Bitcoin existed for five years before regulators defined it. The SEC filed 46 crypto enforcement actions in 2023. The GENIUS Act changed crypto regulation.
When Satoshi Nakamoto published the Bitcoin whitepaper in October 2008, crypto regulation did not exist. No regulator anywhere in the world had a framework for what Bitcoin was. It was not a currency because no government had issued it. Nor was it a security because no company backed it. It was not a recognized commodity. Instead, it was something entirely new, built to operate outside the existing financial system, and its creators had no intention of asking permission.
That ambiguity was intentional on Bitcoin’s part and genuinely confusing for regulators. As a result, it defined the first decade of crypto’s relationship with governments. The same qualities that attracted early adopters also made Bitcoin difficult to classify, tax, and regulate. At the same time, they made it useful for criminal activity. Consequently, governments responded at different speeds and reached different conclusions about the same technology.
Fifteen Years Later
Fifteen years later, governments have established formal regulatory frameworks in more than 100 countries. The GENIUS Act became law in the United States in 2025. Meanwhile, MiCA reached full enforcement across the European Union in December 2024. Then, in March 2026, the SEC and CFTC issued joint guidance that classified Bitcoin, Ethereum, and Solana as digital commodities for the first time. Those frameworks emerged after years of uncertainty, conflicting interpretations, court decisions, and policy debates. To understand how regulation reached this point, it helps to look at how regulators approached crypto from the beginning, including the mistakes they made, the uncertainty they created, and the events that finally pushed regulation in a different direction.
This article covers every major regulatory development, the countries that defined the global conversation, the lawsuits that changed crypto law, where regulation stands in mid-2026, and the questions that remain unresolved.
The Legal Vacuum: Bitcoin’s First Years (2009–2012)
For the first three years of Bitcoin’s existence, regulators paid little attention to it. Bitcoin’s total market capitalization in 2010, the year it first received mainstream coverage, was measured in millions of dollars. The Financial Crimes Enforcement Network (FinCEN), the SEC, the CFTC, and the IRS all had other priorities. A peer-to-peer digital currency used mainly by technologists did not appear to require immediate regulatory action.
The lack of regulation did not eliminate legal risk. The Bank Secrecy Act of 1970 required money services businesses to register with FinCEN and maintain anti-money laundering programs. These businesses transfer value between parties. No regulator had formally determined if Bitcoin exchanges qualified as money services businesses. Bitcoin moved between parties in ways that resembled money transmission. Yet exchanges operated without the licenses required of banks or traditional money transfer services.
The early Bitcoin community operated in that legal gap with a mix of deliberate avoidance and genuine uncertainty about the rules. By 2013, Mt. Gox had become the world’s largest Bitcoin exchange. For much of its existence, it operated as a money services business without FinCEN registration. That compliance failure later contributed to its legal problems, although it did not cause the exchange’s collapse. The regulatory vacuum helped the early market grow. It also concentrated risk in unregulated intermediaries, a weakness that eventually cost hundreds of thousands of people their money.
The First Definitions: FinCEN and the MSB Framework (2013)
March 18, 2013
FinCEN Issues Its First Guidance on Virtual Currencies
The first regulatory definition of crypto in the United States came from the Financial Crimes Enforcement Network (FinCEN), the Treasury bureau responsible for anti-money laundering compliance, not the SEC or the CFTC. On March 18, 2013, FinCEN published guidance explaining how the Bank Secrecy Act applied to “persons creating, obtaining, distributing, exchanging, accepting, or transmitting virtual currencies.”
The guidance created three categories. Users, individuals who obtained virtual currency to purchase goods or services, were not money services businesses and did not have to register. Exchangers, entities that exchanged virtual currency for real currency or other virtual currencies, qualified as money services businesses and had to register with FinCEN, maintain AML programs, and file suspicious activity reports. Likewise, administrators, entities that issued virtual currency and could redeem it, also qualified as money services businesses.
The FinCEN guidance did not create a comprehensive regulatory framework. It did not answer the SEC’s question of whether crypto tokens were securities, the CFTC’s question of whether they were commodities, or the IRS’s question of how they should be taxed. However, it answered one question that had remained unresolved: Did Bitcoin exchanges need to register with federal authorities? They did. As a result, Mt. Gox registered with FinCEN in June 2013, several months after the guidance and more than two years after the exchange began operating.
