America’s Regulatory Sprint for Crypto Leadership 

Under the second Trump Administration and new Securities and Exchange Commission Chairman, Paul Atkins, the United States is transforming how it approaches cryptocurrency regulation. What was once a landscape characterized by uncertainty and regulation-by-enforcement has evolved into a coordinated federal strategy aimed at establishing America as the global crypto capital. This shift represents a notable change for the cryptocurrency market with profound implications for businesses, investors, and legal practitioners.  

Let’s level set: From Skepticism to Strategic Clarity 

To understand the regulatory evolution of the cryptocurrency market within the securities law context, we must examine the approaches of the three most recent SEC chairs. Although cryptocurrency and Bitcoin have existed at least since 2009 with Satoshi Nakamoto’s foundational paper, cryptocurrency became mainstream around the mid-2010s, leading to the “wild west” period of the ICO boom.  

Under Chairman Jay Clayton (2017-2021), the SEC established foundational crypto jurisprudence, beginning with the landmark DAO Report in June 2017. Although Chairman Clayton famously said, “I believe every ICO I have seen is a security—we have jurisdiction, and our federal securities laws apply,” the agency’s approach under his leadership was generally cautious, setting early precedents while trying to avoid stifling the emerging industry.  

With the Biden administration and Chairman Gary Gensler’s tenure (2021-2024), the SEC shifted toward aggressive enforcement. While emphasizing investor protection—a pillar of the agency’s mission—the crypto industry, including SEC Commissioner Hester Peirce (“Crypto Mom”), described the SEC’s approach as “regulation by enforcement.” This strategy created significant market uncertainty and undermined another pillar of the agency’s mission: facilitating capital formation. This regulatory unpredictability meant market participants were often unsure of what was permissible until after regulators brought enforcement actions.  

Following President Trump’s campaign pledge to make America the “crypto capital of the world,” he established the President’s Working Group on Digital Asset Markets to coordinate multi-agency crypto regulation. Established by Executive Order 14178, Strengthening American Leadership in Digital Financial Technology, the Working Group’s report provided federal agencies with guidelines on approaching crypto market regulation. With Paul Atkins’s appointment as SEC chair in 2025, the SEC experienced another pendulum swing, this time toward the promise of regulatory clarity and innovation enablement. The new approach focuses on providing clear rules through the Crypto Task Force and “Project Crypto,” while maintaining enforcement priorities against actual fraud rather than technical registration issues.  

Legislative Breakthrough: The GENIUS Act and CLARITY Act 

Consistent with his campaign promise, Executive Orders, and legislative momentum, President Trump signed the GENIUS Act into law on July 18, 2025, marking a milestone for the crypto industry. The GENIUS Act represents a major federal crypto legislation, achieving bipartisan support with 308-122 House approval, including over 100 Democrats. This legislation specifically addresses stablecoin infrastructure through: 

• Federal Framework: Creating uniform national standards rather than a patchwork of state regulations. 

• Reserve Requirements: Stablecoins must maintain one-to-one backing with high-quality liquid assets, including cash, Treasury securities, and bank deposits. 

• Licensing Framework: Provides clear pathways for stablecoin issuers to obtain federal authorization. 

• Transparency Mandates: Issuers must provide clear disclosure about reserve composition and backing mechanisms. 

• Third-Party Auditing: Independent verification ensures claims of reserves actually exist and match outstanding token supply. 

Having passed the GENIUS Act, Congress is now considering the CLARITY Act. Although the bill passed the House of Representatives with a 294-134 vote, it faces significant challenges in the Senate. The pending CLARITY Act promises to resolve one of the industry’s longest-standing questions: which agency should regulate which digital assets.  

Under the CLARITY Act, digital assets operating on sufficiently decentralized networks would be classified as “digital commodities” under CFTC oversight, while those on centralized or less mature networks would remain securities under SEC jurisdiction. This framework provides the crypto industry with a clear pathway: achieve genuine decentralization and move from securities regulation to the generally more flexible commodity oversight.  

Market Implications 

The shift from enforcement-first to regulatory clarity is driving significant market activity. Companies can now plan product development and business structures without constant concern about unexpected enforcement actions, including making long-term investments in crypto infrastructure without fear of sudden regulatory reversals. Business models that were previously too risky due to regulatory uncertainty are now viable.  

Similarly, we have seen a surge of fintech IPOs and companies pursuing acquisitions, demonstrating investor appetite. Major banks are developing stablecoins and partnering with crypto platforms. This regulatory clarity suggests that businesses can now raise capital through public markets, attract institutional investors previously deterred by regulatory risk, plan for exit strategies and long-term growth, and develop innovative products with confidence.  

Looking Forward 

The transformation from regulatory skepticism to strategic clarity, combined with bipartisan support and coordinated agency guidance, is creating an environment where legitimate crypto businesses can operate with confidence while maintaining appropriate investor protections.  

For businesses, investors, and legal professionals, this represents a fundamental shift in how financial innovation is regulated. The United States’ quest to become the global crypto capital and remain competitive extends beyond mere technology adoption. It involves creating legal and regulatory infrastructure that enables innovation while maintaining the integrity and stability that make financial systems trustworthy.  

Under the Trump Administration and Atkins’s leadership, early indicators suggest a coordinated federal effort may position the United States at the forefront of achieving this goal—notwithstanding the President’s personal interests in the industry. Supporters of the American economy should be rooting for this transformation to lead to America’s stance as a global crypto leader, while maintaining the consumer protections and market integrity that define effective financial regulation. With regulatory momentum building and markets responding positively, America appears well-positioned to achieve its crypto capital ambitions.  

At Basswood Counsel, we monitor developments in financial technology regulation, particularly in cryptocurrency and digital assets, to help our clients navigate evolving compliance requirements and regulatory risks. We hope this overview was helpful. Please reach out if you have questions about your specific regulatory situation.