US Intensifies Crypto Regulatory Scrutiny
The regulatory environment in the United States is reportedly tightening as the crypto market enters a critical phase. Lawmakers and federal agencies are ramping up oversight, with new enforcement actions and compliance requirements expected in the coming months. This push could lead to increased costs and new KYC/AML obligations for crypto platforms operating in the U.S.
- The Financial Innovation and Technology for the 21st Century Act (FIT21), which passed the House of Representatives in May 2024, aims to clarify the jurisdictional lines between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill designates the CFTC to regulate digital assets as commodities if their underlying blockchain is functional and decentralized. - In a significant policy shift, the SEC rescinded Staff Accounting Bulletin 121 (SAB 121) in January 2025. This rule had required financial institutions to hold customers' crypto assets on their balance sheets as liabilities, a practice that was seen as a barrier to institutional adoption and custody services. - The "Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act" was signed into law in July 2025, creating a federal framework for stablecoin issuers that includes requirements for full 1:1 reserve backing and mandatory audits. Following its passage, the Treasury Department began soliciting public input on potential regulations concerning AML/sanctions compliance and the balance between state and federal oversight. - The Financial Crimes Enforcement Network (FinCEN) continues to classify most crypto businesses as Money Services Businesses (MSBs), which mandates strict AML programs and Know Your Customer (KYC) procedures. Proposals have been made for new rules requiring the reporting of crypto transactions over $3,000 to combat illicit activities. - Under the new leadership of Chair Paul Atkins, the SEC launched "Project Crypto" in July 2025 to modernize its digital asset framework. However, the agency has faced criticism from some lawmakers for a perceived 60% decline in crypto-related enforcement actions and the dismissal of high-profile cases. - An executive order issued in January 2025 established a "Presidential Working Group on Digital Asset Markets" to review existing crypto regulations. The order also prohibited federal agencies from creating a central bank digital currency (CBDC) without explicit congressional approval, citing privacy concerns.