The 2013 guidance also introduced an interpretive framework that later applied to token issuers during the ICO boom. Regulators examined whether a token issuer qualified as an “administrator” with redemption authority and therefore operated as a money services business with regulatory obligations. That issue did not become urgent for another four years. Even so, the legal framework for answering it began here.
The IRS Enters Crypto Regulation (2014)
March 25, 2014
IRS Notice 2014-21: Bitcoin Is Property for Tax Purposes
The Internal Revenue Service issued its first guidance on virtual currency in March 2014. It concluded that Bitcoin and similar virtual currencies are property, not currency, for federal tax purposes. That decision still defines how the IRS taxes crypto today.
The ruling changed how every crypto transaction is taxed. Because Bitcoin is property rather than currency, every purchase, sale, or exchange of one cryptocurrency for another is a taxable event that may generate capital gains or losses. For example, someone who buys coffee with Bitcoin has sold property and must calculate any capital gain or loss based on the difference between the purchase price and the asset’s fair market value at the time of the transaction.
Treating Bitcoin as property also created compliance challenges not present in traditional currency transactions. Taxpayers had to track the cost basis of every Bitcoin purchase across potentially thousands of transactions, exchanges, and wallets. The existing tax system was not designed for that level of recordkeeping. Even in 2026, many crypto participants still over- or under-report their tax obligations, usually due to complexity rather than deliberate tax evasion.
The IRS’s property classification also affects crypto-to-crypto exchanges. Swapping Bitcoin for Ethereum is not a tax-free currency exchange. Instead, it is the sale of one asset and the purchase of another, with capital gains or losses recognized on the sale. As a result, a DeFi user who swaps tokens thousands of times in a single year may also have thousands of taxable transactions to document.
The CFTC’s Commodity Claim: Bitcoin as a Commodity (2015)
While the IRS classified Bitcoin as property and FinCEN treated exchanges as money services businesses, the Commodity Futures Trading Commission (CFTC) was advancing its own role in crypto regulation. In September 2015, the CFTC settled charges against Coinflip Inc., an unregistered platform offering Bitcoin options contracts. As part of the enforcement order, the agency formally declared that Bitcoin and other virtual currencies are “commodities” under Section 1a(9) of the Commodity Exchange Act. That decision placed crypto derivatives, including futures and options, under CFTC oversight. However, it did not extend to spot markets or token sales.
The commodity classification had two major consequences. First, it gave the CFTC clear authority over Bitcoin derivatives, including futures, options, and swaps. That decision later supported the launch of CME Bitcoin futures in December 2017 and the growth of the institutional derivatives market. Second, it created a jurisdictional conflict with the SEC that lasted for nearly a decade. If Bitcoin was a commodity under the CFTC’s authority, what were other crypto tokens? Securities under the SEC? Commodities? Or an entirely new asset class?
That question became one of the defining issues in crypto regulation during the ICO era. It also became a major source of regulatory uncertainty, slowing institutional adoption through 2024.
The Howey Test and the ICO Era (2017)
July 25, 2017
The SEC’s DAO Report: Most ICO Tokens Are Securities
The SEC responded to the ICO boom with an investigative report rather than a lawsuit. On July 25, 2017, the commission published its report on The DAO, the Ethereum-based investment vehicle that was hacked in 2016, as documented in our crypto hacks research. The report did not charge anyone with securities violations. It provided the legal framework the SEC would later rely on in crypto regulation to pursue thousands of token projects.
The Howey Test, derived from the 1946 Supreme Court case SEC v. W.J. Howey Co., defines a security as an investment of money in a common enterprise with a reasonable expectation of profits derived primarily from the efforts of others. The SEC applied that test to DAO tokens and concluded they met the definition. Investors purchased DAO tokens with ETH and participated in a common enterprise through the DAO’s collective investment activities. They expected profits and relied on the efforts of the DAO’s curators and developers.
The Framework for Future Enforcement
The report left little room for doubt. However, its immediate impact was limited because the SEC chose not to bring enforcement action against anyone connected to The DAO. The warning was unmistakable. ICO tokens with characteristics similar to The DAO could qualify as securities. Selling them without registration could violate federal securities laws. Even so, the ICO boom continued at full speed. Hundreds of projects raised billions of dollars through token sales. The SEC had already concluded that many of those offerings likely violated federal securities laws.
