To establish clear ground rules, crypto has started to be regulated for the first time by the US govt in March 2013.<\/em><\/p>\n<\/blockquote>\n\n\n\n When the US updates its regulations, it impacts the entire world. And now we\u2019re in a strong need to discuss the US Crypto Regulation at this time with more updates.<\/p>\n\n\n\n Yeah! Come on, let\u2019s decode the crypto regulation in simple terms.<\/em><\/p>\n\n\n\n Crypto regulation is the rules\/laws that are implemented by the governments to lay boundaries on crypto assets on it\u2019s usage. It specifies how digital assets like BTC, ETH, and other tokens are to be traded, stored, issued, and taxed.<\/p>\n\n\n\n The rules mainly focus on <\/p>\n\n\n\n These regulations vary according to the country and regions, such as US crypto regulation and Canadian crypto regulations<\/strong><\/a>. These laws get updated regularly according to the market shifts and trends. <\/p>\n\n\n\n Okay, first, why should crypto be regulated? <\/em>Let\u2019s know the reason.<\/p>\n\n\n\n Crypto\u2019s value is increasing with huge hypes in the market. And the world witnessed BTC price reaching over $125K, which takes years for ETH to reach half of the BTC average price. <\/p>\n\n\n\n So, the number of crypto users increases. Resulting in a large number of crypto holders and investors in the market.<\/p>\n\n\n\n At this time, when users store their assets in the crypto exchange platforms, their funds could be exploited. And many exchanges are prone to hacks despite being built using solid blockchain technology. <\/p>\n\n\n\n The main reasons for crypto tax compliance are<\/p>\n\n\n\n US is the only country with the largest number of crypto traders. Crypto regulation in the US is getting structured every season and making progress. <\/p>\n<\/blockquote>\n\n\n\n Shall we get to the point where it all began?<\/em><\/p>\n\n\n\n As we\u2019ve seen earlier that US laid the foundation for regulating cryptocurrencies in 2013. Let\u2019s see what that regulation is and how it went.<\/p>\n\n\n\n Today, we won\u2019t even opt to trade on crypto exchanges without KYC\/AML<\/strong> formalities. To the surprise, that procedure was brought by this regulation.<\/p>\n\n\n\n FinCEN is the law that laid a solid foundation for making the KYC\/AML verification mandatory in all centralized crypto exchanges. <\/p>\n\n\n\n Securities and Exchange Commission(SEC)<\/strong><\/a> has implemented a rule to declare digital assets as securities<\/strong> determined by the Howey Test<\/em><\/strong> (discussed in upcoming section).<\/p>\n\n\n\n Commodities Futures Trading Commission(CFTC) regulates the derivatives markets. <\/p>\n\n\n\n And we know that the US has separate jurisdictions for the state and the country. For example: New York<\/strong> has developed their own licensing law named BitLicense<\/strong>. Following the particular state\u2019s crypto regulatory framework is also necessary for businesses.<\/p>\n\n\n\n So, why wasn’t this sufficient to prevent vulnerabilities? <\/em><\/p>\n\n\n\n After witnessing incidents like FTX and Luna collapses, the need for a comprehensive federal crypto currency legislation has grown stronger. <\/p>\n\n\n\n Let\u2019s get to the core and mandate cryptocurrency regulation in the US, and why it\u2019s irresistible.<\/em><\/p>\n\n\n\n The Securities and Exchange Commission(SEC) declares a digital asset to be secured once it passes a Howey test. Isn\u2019t it?<\/em><\/p>\n\n\n\n What\u2019s a Howey Test?<\/em><\/strong><\/p>\n\n\n\n Howey test is a procedure that an asset should undergo a 4-stage process<\/strong>. It involves investment and the expected profit, like elements, to determine whether the asset complies with the laws or not.<\/p>\n\n\n\n State: 1 Investment of Money<\/strong><\/p>\n\n\n\n An investor provides money to an entity to include digital assets.<\/p>\n\n\n\n Stage: 2 In a Common Enterprise<\/strong><\/p>\n\n\n\n The success of investors is correlated with that of the promoter, other investors, and the overall business as a whole.<\/p>\n\n\n\n Stage: 3 With an expectation of Profits<\/strong><\/p>\n\n\n\n Investors look forward to monetary benefits like dividends or appreciation.<\/p>\n\n\n\n Stage: 4 To be Derived from the Efforts of Others<\/strong><\/p>\n\n\n\n Expected profits primarily result from the efforts of a promoter or third party, not the investor. <\/p>\n\n\n\n When a transaction is passed through these four paths, then it\u2019s considered an \u201cinvestment contract<\/strong>\u201d.<\/p>\n\n\n\n SEC crypto regulation is vital because it <\/p>\n\n\n\n In order to rebuild public trust in the wake of widespread fraud and the 1929 stock market disaster, SEC crypto regulations are essential for a strong economy.<\/p>\n\n\n\n Now that you\u2019ve got the history of US crypto regulation. We can focus on the current regulations.<\/p>\n\n\n\n 2025 has been the greatest turning point in the history of US crypto regulation. All because of the GENIUS Act.<\/p>\n\n\n\n What\u2019s a GENIUS Act?