Key Takeaways
- U.S. Congress established the first cohesive legal framework for digital assets on July 17, 2025.
- The GENIUS Act defined digital assets and recognized decentralization as a valid compliance endpoint.
- The CLARITY Act created regulatory lanes for mature blockchains and compliant token fundraising.
- The Anti-CBDC Act blocked retail CBDCs and encouraged privacy-preserving, market-driven digital dollar alternatives.
Bitcoin launched in 2009 following the publication of Satoshi Nakamoto’s white paper titled ‘A Peer-to-Peer Electronic Cash System’ and the release of its open-source code, without any legal or regulatory framework in place.
For years, Bitcoin existed in a legal void as innovation accelerated and federal agencies were slow to respond.
The absence of clear laws led to conflicting guidance, enforcement uncertainty and regulatory overreach. Developers kept building, but faced unclear rules. Agencies competed for control and investors were left exposed to risks without consistent protections.
This article describes how the United States went from that early legal ambiguity to the formal legislative structure, established on July 17, 2025, with the GENIUS, CLARITY, and Anti-CBDC Acts passed by the House. These three laws represent U.S. history’s first cohesive framework for digital assets.
2009–2013: Crypto Regulation Ambiguity & Early Innovation
Bitcoin’s early years, from 2009 to 2012, were marked by experimentation and legal uncertainty. With no regulatory classification Bitcoin was operating outside traditional financial laws.
In February 2011, Silk Road launched as a dark web marketplace using Bitcoin for anonymous transactions and purchasing illegal goods. The case highlighted Bitcoin’s use in online transactions and contributed to early discussions around the need for regulatory clarity in digital asset markets.
That shift began on March 18, 2013, when the Financial Crimes Enforcement Network (FinCEN) issued guidance applying money transmission rules to crypto exchanges. The guidance clarified:
- Who was covered: Exchanges and custodial wallet providers were classified as money transmitters.
- Required compliance: These entities had to register as Money Services Businesses (MSBs) and implement AML programs, filing Suspicious Activity Reports.
- Who was exempt: Personal users and miners, so long as they didn’t exchange or transmit crypto on behalf of others, were exempt.
FinCEN marked the first formal federal guidance on regulating digital assets, but left broader questions unanswered.
2014–2020: Fragmentation & Regulatory Drift
As Bitcoin gained mainstream attention, Ethereum was launched on July 30, 2015 and the digital asset market expanded. Token issuance expanded rapidly with billions of dollars raised during the 2017 Initial Coin Offering (ICO) boom.
Startups bypassed traditional fundraising methods by selling tokens directly to the public, often without legal review or investor safeguards.
Without a coherent regulatory framework, the market became vulnerable to legal uncertainty, inconsistent enforcement, and investor exposure to unvetted projects. In the context of the 2017 ICO boom, many startups sold tokens:
- Without registering with regulators like the SEC,
- Without disclosing risks or project details,
- Without having a working product or a viable roadmap.
2014–2017: Crypto Regulatory Assertions Without Legislation
On December 10, 2014, CFTC Chairman Timothy Massad testified before the U.S. Senate that Bitcoin qualifies as a commodity under the Commodity Exchange Act (CEA). While not a formal rule, Massad’s testimony laid the groundwork for future oversight.
CFTC Classifies Bitcoin as a Commodity in Coinflip Case
On September 17, 2015, the CFTC settled charges with Coinflip Inc., an unregistered platform offering Bitcoin options contracts.
- In the enforcement order, the CFTC formally declared that Bitcoin and other virtual currencies are “commodities” under Section 1a(9) of the Commodity Exchange Act (CEA). This established CFTC jurisdiction over crypto derivatives like futures and options, but not over spot markets or token sales.
- The Coinflip ruling marked the first time a U.S. federal agency formally defined Bitcoin as a commodity, laying a legal foundation for derivatives oversight.
- Yet, the ruling was only the beginning of a fragmented regulatory approach that left major gaps in how digital assets were governed.