The enforcement wave arrived later. Between 2018 and 2021, the SEC pursued dozens of ICO projects that had raised money during the boom. Many settlements returned hundreds of millions of dollars to investors. One of the largest cases involved Telegram. In 2020, the company agreed to return $1.2 billion to investors and pay an $18.5 million civil penalty. The settlement followed a $1.7 billion sale of TON tokens and an SEC emergency restraining order.
China’s Ban and the Global Divergence (2017–2021)
While the United States debated how existing securities laws applied to digital assets, China took a more direct approach to crypto regulation. In September 2017, the People’s Bank of China banned initial coin offerings (ICOs) and ordered domestic crypto exchanges to cease operations. Four years later, in September 2021, China expanded the restrictions to cover all cryptocurrency trading and mining activities. It remains the most comprehensive national ban adopted by a major economy.
China’s policy was not driven solely by investor protection. Policymakers were also concerned that cryptocurrencies could bypass the country’s capital controls by allowing money to move abroad outside the traditional financial system. Environmental concerns also played a role, particularly because Bitcoin mining consumed large amounts of electricity in regions that relied heavily on coal. Those concerns were legitimate. However, China chose a comprehensive ban instead of a regulatory framework, a path that most major economies did not follow.
The Global Divide in Crypto Regulation
China’s decision reshaped the Bitcoin mining industry. Before the ban, the country accounted for an estimated 65% to 75% of the global Bitcoin hash rate. When miners were forced to shut down or relocate, the network’s hash rate fell by about 50% before recovering over the following months. Mining operations gradually moved to Kazakhstan, the United States, and other countries. As documented in our Bitcoin halving research, the industry has since become more concentrated in politically stable jurisdictions.
At the same time, other countries were moving in the opposite direction. Japan recognized Bitcoin as a legal method of payment in 2017 and introduced exchange licensing requirements. South Korea required real-name verification for crypto trading accounts. Switzerland’s Crypto Valley in Zug became a hub for blockchain companies seeking regulatory certainty. Singapore introduced a licensing framework for digital payment token services. Meanwhile, the European Union began the legislative process that eventually produced MiCA. The United States, by contrast, continued debating the respective roles of the SEC and the CFTC.
By 2021, more than 100 countries had adopted some form of crypto regulation, ranging from comprehensive licensing regimes to tax guidance. Only a small number maintained outright bans. The result was a global patchwork of regulatory approaches that made international compliance far more challenging for crypto businesses.
The Gensler Era: Crypto Regulation by Enforcement (2021–2024)
April 2021 – January 2025
Gary Gensler’s SEC and the Most Aggressive Crypto Enforcement Period in US History
When Gary Gensler became SEC Chair in April 2021, much of the crypto industry was optimistic. Gensler had taught blockchain and digital currency courses at MIT and understood the technology. He had also testified before Congress on crypto regulation in ways that showed a deep understanding of the industry.
Regulation Through Enforcement
The optimism did not last. Instead of issuing new rules, the SEC relied on enforcement actions to define its approach to crypto regulation. The agency argued that existing securities laws, particularly the Howey Test, already applied to most crypto assets. From the SEC’s perspective, projects were not operating in genuine regulatory uncertainty. They were choosing not to comply with laws that already existed.
That approach produced the most aggressive enforcement period in the SEC’s history. In 2023 alone, the agency filed 46 crypto enforcement actions. It sued major exchanges, token issuers, and smaller projects while maintaining that many crypto assets, potentially including Ethereum, qualified as securities.
Major Enforcement Cases
The Ripple case was the most important lawsuit of the Gensler era. Although it was filed in December 2020 under the previous SEC chair, it was pursued aggressively during Gensler’s tenure. The SEC alleged that Ripple had conducted an unregistered securities offering by selling XRP and raising more than $1.3 billion. The lawsuit prompted several US exchanges to delist or suspend XRP trading and created years of legal uncertainty.
In July 2023, Judge Analisa Torres issued a split ruling that became one of the most important decisions in crypto regulation. The court found that Ripple’s programmatic XRP sales on public exchanges were not securities offerings because buyers could not reasonably rely on Ripple’s efforts for profit. However, Ripple’s institutional sales qualified as securities offerings because those investors purchased directly from the company with that expectation.
