Cryptocurrency Regulations and Laws in the United States

Learn about cryptocurrency regulations in the United States. Understand how federal and state agencies regulate crypto, how it’s taxed by the IRS, and what laws apply to exchanges, ICOs, NFTs, and crypto income.

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The United States has a complex and evolving regulatory environment for cryptocurrencies. While crypto is legal, regulation is fragmented across federal and state agencies, with varying rules depending on the nature of the asset and activity. Taxation applies to both individuals and businesses.

Summary

Cryptocurrencies are legal in the U.S., but regulated differently by multiple agencies, including the SEC, CFTC, IRS, and FinCEN. Whether a digital asset is treated as a security, commodity, or property depends on its characteristics and usage. Exchanges must comply with federal AML laws and often register with state authorities as money transmitters. Taxation applies to all crypto gains and income.

Legal Status

General Use: Legal
Trading: Legal and regulated
Exchanges: Legal; must comply with FinCEN AML laws and state money transmission laws
Mining: Legal
ICOs & Tokens: Permitted; often regulated as securities by the SEC
NFTs: Legal; treatment depends on use (collectible vs. investment)

Taxation

The Internal Revenue Service (IRS) treats cryptocurrency as property. Any time crypto is sold, exchanged, or used to buy goods, it may trigger a taxable event.

Capital Gains Tax: Yes – short-term and long-term capital gains apply
Income Tax on Crypto Earnings: Yes – applies to salaries, staking, mining, and airdrops
Mining Taxation: Yes – income and self-employment taxes apply if done commercially
NFT Taxation: Yes – treated as property; may be taxed differently if categorized as a collectible
Reporting Requirements: Mandatory – crypto transactions must be reported; Form 8949 and Schedule D apply

Regulatory Bodies

Internal Revenue Service (IRS): Handles crypto taxation and reporting
Securities and Exchange Commission (SEC): Regulates crypto tokens considered securities and oversees token sales and some platforms
Commodity Futures Trading Commission (CFTC): Regulates crypto derivatives and classifies Bitcoin and Ether as commodities
Financial Crimes Enforcement Network (FinCEN): Enforces AML/CTF compliance and requires certain businesses to register as Money Services Businesses (MSBs)
Office of the Comptroller of the Currency (OCC): Regulates national banks and has provided crypto custody guidance

Key Regulations & Laws

2014 IRS Notice 2014-21: Designated crypto as property for tax purposes
Bank Secrecy Act (BSA): Requires exchanges and custodians to register with FinCEN and follow AML rules
Howey Test (SEC): Determines whether a token is a security
BitLicense (New York): A strict state-level licensing framework for crypto businesses
Ongoing Federal Legislation: Multiple bills under discussion (e.g., Lummis-Gillibrand Responsible Financial Innovation Act) aim to provide regulatory clarity

Timeline of Regulatory Milestones

Year	Event	Description
2014	IRS guidance	Crypto classified as property for taxation
2015	BitLicense introduced	New York implements first state-level crypto license
2019	FinCEN clarifies MSB rules	Exchanges must register and comply with AML laws
2021	Infrastructure Bill signed	Introduced reporting requirements for brokers
2024	Legislative proposals	Multiple federal bills seek to clarify crypto regulation

Resources

Notes

Travel Tip for Crypto Users: Crypto is accepted by some U.S. merchants and online services. However, use is mainly for investment purposes. Users should be aware of local tax and reporting obligations.
Local Adoption Trends: The U.S. has one of the highest levels of institutional and retail crypto adoption, with a highly active regulatory landscape and growing interest in spot Bitcoin ETFs and stablecoins.
Language Notes: All official documents are in English.