US Crypto Regulations: What’s Legal, What’s Not in 2025

When you trade or hold crypto in the United States, you’re not just dealing with markets—you’re navigating a web of US crypto regulations, a patchwork of federal and state laws that define what’s allowed, taxed, or banned in digital asset activity. Also known as crypto legal framework, it’s the invisible hand that shapes whether your exchange works, your taxes are clean, or your wallet gets flagged. This isn’t theory. It’s what stops you from using certain platforms, forces you to report gains, and decides if your mining setup is legal in your state.

The SEC, the U.S. Securities and Exchange Commission, treats most tokens as securities unless proven otherwise. Also known as crypto securities regulator, it’s the agency that’s sued Coinbase, Binance, and Kraken for selling unregistered assets. If a coin acts like an investment—where people buy expecting profits from others’ work—it’s likely under the SEC’s thumb. That’s why so many projects either leave the U.S. or shut down access to American users. Then there’s the IRS, the Internal Revenue Service, which treats crypto like property, not currency. Also known as crypto tax authority, it wants every trade, every swap, every airdrop reported. Even swapping Bitcoin for Ethereum triggers a taxable event. No one’s auditing your wallet daily—but if you make over $600 in gains, the IRS will find out through your exchange’s 1099 forms. And don’t forget state rules. New York’s BitLicense, California’s money transmitter laws, and Wyoming’s crypto-friendly laws mean where you live changes what you can do.

What does this mean for you? If you’re trading on a U.S.-based exchange like Bitstamp or Kraken, you’re already under their compliance radar. If you’re mining, your electricity bill might get scrutiny—especially in states like Texas or Georgia where power usage spikes. If you’re holding crypto in a non-custodial wallet, you’re still on the hook for taxes. The rules aren’t always clear, but the consequences are: fines, audits, or worse.

Below, you’ll find real breakdowns of how these rules play out—from exchanges that shut down for U.S. users, to how mining is treated in different states, to why some airdrops are outright scams designed to dodge regulation. No fluff. Just what you need to know to stay clear of trouble while learning the market.