The same asset received different legal treatment depending on how it was sold. That principle became one of the most important legal outcomes of the case. Ripple settled with the SEC in 2024 and agreed to pay a $125 million civil penalty.
Expanding Enforcement
The SEC also sued Coinbase in June 2023, alleging that the company operated as an unregistered securities exchange, broker, and clearing agency. Coinbase disputed the claims, arguing that the assets listed on its platform were not securities and that the SEC was attempting to expand its authority beyond existing law. Because the lawsuit challenged the SEC’s authority over crypto trading platforms, it became one of the industry’s most closely watched cases. The dispute was resolved in early 2025 as Gensler’s tenure came to an end.
The Binance lawsuit, also filed in June 2023, extended beyond securities law. The SEC alleged regulatory violations, unlicensed operations, and the mixing of customer funds with company funds. In November 2023, Binance settled with US authorities, agreeing to pay $4.3 billion in penalties and accept ongoing compliance requirements. CEO Changpeng Zhao also pleaded guilty to failing to maintain an effective anti-money laundering program and resigned as part of the settlement.
46
SEC crypto enforcement actions filed in 2023 alone, the peak of the Gensler era
Between 2013 and 2023, the SEC rejected or delayed more than 20 applications for a spot Bitcoin ETF, as documented in our Bitcoin ETF research. Combined with its aggressive enforcement strategy, those decisions created what many industry participants described as “regulation by enforcement.” Instead of publishing clear standards, the SEC communicated its expectations through investigations, lawsuits, and settlements.
Europe Takes a Different Path: MiCA (2020–2024)
While the United States relied on enforcement, the European Union chose legislation to regulate crypto markets. The Markets in Crypto-Assets Regulation (MiCA) was proposed by the European Commission in September 2020. It then went through more than three years of negotiations and amendments before becoming fully applicable in December 2024.
MiCA reaches further than the current US framework. It establishes rules for three categories of crypto assets: asset-referenced tokens, e-money tokens, and other crypto assets, including utility tokens. It also introduced licensing requirements for Crypto-Asset Service Providers (CASPs). A license issued in one EU member state allows a CASP to operate across all 27 member states through a passporting system.
MiCA also changed how crypto businesses operated in the European Union. By 2026, roughly 130 to 140 licensed CASPs were operating under the same cross-border rules. Stablecoin issuers also faced an early test. Circle’s USDC met MiCA’s requirements and retained access to the European market. Tether’s USDT did not initially achieve compliance and faced potential trading restrictions in the EU by July 2026. That raised questions about the future of the world’s largest stablecoin in one of its largest markets.
MiCA does not regulate every part of the crypto industry. DeFi protocols remain outside its scope because they generally lack the identifiable legal entities required for licensing. Most non-fungible tokens (NFTs) are also excluded. Questions also persist over the boundary between crypto assets covered by MiCA and those already regulated under existing securities laws.
Even before MiCA completed its first year of full application, European policymakers were discussing its next phase. Work on MiCA 2 has already begun, with public consultations expected to address areas left outside the original framework.
The Grayscale Ruling and the ETF Breakthrough (2023–2024)
The most important development in crypto regulation for Bitcoin’s market structure did not come from a new law or another SEC enforcement action. It came from a court ruling that found the SEC’s reasoning inconsistent and forced the commission to reconsider a decision it had defended for more than a decade.
As documented in our Bitcoin ETF research, the US Court of Appeals for the DC Circuit ruled in August 2023 that the SEC’s rejection of Grayscale Investments’ application to convert GBTC into a spot Bitcoin ETF was “arbitrary and capricious.” The court found that the SEC had failed to explain why it approved Bitcoin futures ETFs in 2021 while continuing to reject spot Bitcoin ETFs, even though both relied on the same underlying market.
The ruling did not require the SEC to approve a spot Bitcoin ETF. It required the commission to review its decision using a consistent legal standard. Facing the court’s decision, the SEC approved 11 spot Bitcoin ETFs on January 10, 2024.
SEC Chair Gary Gensler said the approval did not change the agency’s position on Bitcoin. Instead, he described it as the most sustainable path forward after the court’s ruling, not an endorsement of Bitcoin as an investment.
