Cryptocurrency regulation focuses on rules and laws that govern how crypto is used and structured. It includes chartering, licensing, fraud and financial crimes risks, investor and consumer protections, and taxation frameworks. Regulatory treatment of cryptocurrency and blockchain technologies varies across jurisdictions. Depending on the structure and underlying facts and circumstances, multiple federal and state regulators may have jurisdiction over a given transaction. This creates gaps and overlaps, which are being addressed by a number of legislative and regulatory initiatives.

For example, the United States’ Commodity Futures Trading Commission (CFTC) has primary authority over digital commodities – blockchain-based assets that are not securities – while the Securities and Exchange Commission retains responsibility for those that qualify as securities. Other global jurisdictions are addressing crypto regulation in similar ways. The European Union’s MiCA, for example, regulates crypto exchanges and custodial wallet providers through a set of rules that aims to support innovation while ensuring transparency and consumer protection.

The Biden Administration is also taking steps to address risks stemming from the growth of digital assets and blockchain technology while encouraging responsible innovation. For example, in 2022, Governor Gavin Newsom signed an Executive Order that establishes a task force to develop an appropriate approach to digital asset and blockchain regulation in the United States. In addition, a variety of high-profile legislation is under consideration, such as the GENIUS Act and CLARITY bills, which would define how digital assets should be treated under federal securities and commodities laws.