by Jake ClaverQuick answer: Many investors stayed out of crypto because the rules on custody, taxes, and which tokens count as securities were unsettled. That is changing. In July 2025 the United States enacted the GENIUS Act, its first federal framework for payment stablecoins, and a separate market-structure bill that would split oversight between the CFTC and the SEC has passed the House and is moving through the Senate. Clearer rules reduce legal and operational risk. They do not remove market risk.
Updated 07/17/2026. By Jake Claver. Educational content, not investment advice.
Sitting out an asset class because the rulebook is unfinished is a defensible decision, not a timid one. Without defined standards for how tokens are custodied, how staking income is taxed, and which assets fall under securities law, an investor cannot price the downside properly. The risk is not only that a position falls in value; it is that the position gets disrupted by an enforcement action or a jurisdictional dispute that has nothing to do with the market.
Over the past year, US policymakers have started to close some of those open questions. Below is what has actually been settled, sourced to primary government material, and what a cautious investor should still treat as unresolved.
Why unclear rules kept capital on the sidelines
Ambiguity creates operational risk, not just legal risk. Custodians were reluctant to offer services without defined compliance standards. Tax treatment for activities like staking and lending was inconsistent, even though the Internal Revenue Service has long held that, for US tax purposes, digital assets are treated as property, not currency. Exchanges delisted tokens abruptly when enforcement actions arrived. For anyone building a long-term position, that instability made prudent planning hard, because the rules themselves were a moving variable.
The GENIUS Act: a federal rulebook for stablecoins
The largest single change is the GENIUS Act, signed into law on July 18, 2025. According to the White House fact sheet, it establishes the first federal framework for payment stablecoins. The core requirement is direct: issuers must hold 100% reserve backing in liquid assets such as US dollars or short-term Treasuries, and must publish monthly disclosures of what those reserves contain.
The law also pulls stablecoin issuers into the existing financial-crime regime. It subjects them to the Bank Secrecy Act, which means anti-money-laundering and sanctions-compliance programs are mandatory, not optional. The Treasury Department, working with the Financial Crimes Enforcement Network, has begun the rulemaking that fills in the operational detail. For an investor, the practical takeaway is that a US payment stablecoin now has a defined legal meaning: reserve rules, disclosure rules, and a named regulator, rather than an issuer’s promise.
Market structure: who regulates which token
The second open question, which agency oversees which asset, is the subject of separate market-structure legislation. The Digital Asset Market Clarity Act (the CLARITY Act) passed the House of Representatives in July 2025 and was advanced by the Senate Banking Committee in May 2026. As of mid-July 2026 it had not become law; it still needs a full Senate vote, reconciliation with the House version, and the President’s signature.
The bill’s central idea is a jurisdictional line. It would give the Commodity Futures Trading Commission authority over spot markets in “digital commodities,” while the Securities and Exchange Commission keeps oversight of assets sold as investment contracts. The CFTC already treats Bitcoin and other virtual currencies as commodities for the purposes it regulates, so the bill would codify and extend a distinction that already exists in practice. Because the legislation is not final, the exact boundaries could still shift, which is itself a reason to track it rather than assume the outcome.
What clarity removes, and what it does not
It helps to separate two different risks that often get blurred together.
- Regulatory and operational risk is the chance that a rule change, an enforcement action, or an unregulated custodian disrupts your position. Federal stablecoin rules and a clearer agency map reduce this category.
- Market risk is the chance that the asset simply falls in value. No statute changes that. Digital assets remain volatile, and the government agencies involved say so plainly: the CFTC’s own materials warn that much of the marketplace carries significant fraud risk.
Clearer rules also do not change the tax mechanics. Gains and losses on digital assets are still reportable, and brokers began issuing Form 1099-DA for digital-asset transactions in the 2025 reporting cycle. Clarity narrows one category of risk. It does not convert a volatile asset into a safe one.
How to approach re-entry
If regulatory uncertainty was your specific objection, revisit that specific objection rather than treating the whole asset class as newly settled. Confirm the custody solution you would use is actually regulated. Confirm the tax treatment for the exact activity you are considering, whether that is spot holding, staking, or lending, against current IRS guidance. Consult the Treasury Department and agency sources for the current state of any rule, because rulemaking is ongoing. Then size any position to the volatility that remains after the legal picture clears.
Why this matters
For years, the honest answer to “why not own any crypto” was often “because I cannot tell what the rules are.” That answer is weaker in 2026 than it was in 2023. Stablecoins have a federal framework. Market-structure legislation has passed one chamber and is moving. The remaining uncertainty is narrower and more specific, which is exactly the condition under which a careful investor can make a deliberate decision instead of a blanket one. The point is not that crypto is now safe. The point is that the reason for staying out has changed, and a changed reason deserves a fresh look.
Common questions
Did the GENIUS Act make stablecoins safe?
No. The GENIUS Act sets federal rules for payment stablecoins, including 100% reserve backing in liquid assets and monthly public reserve disclosures, and it subjects issuers to anti-money-laundering requirements. Those rules reduce legal and operational risk, but they do not eliminate market risk or guarantee that any specific issuer or token will hold its value.
Is crypto now fully regulated in the United States?
Not fully. Stablecoins have a federal framework under the GENIUS Act, signed in July 2025. Broader market-structure legislation, the CLARITY Act, passed the House in July 2025 and advanced in the Senate Banking Committee in May 2026, but as of mid-July 2026 it had not been enacted, so the division of authority between the CFTC and SEC is not yet settled in law.
Who regulates crypto, the SEC or the CFTC?
Both, along the lines of what the asset is. The CFTC already treats Bitcoin and similar virtual currencies as commodities, while the SEC oversees assets sold as investment contracts. The pending CLARITY Act would formalize this split by giving the CFTC authority over digital-commodity spot markets, but until it becomes law the boundary is defined case by case.
How are crypto gains taxed now?
The IRS treats digital assets as property, so buying, selling, and exchanging them can create taxable gains or losses that must be reported. This treatment predates the recent legislation and did not change with it. Brokers also began reporting digital-asset transactions on Form 1099-DA in the 2025 cycle.
Should I get back into crypto because the rules are clearer?
That is a personal decision this article cannot make for you. Clearer rules address regulatory and operational risk, not market risk. Review the specific concern that kept you out, confirm your custodian is regulated and your tax treatment is understood, size positions to the volatility that remains, and consult a qualified professional before acting.
This content is educational only. It is not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