The market response was immediate. As documented in our Bitcoin ETF research, cumulative net inflows have exceeded $58.72 billion since the ETFs launched. After more than a decade of rejections, the approval became one of the biggest demand catalysts in Bitcoin’s history.
The Pivot from Enforcement to Frameworks (2025–2026)
July 18, 2025
The GENIUS Act Becomes Law: The First Federal Crypto Law in US History
The Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act passed the US Senate by a vote of 68-30 and the House by 308-122 before becoming law on July 18, 2025. It became the first federal law written specifically for crypto assets in US history.
The GENIUS Act established the first federal rules for stablecoin issuers in the United States. It requires reserve backing, issuer licensing, and restrictions on interest payments. Issuers must maintain reserves equal to 100% of outstanding stablecoins in high-quality liquid assets, primarily US Treasury bills and cash. Issuers with more than $10 billion in outstanding stablecoins are supervised by the Federal Reserve. Smaller issuers may operate under state regulatory systems that meet federal minimum standards.
The law passed with strong support in Congress. Sixty-eight votes in the Senate is a strong majority for legislation in a chamber where many bills struggle to reach 60 votes. Lawmakers recognized that stablecoins had become too important to leave without federal rules. The US dollar accounts for about 99% of the global stablecoin market, with USDT and USDC processing most stablecoin transactions worldwide. Operating that infrastructure without a federal legal framework had become difficult from both a financial stability and a competitiveness perspective.
The GENIUS Act gave the United States its first federal crypto law. The SEC-CFTC Memorandum of Understanding, signed on March 11, 2026, added joint regulatory guidance for digital assets. By 2026, more than 103 countries had adopted formal crypto regulation.
March 17, 2026
SEC-CFTC Joint Guidance: Bitcoin, Ethereum, and Solana Are Digital Commodities
The SEC and CFTC issued joint interpretive guidance on March 17, 2026, answering a question that had defined US crypto regulation for nearly a decade: which regulator oversees which crypto assets? The guidance grouped crypto assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. It identified Bitcoin, Ethereum, Solana, XRP, and Chainlink as digital commodities. It also replaced years of case-by-case enforcement with published classifications.
Five Categories of Crypto Assets
The guidance introduced the first official classification system for crypto assets by major US regulators. Digital commodities, including Bitcoin, Ethereum, Solana, XRP, and Chainlink, fall under CFTC oversight for derivatives and spot market surveillance but are not subject to SEC securities registration requirements. Digital securities that meet the Howey Test continue to fall under SEC oversight. Stablecoins are regulated under the GENIUS Act. Digital collectibles, including NFTs, and digital tools are covered by separate guidance.
A New Direction for the SEC
After Paul Atkins succeeded Gary Gensler as SEC Chair in April 2025, the commission halted 12 crypto enforcement cases, including high-profile lawsuits against Binance, Coinbase, and Kraken. It also began publishing classification guidance instead of relying primarily on enforcement actions. The same agency that filed 46 crypto enforcement actions in 2023 was now withdrawing cases and publishing regulatory guidance.
The Trump administration took office in January 2025 with support for a more crypto-friendly regulatory environment. Atkins, a former SEC commissioner, continued that policy at the agency. Future administrations could continue the same direction or adopt a different regulatory agenda. That question is likely to influence the next stage of US crypto regulation.
How Different Countries Regulate Crypto
By 2026, countries had adopted very different approaches to crypto regulation. Most fall into four broad categories based on how they regulate digital assets and the level of oversight they require.
Four Regulatory Models
Jurisdictions with Broad Regulatory Frameworks
The European Union’s MiCA provides a single set of rules across all 27 member states, covering licensing, disclosures, and crypto asset service providers. Switzerland’s FINMA has published detailed guidance for security token offerings and crypto fund management. Singapore’s Monetary Authority of Singapore (MAS) licenses major exchanges and applies different rules to different categories of digital assets. Japan requires exchange registration and enforces some of the strongest consumer protection standards among major markets. These jurisdictions provide greater regulatory certainty but require firms to meet higher compliance standards.
