursuing crypto-related enforcement actions.
The Brookings Center for Internet & Society hosted a roundtable discussion on the current state of cryptocurrency regulation in 2022, with panelists arguing that a lack of defined regulation has contributed to the market’s volatility and high levels of consumer distrust. This has in turn prevented the anticipated benefits of crypto, such as increased financial inclusion, from being realized.