Quick Summary

• Federal landscape: GENIUS Act (stablecoins), CLARITY Act (exchanges), SEC‑CFTC joint statement (spot products).
• New York: BitLicense via NYDFS - strict, high‑cost compliance.
• California: DFPI - permissive licensing, balanced oversight.
• Other states: mostly rely on existing money‑transmitter rules; a few have crypto‑specific statutes.
• Compliance checklist: federal filings, state licensing, AML/KYC, consumer‑protection disclosures.

United States cryptocurrency regulation is a layered system where federal agencies and individual states each set rules for digital assets. As of October 2025, there is still no single, all‑encompassing federal law, but a series of bills and executive actions are stitching the gaps together.

Federal Foundations Shaping State Actions

The latest federal moves are the backbone that many states reference when drafting their own policies.

GENIUS Act was signed into law in early 2025. It creates the first dedicated stablecoin framework, demanding full reserve backing and periodic audits for issuers. This act pushes states to consider whether stablecoin services fall under money‑transmitter laws or qualify for a separate licensing path.

The CLARITY Act, currently moving through the Senate, would shift oversight of crypto exchanges from the SEC to the CFTC, clarifying that futures‑style contracts and spot trading platforms are regulated as commodities markets. Although not law yet, the bill’s language is already influencing state regulators who are preparing for a commodity‑focused regime.

On September 2, 2025, the SEC and CFTC issued a Joint Statement saying that registered exchanges may list spot crypto assets, even with leverage or margin, as long as they meet existing securities or commodity rules. The statement removed years of ambiguity for platforms operating across state lines.

The Office of the Comptroller of the Currency (OCC) followed up with Interpretive Letter 1183, confirming that national banks can now provide custody, certain stablecoin services, and even join independent node‑verification networks without a separate supervisory non‑objection. This letter effectively opened the banking door for crypto‑related business models nationwide.

New York - The Gold Standard (or Gold Mine?)

New York’s Department of Financial Services (NYDFS) introduced the BitLicense in 2015, and it remains the most detailed state crypto regime.

Key requirements include:

• Pre‑approval of business plans, cybersecurity policies, and consumer‑protection procedures.
• Minimum capital reserves of $250,000 for most activities.
• Annual audits by an independent CPA firm.
• Ongoing reporting of transaction volumes and suspicious activity.

Enforcement is aggressive. The New York State Attorney General (NYAG) routinely files civil actions against unlicensed platforms, often resulting in hefty fines and restitution. For a crypto business, entering the New York market means budgeting for both the license fee (which can exceed $50,000) and the compliance staff needed to keep the license in good standing.

California - The Innovation Playground

California’s approach, led by the Department of Financial Protection and Innovation (DFPI), is intentionally lighter.

Instead of a mandated license, the DFPI uses a “narrow reading” of existing money‑transmitter statutes, only requiring a license when a business holds, transacts, or stores crypto on behalf of consumers. The agency also released a Crypto‑Friendly Regulatory Framework in 2024 that outlines best‑practice guidelines for AML/KYC, consumer disclosures, and smart‑contract auditing.

California still enforces consumer‑protection rules, but the process is faster and cheaper. A typical application fee is $1,500, and the DFPI often grants conditional approvals that allow startups to begin operations while they finish a full audit.

Other Notable States

While New York and California dominate the headlines, several other states have taken concrete steps.

Most other states have not passed dedicated crypto statutes. Instead, they apply traditional money‑transmitter, securities, or commodities regulations on a case‑by‑case basis, leaving businesses to interpret whether a token is a security, commodity, or currency.

Compliance Checklist for a Nationwide Roll‑Out

1. Determine federal classification: Is the token a security, commodity, or stablecoin? Use the SEC‑CFTC joint statement as a baseline.
2. Secure any required federal registrations (e.g., broker‑dealer, MSB) before tackling state licenses.
3. Map target states and identify the appropriate regulator (NYDFS, DFPI, state banking department, etc.).
4. Prepare core compliance documents:
   • AML/KYC program aligned with FinCEN 2024 guidance.
   • Cybersecurity framework (NIST 800‑53 baseline).
   • Consumer‑disclosure template covering risks, fees, and insolvency procedures.
5. File state applications:
   • New York - BitLicense fee + detailed business plan.
   • California - DFPI conditional approval, then full audit.
   • Other states - Money‑transmitter license or exemption request.
6. Set up ongoing reporting: transaction volume reports (SEC), periodic audits (NYDFS), and state‑specific filings.
7. Establish a legal‑tech monitoring team to track bill progress (CLARITY Act, CBDC Anti‑Surveillance State Act) and adjust compliance accordingly.

Future Outlook: Toward a Unified Federal Framework?

The Trump administration’s executive order “Strengthening American Leadership in Digital Financial Technology” has put a clear signal on Capitol Hill: a cohesive federal framework is coming. The Working Group mandated by the order is due to deliver a report by early 2026, and it will likely propose a single crypto‑licensing regime that mirrors the CLARITY Act’s commodity‑centered model.

If Congress adopts the CLARITY Act and the GENIUS Act becomes the stablecoin backbone, states may shift from independent licensing to a federal pre‑approval system. That would dramatically lower compliance costs for companies operating in multiple states, but it could also reduce state revenue from licensing fees.

Until that legislation passes, businesses should treat each state as a unique jurisdiction while building a flexible compliance stack that can be toggled on or off depending on local requirements. Investing in a robust governance framework now pays off when the federal rules finally align.

Key Takeaways for Crypto Operators

• New York remains the most restrictive - plan for high costs and ongoing reporting.
• California offers the quickest entry point, but still expects strong consumer protections.
• Most other states rely on traditional money‑transmitter rules; treat them as extensions of federal AML/KYC obligations.
• Keep an eye on the CLARITY Act and the upcoming Working Group report - they will reshape licensing in 2026.
• Build a compliance engine that can adapt to both state‑specific and federal changes.

Frequently Asked Questions

Do I need a BitLicense to operate a crypto exchange in New York?

Yes. The NYDFS requires any platform that allows New York residents to buy, sell, or store digital assets to obtain a BitLicense, regardless of whether the token is classified as a security or a commodity.

Can I rely on the SEC‑CFTC joint statement to avoid state licensing?

No. The joint statement clarifies federal permissibility for spot products, but states may still impose their own licensing or registration requirements.

What is the main advantage of the GENIUS Act for stablecoin issuers?

It provides a clear, federal definition of a stablecoin and sets reserve‑backing and audit standards, easing the path to nationwide compliance.

How does California’s DFPI differ from New York’s NYDFS?

California uses a flexible, case‑by‑case approach that often treats crypto businesses under existing money‑transmitter laws, while New York mandates a stand‑alone BitLicense with extensive reporting.

Will the CLARITY Act replace state crypto regulations?

If enacted, the CLARITY Act would create a federal framework for exchanges and brokers, likely reducing the need for separate state licenses, but states could still enforce consumer‑protection rules.