Enforcement-Led Jurisdictions
The United States spent several years relying on enforcement before introducing the GENIUS Act and joint SEC-CFTC guidance. As of mid-2026, broader market structure legislation, including the Digital Asset Market Clarity Act, was still awaiting Senate approval. The United Kingdom is also developing its crypto asset regime through the Financial Conduct Authority, with final rules expected in 2026 or 2027.
Partial Regulatory Frameworks
Many countries regulate only certain parts of the crypto industry, most commonly anti-money laundering requirements for exchanges and the taxation of digital assets. Brazil, Australia, Canada, and many Gulf Cooperation Council countries fall into this category. Their rules allow exchanges to operate but provide less certainty for products such as tokenized securities and crypto derivatives.
Restrictive Jurisdictions
China maintains one of the strictest crypto policies, banning mining, trading, exchange services, and crypto promotion since 2021. Algeria, Bangladesh, Egypt, Iraq, Morocco, Nepal, Qatar, and Tunisia also prohibit most crypto activities. These governments concluded that the risks, including capital flight, financial instability, and illicit finance, outweighed the benefits of regulated crypto markets. As crypto regulation continues to develop around the world, those policies may also change.
The Jurisdiction Arbitrage Problem
The BIS warning points to an issue that the United States, the European Union, and the United Kingdom have yet to solve. Each has developed its own crypto regulation, but the result is three different sets of rules for many of the same assets. A stablecoin that complies with the US GENIUS Act may not meet MiCA’s requirements for e-money tokens. Likewise, a DeFi protocol that falls outside US securities regulation could still require authorization under UK rules.
For crypto businesses operating across multiple markets, compliance requires separate legal analysis in every jurisdiction. International initiatives, including the OECD’s Crypto-Asset Reporting Framework (CARF), improve cross-border tax reporting but do not create a single regulatory standard for digital assets. As a result, legal and compliance costs stay high, giving larger and better-funded firms an advantage over smaller competitors. National frameworks have reduced uncertainty within many countries, but differences between jurisdictions still create obstacles for global crypto businesses.
The State of Crypto Regulation in 2026
The regulatory developments of 2025 and 2026 brought major changes to crypto regulation. The GENIUS Act introduced federal rules for stablecoins in the United States. The SEC-CFTC joint guidance identified which regulator oversees different categories of crypto assets. MiCA gave the European Union a single set of rules for crypto markets. By 2026, more than 103 countries had adopted formal crypto regulation.
One issue, however, has not been solved. Most regulatory frameworks are built around identifiable legal entities, such as companies with registered offices, compliance officers, and legal representatives. Many DeFi protocols have none of these features. They operate as blockchain-based software governed by token holders without a traditional legal entity. Applying rules written for financial institutions to decentralized software has proved difficult, and regulators are still developing ways to address it.
Crypto regulation also changes with political leadership. Gary Gensler’s enforcement-focused SEC was followed by Paul Atkins’s emphasis on published rules and guidance after the change in administration in 2025. A future administration could take a different direction. Although legislation provides greater stability than agency policy, broader US market structure legislation was still awaiting Senate approval as of mid-2026.
As documented in our research on why crypto projects fail, legal and regulatory pressure has contributed to project failures throughout the industry’s history. The regulatory changes of 2025 and 2026 reduced uncertainty for projects that comply with the law. At the same time, they increased legal and compliance obligations. Larger firms are generally better positioned to meet those requirements than smaller projects operating across multiple jurisdictions.
What’s Next for Crypto Regulation
The CLARITY Act
One of the biggest developments to watch in the second half of 2026 is the Digital Asset Market Clarity Act in the US Senate. The GENIUS Act introduced federal rules for stablecoins. The SEC-CFTC joint guidance classified digital assets. The CLARITY Act would establish market structure rules, including exchange licensing, disclosure requirements for digital asset issuers, and the decentralization test used to distinguish digital commodities from digital securities.
If the bill becomes law before the 2026 midterm elections, those rules would be established through legislation instead of agency guidance, making them more difficult to reverse through changes in regulatory leadership. If the bill does not pass, much of the current framework will continue to depend on agency policy.