The SEC’s DAO Report: A Turning Point for Token Classification
On July 25, 2017, the U.S. SEC published its Report of Investigation into The DAO, a decentralized investment vehicle built on the Ethereum blockchain.
- The report examined how DAO tokens were marketed and sold to the public during a 2016 crowdfunding campaign that raised over $150 million worth of ETH.
- While Ethereum was not the investigation’s subject, the SEC concluded that DAO tokens qualified as securities under the Howey Test, a legal standard used to determine whether an asset constitutes an “investment contract.” The DAO’s investors had pooled funds with the expectation of profits from the efforts of a third party, meeting the Howey criteria.
- This interpretation did not declare Ether a security, but it sent a strong signal that many ICOs were likely violating U.S. securities laws by selling unregistered investment contracts to the public without qualifying for exemptions.
Fragmented Crypto Regulation: How US Agencies Diverged on Digital Asset Oversight
Despite this clear enforcement warning, no comprehensive legislation or unified regulatory framework followed. Instead, agencies continued to operate in parallel:
- SEC: Treated most ICO tokens as unregistered securities based on the Howey Test. However, Bitcoin was left outside the SEC’s focus during this period.
- CFTC: Asserted jurisdiction over crypto futures and derivatives, following its earlier classification of Bitcoin as a commodity but not over token sales or spot trading.
- FinCEN: Applied Bank Secrecy Act obligations, such as AML and registration requirements, to “exchangers” and “administrators,” while offering little clarity on decentralized protocols.
- US States: Enforced inconsistent money transmitter licensing laws, most notably New York’s BitLicense, which took effect on August 8, 2015. This license introduced the VOLT initiative, focusing on Vision (maintaining leadership in crypto regulation), Operations (improving processes and transparency), Leadership (strengthening policy and talent), and Technology (streamlining oversight through digital tools).
However, in early July 2025, Coinbase made Subsquid (SQD), Celestia (TIA), XYO, and Bittensor (TAO) available to New York investors, signaling regulatory progress under BitLicense. These tokens unlock access to modular blockchains, Web3 data, geolocation, and decentralized AI, offering new opportunities for builders, investors, and developers in one of the most regulated crypto markets in the U.S.
From 2014 to 2027, persistent regulatory ambiguity stifled innovation and drove many legitimate crypto projects to seek clarity in more welcoming jurisdictions. In the absence of coordinated federal guidance, the U.S. risked falling behind in the global race to shape the future of digital assets.
2021–2024: Enforcement First, Clarity Later
When Gary Gensler took over as SEC Chair on April 17, 2021, the agency intensified its regulatory posture. Gensler publicly stated that the “vast majority” of crypto tokens qualified as unregistered securities under the Howey Test. Enforcement followed quickly.
Crypto Enforcement Ramped Up While U.S. Rules Remained Unclear
The SEC launched high-profile lawsuits against major platforms, including Coinbase (June 6, 2023, Ripple (December 22, 2023) and Kraken (November 20, 2023).
These actions stemmed from the agency’s interpretation that most crypto tokens qualified as unregistered securities under the Howey Test. During this period:
- SEC enforcement surged: Lawsuits targeted key platforms like Coinbase, Ripple, and Kraken.
- Howey Test applied broadly: Most tokens were treated as unregistered securities by the SEC.
- Court rulings diverged: Some judges sided with the SEC, others questioned the SEC’s jurisdiction.
- CFTC held to derivatives: The agency asserted control over crypto futures and leveraged trading only.
- Congress introduced bills: Hearings were held, but no comprehensive law was passed.
- The executive order lacked force: Biden’s 2022 directive encouraged coordination but had no binding power.
Despite aggressive enforcement, the U.S. failed to define clear rules for digital assets.
Bitcoin ETF Breakthrough in Early 2024
Between 2013 and 2023, the SEC rejected or delayed over 20 applications for a spot Bitcoin ETF, citing concerns about market manipulation, surveillance and investor protection.
High-profile denials included proposals from Winklevoss, Bitwise, VanEck, Grayscale, and others.