<\/strong><\/p>\n\n\n\n The GENIUS Act laid a clear federal regulation for Stablecoins. It requires issuers to maintain full reserves and to be comply with AML rules. The act is passed in the House and the Senate.<\/p>\n\n\n\n This ensures only the approved issuers can create Stablecoins<\/strong> pegged to USD<\/strong>.<\/p>\n\n\n\n Well, not this act alone is a hero. There are a few more cryptocurrency laws in US made with a clear point of view. <\/p>\n\n\n\n The CLARITY Act is what I\u2019m talking about right now. <\/p>\n\n\n\n Note:<\/strong> Both acts have been passed by the House and are pending in the Senate.<\/p>\n\n\n\n Are you clear about the US crypto regulation framework? Now take a look at the best crypto exchanges in the USA.<\/em><\/p>\n\n\n\n The US is not standing as the crypto hub with hundreds of successful exchanges running. We can see the top crypto exchanges in USA.<\/p>\n\n\n\n Coinbase is the No.1 user-friendly crypto exchange<\/strong> with basic to advanced features. Features a dedicated app and wallet with an advanced version.<\/p>\n\n\n\n Kraken is a crypto exchange with a history of never being hacked<\/strong>. It holds compatibility with many devices and provides more features for advanced traders and institutional investors. <\/p>\n\n\n\n Gemini is the top crypto exchanges in US with a separate fanbase for its regulatory safety<\/strong>. Despite supporting currencies when compared to the other exchanges, it\u2019s strong in terms of security and compliance.<\/p>\n\n\n\n Binance is the common name that reached every corner of the world with its wide range of features<\/strong>. It operates separately for US users under the cryptocurrency laws in US.<\/p>\n\n\n\n Crypto.com is the top crypto exchanges in USA, supporting a large number of cryptocurrencies with a dedicated mobile app. Provides NFT access<\/strong> and more perks and benefits for the users.<\/p>\n\n\n\n If you wish to know more about it, we can cover it as a separate article. We\u2019ve seen the initial and the current regulatory structure of US crypto regulation. <\/p>\n\n\n\n It\u2019s time to look forward to how the future is gonna be.<\/em><\/p>\n\n\n\n As we\u2019ve seen, the remarkable changes like the CLARITY Act are still pending approval. We can expect federal and state collaborations to bring clear crypto compliance in US.<\/p>\n\n\n\n Crypto exchanges can be vulnerable, if there isn\u2019t a proper regulatory structure. Above all users are the ones who bear the losses in this case. In 2026, we can expect more risk-based compliance requirements that purely focus on protecting user\/investor funds.<\/p>\n\n\n\n You can be a crypto investor, trader, or a startup willing to invest your lifetime savings in the crypto business. Knowing how the regulations work is more important.<\/p>\n\n\n\n Now I wish to throw the final advice to the future startup leaders.<\/em><\/p>\n\n\n\n If any entrepreneurs wish to start their business in 2026, then setting standards is more important than decorating your platform with advanced features.<\/p>\n\n\n\n <\/p> <\/span>What is Crypto Regulation?<\/strong><\/span><\/h2>\n\n\n\n
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<\/span>Why Crypto needs Regulation?<\/strong><\/span><\/h2>\n\n\n\n
![\"Why](\"https:\/\/www.innblockchain.com\/academy\/wp-content\/uploads\/2026\/01\/US-Crypto-Regulation-Explained-2-copy.webp\")
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<\/span>US Crypto Regulation: The Groundwork<\/strong><\/span><\/h2>\n\n\n\n
![\"US](\"https:\/\/www.innblockchain.com\/academy\/wp-content\/uploads\/2026\/01\/US-Crypto-Regulation-Explained-3.webp\")
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What does FinCEN changed?<\/em><\/strong>\nMade all the crypto(virtual currency) exchanges register as Money Services Businesses(MSB) and follow the KYC\/AML rules.<\/code><\/pre>\n\n\n\n\n
<\/span>SEC Crypto Regulation: Why does it Matter?<\/strong><\/span><\/h2>\n\n\n\n
<\/span>4 Stages of the Howey Test<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>Newly Added Cryptocurrency Regulation in the US<\/strong><\/span><\/h2>\n\n\n\n
![\"Crypto](\"https:\/\/www.innblockchain.com\/academy\/wp-content\/uploads\/2026\/01\/US-Crypto-Regulation-Explained-4.webp\")
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<\/span>Top Crypto Exchanges in USA with Regulations<\/strong><\/span><\/h2>\n\n\n\n
![\"Top](\"https:\/\/www.innblockchain.com\/academy\/wp-content\/uploads\/2026\/01\/US-Crypto-Regulation-Explained-5.webp\")
<\/figure>\n\n\n\n<\/span>#1 Coinbase<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>#2 Kraken<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>#3 Gemini<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>#4 Binance<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>#5 Crypto.com<\/strong><\/span><\/h3>\n\n\n\n
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<\/span>Future of US Crypto Compliance: What\u2019s Next<\/strong><\/span><\/h2>\n\n\n\n
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<\/span>What Businesses should take note of the US Crypto Regulation?<\/strong><\/span><\/h2>\n\n\n\n
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