MiCA and USDT
Another issue to watch is MiCA’s treatment of Tether’s USDT. USDT is the world’s largest stablecoin, with approximately $120 billion in circulation. MiCA requires stablecoin issuers to hold reserves at EU-regulated banks and operate under EU supervision. As full MiCA enforcement begins on July 1, 2026, unlicensed crypto asset service providers (CASPs) must leave the EU market. How exchanges and users respond if USDT is unavailable in the European Union could affect the global stablecoin market.
OECD Crypto-Asset Reporting Framework
The OECD’s Crypto-Asset Reporting Framework (CARF) requires crypto exchanges to report user transaction data automatically to tax authorities in participating countries, similar to the FATCA reporting system for traditional financial accounts. Most participating countries are expected to implement CARF in 2027. Once reporting begins, tax authorities will receive crypto transaction data automatically instead of relying on voluntary reporting. Exchanges must also build systems to meet the new reporting requirements, a process that may be difficult for smaller platforms.
The Bigger Picture
Bitcoin operated for five years before any regulator formally defined it. By the time those definitions arrived, the network had already grown too large and too decentralized to shut down. Since then, governments have spent more than a decade adapting existing financial rules to digital assets while introducing new legislation where older laws proved insufficient. The laws adopted in 2025 and 2026 are the broadest set of crypto regulations introduced so far. Their effectiveness and durability will become clearer over the coming years as regulators, courts, businesses, and markets apply them in practice.
Key Takeaways
Bitcoin operated for five years before any major regulator formally defined it. FinCEN issued the first federal guidance in March 2013, classifying crypto exchanges as money services businesses subject to anti-money laundering (AML) registration requirements. The IRS followed in 2014 by classifying cryptocurrency as property, making capital gains tax rules applicable to crypto transactions.
The SEC’s July 2017 DAO Report established that many ICO tokens could qualify as securities under the Howey Test. The commission did not bring enforcement action in connection with The DAO, allowing the ICO market to continue expanding before enforcement increased between 2018 and 2021.
The Gensler era (2021-2024) was the most active period of crypto enforcement in US history. The SEC filed 46 crypto enforcement actions in 2023 alone, including cases against Ripple, Coinbase, Binance, and dozens of other projects. The campaign produced settlements and penalties but did not establish a comprehensive regulatory framework.
The DC Circuit Court’s August 2023 decision in Grayscale v. SEC required the SEC to reconsider its denial of a spot Bitcoin ETF. The January 2024 approval of 11 spot Bitcoin ETFs brought in $58.72 billion in cumulative inflows and expanded institutional access to Bitcoin.
Meanwhile,
The GENIUS Act (July 2025) introduced the first federal framework for stablecoins in the United States. The SEC-CFTC joint guidance (March 2026) classified Bitcoin, Ethereum, Solana, XRP, and Chainlink as digital commodities. MiCA entered full application across the European Union in December 2024. By 2026, more than 103 countries had adopted formal crypto regulation.
The biggest unresolved issue is decentralized finance (DeFi). Most regulatory frameworks rely on identifiable legal entities, while many DeFi protocols operate without one. The Digital Asset Market Clarity Act, pending in the US Senate as of mid-2026, would address many of the remaining US market structure questions left open by the GENIUS Act and the SEC-CFTC guidance.
Sources & Further Reading
- 17 Years of Chaos: US Crypto Regulation History — CCN
- Crypto Regulation in 2026: GENIUS Act, MiCA and Global Rules — Nadcab
- Nexo: Crypto Regulation 2026: CLARITY Act, GENIUS Act and MiCA
- Crypto Regulation News 2026: SEC-CFTC Framework, GENIUS Act, and MiCA 2 — WEEX
- 2026 Crypto Regulation Guide: SEC, MiCA, GENIUS Act — SpotedCrypto
- SEC-CFTC MOU and CBDC Ban: The Biggest US Crypto Regulatory Shift in 2026 — SpotedCrypto
- Crypto Regulation by Country 2026: GENIUS Act, MiCA and Global Laws — NeuralWired
- SEC Report on The DAO — July 25, 2017
- IRS Notice 2014-21: Virtual Currency Guidance
- FinCEN Guidance on Virtual Currencies — March 18, 2013
- Markets in Crypto-Assets Regulation (MiCA) — Official EU Journal
- GENIUS Act — US Congress
- Binance $4.3 Billion Settlement — US DOJ
- Ripple vs SEC: Full Case Timeline and Outcome — CoinLaw