However, on January 10, 2024, the SEC approved 11 spot Bitcoin ETFs after rejecting more than 20 applications since 2018, marking a decisive shift in U.S. crypto policy.
Why Bitcoin ETFs Approval mattered
- Symbolic acknowledgment: The approval acted as de facto recognition of Bitcoin’s status as a commodity, legitimizing a path for regulated, compliant crypto investment products.
- Institutional alignment: ETFs from firms like BlackRock, Fidelity, Grayscale and VanEck began trading, signaling serious Wall Street trust and potentially reversing industry talent flight
After a decade of enforcement-first policymaking, the tide began to turn. The January 10, 2024 approval of spot Bitcoin ETFs showed that U.S. regulators were finally willing to adapt.
Yet, it wasn’t until 2025 that Congress caught up, delivering a legislative breakthrough with the passage of the GENIUS, CLARITY, and Anti-CBDC Acts on July 17, 2025.
US Crypto Regulations in 2025: GENIUS Act, CLARITY Act & Anti-CBDC Bills Passed by the House
The 2024 elections brought in a Congress more supportive of Bitcoin and crypto’s fundamental principles. On July 17, 2025, Congress passed three landmark bills, the GENIUS Act, the CLARITY Act, and the Anti-CBDC Surveillance State Act, establishing the first comprehensive federal framework for digital assets in the United States.
GENIUS Act (Regulation for Stablecoins)
The GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act) is the first-ever federal legislation to regulate stablecoins in the United States.
Passed by the House on July 17, 2025, after a strong bipartisan vote and previously approved by the Senate, the Act creates a clear legal framework for the issuance, backing, and oversight of payment stablecoins. It introduces rules for who can issue stablecoins, mandates full 1:1 backing with liquid assets, and enforces regular disclosures and audits. The Act is expected to bring stability, trust, and regulatory clarity to a fast-growing $250+ billion market.
By moving stablecoins out of legal uncertainty and into a structured compliance regime, the GENIUS Act is seen as a turning point for crypto and fintech integration. It opens the door for traditional financial institutions, fintechs and tech giants to explore stablecoin use cases with regulatory confidence. Supporters argue the legislation will encourage innovation in digital payments while protecting consumers through strict oversight and transparency requirements.
CLARITY Act (SEC vs. CFTC Oversight)
Passed alongside the GENIUS Act on July 17, 2025, the CLARITY Act answered a long-standing demand from industry stakeholders being a clear regulatory lane for digital commodities.
Rather than regulating all tokens as securities, the Act carved out a framework for blockchains that achieve a certain level of decentralization and economic transparency, offering practical compliance routes without stifling protocol development.
The Act outlines:
- CFTC authority: Gave the CFTC primary oversight over digital commodities and derivative-linked assets, affirming its role in supervising non-security tokens and crypto futures markets.
- Maturity standards: Defined “mature blockchains” as networks that meet three key criteria (1) decentralized governance (2) less than 20% insider token ownership and (3) demonstrated protocol-level economic utility, qualifying them for reduced regulatory oversight and streamlined compliance. A blockchain must meet all three criteria to be classified as a “mature blockchain.”
- Token fundraising: Under CLARITY, if crypto project teams or developers follow the law’s rules, such as clearly disclosing things like token supply, governance mechanics, economic models on-chain, they can raise up to $75 million without registering the token offering as a security with the U.S. SEC.
- Operational carveouts: The CLARITY Act exempts decentralized validators, miners and node operators from registering as money transmitters or broker-dealers, provided they are not involved in fraud or illegal activity. Protecting core infrastructure participants from unnecessary regulatory burdens.
- Exchange compliance: Required all Digital Commodity Exchanges (DCEs) to register with the CFTC and disclose blockchain-specific details such as governance incentives, economic mechanics and market surveillance protocols.
The CLARITY Act established a structured digital commodities framework, outlining maturity, transparency and oversight criteria.
CLARITY provides developers and exchanges with more straightforward operational guidelines while equipping regulators to address market manipulation and fraud. The Act shifted from regulatory uncertainty to a more defined compliance environment.
Anti-CBDC Surveillance State Act
The third piece of legislation passed on July 17, 2025, the Anti-CBDC Surveillance State Act, marked a decisive rejection of government-controlled digital currencies at the retail level. The Anti-CBDC Surveillance State Act has formalized privacy protections and set strict boundaries on the Federal Reserve’s role in issuing programmable money.
- CBDC prohibition: Banned the Federal Reserve from issuing, piloting or testing a retail central bank digital currency (CBDC), preempting any future rollout of state-controlled digital cash.
- Private sector firewall: Prevented commercial banks, fintech firms, or payment processors from distributing CBDCs on behalf of the government, eliminating the possibility of indirect issuance.
- Privacy protections: Outlawed the use of CBDCs as instruments for behavioral control, monetary manipulation or financial surveillance of citizens, anchoring digital finance in individual autonomy.
By drawing a hard line against retail CBDCs, the Act aimed to preserve financial privacy and protect market-driven innovation from excessive state involvement.
Why 2025 Matters: Crypto Regulation Finally Has a Framework
The year 2025 marks a major shift in how the U.S. handles digital assets. For the first time, crypto has real legal guardrails. With the passage of the GENIUS Act (for stablecoins) and the CLARITY Act (for broader digital assets), lawmakers have laid the foundation for how cryptocurrencies can operate under federal law.
This means stablecoins must now be fully backed, transparent, and licensed. Meanwhile, decentralized blockchain networks finally have a path to be recognized as digital commodities, not automatically treated like securities.
The result? Clearer rules, more trust, and a legal green light for innovation.
What Could Come Next?
- More institutional adoption: Now that stablecoins and digital tokens have clearer rules, expect more banks, payment processors and fintechs to build crypto-based services.
- New token offerings with guardrails: Projects may begin launching tokens under the CLARITY Act’s $75M safe harbor, legally and transparently.
- A national licensing system: Lawmakers could push for unified federal licensing for crypto exchanges and custodians, reducing reliance on state-by-state rules.
- Tax clarity for crypto users: The White House has announced support for removing capital gains tax on Bitcoin and other cryptocurrencies, aiming to ease everyday crypto use and boost innovation. If enacted, the policy could spark wider adoption, attract new investors, and strengthen the U.S. position in global digital finance. Future bills may address how small transactions, staking, and DeFi income will be taxed.
- Greater global influence: As the U.S. sets clear digital asset rules, other countries may align or compete, pushing international crypto standards forward.
Conclusion
Crypto’s legal evolution in the United States has been slow, uneven, and often contradictory. From early agency guidance to high-profile lawsuits and stalled legislation, digital assets operated in a gray zone for long.
The passage of the GENIUS, CLARITY, and Anti-CBDC Acts of 2025 marks a new era of global acceptance. These laws don’t end debate, but they shift the baseline. The legislation moves the U.S. from improvisation to infrastructure, from ambiguity to accountability.
After 17 years of regulatory uncertainty, the GENIUS, CLARITY and Anti-CBDC Acts made crypto legally recognizable, decentralized-compliant and insulated from retail government money.
FAQs
A 2025 law that defines digital assets as a new legal category, mandates developer disclosures and prevents insider conflicts among federal regulators involved in crypto oversight.
It gives the CFTC clear authority over digital commodities, outlines compliance paths for decentralized projects, allows limited fundraising without SEC registration and exempts validators and miners from burdensome licensing requirements.
A law that prohibits the Federal Reserve from issuing or piloting a retail central bank digital currency, reinforcing financial privacy and supporting decentralized alternatives to state-controlled money.
No, under the CLARITY Act, decentralized validators, miners and node operators are exempt from registration requirements, unless involved in fraud or illicit activity.
Andrew Kamsky is a chart analyst and writer with a background in economics and ACCA certification. He has held roles at a Big Four firm, a fintech bank, and a listed bank specializing in currency hedging. His work explores Bitcoin, macro trends, and market structure. Outside finance, he's passionate about music, travel, and neon design.
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