The US is shifting toward lighter, innovation-friendly crypto regulation, with moves like the FIT21 Act, a repeal of SAB 121 and a more lenient SEC approach.

, but the rules governing it remain a tangled web of state laws, federal agency guidelines and developing court rulings. With the US moving toward clearer policies, crypto investors and innovators are left navigating a fragmented regulatory space. This article discusses current US crypto regulations, explores major regulatory challenges and the country’s stance on crypto, and examines the relevance of current US rules to traders and the larger industry.

Crypto regulations are legal frameworks set by governments to manage the creation, trading, taxation and use of digital assets. These regulations aim to protect consumers, prevent illegal activities and maintain market integrity.

The US regulatory stance on cryptocurrency in 2025 is moving toward greater clarity and support for innovation, though a unified federal framework is still in the works. 

, passed by the House of Representatives in 2024, aims to establish comprehensive rules for digital assets but has yet to be fully implemented. Signaling a more crypto-friendly direction, the Trump administration issued an 

 in January 2025 to create the President’s Working Group on Digital Asset Markets, with the goal of “providing regulatory clarity and certainty.” Chaired by David Sacks, the group is tasked with reviewing current laws and recommending reforms to encourage responsible innovation.

Federal agencies are gradually shifting their approach. The Securities and Exchange Commission (SEC), traditionally strict with crypto enforcement, has formed a dedicated 

. This group is working to simplify registration processes, outline disclosure expectations and provide clarity as to which tokens qualify as securities. Notably, the SEC has softened its stance on certain categories of cryptocurrencies, such as 

, indicating they may no longer be treated as securities.

Banking regulators have also relaxed their oversight. The Federal Reserve 

 prior guidance requiring banks to notify regulators before engaging in crypto-related activities, opting instead for standard supervisory oversight. Likewise, the Federal Deposit Insurance Corporation (FDIC) has 

 that banks can participate in permissible crypto activities without prior approval as long as they manage risks appropriately.

State-level regulations, however, remain highly fragmented. 

 with crypto-friendly policies, offering clear licensing and legal protections that attract 

 businesses. In contrast, some states still maintain stricter or underdeveloped frameworks, resulting in a regulatory patchwork that complicates compliance for companies operating across state lines.

In other developments, the federal government has launched the 

, an unprecedented move that integrates digital assets into national infrastructure planning. While this initiative signals strong institutional interest, it also introduces new compliance challenges for both government agencies and market participants.

What regulatory issues exist for cryptocurrency?

Cryptocurrency regulation in the US in 2025 continues to grapple with several persistent challenges, despite efforts to establish clearer frameworks. 

Why this matters for crypto traders and the industry

As crypto matures from the fringes of finance into the mainstream, clear rules and oversight are needed to protect individuals and to nurture a stable, trustworthy ecosystem that benefits everyone involved.

The US is transitioning toward a pro-innovation crypto regime, with emphasis on deregulation, legislative clarity and strategic asset management. Its nascent administration has signaled a significant departure from the previous enforcement-heavy approach, prioritizing regulatory clarity and industry growth. Key actions include the January 2025 executive order establishing an interagency task force to review and potentially rescind restrictive regulations, alongside the SEC’s dismissal of high-profile cases against Coinbase, Robinhood Crypto and OpenSea. 

Meanwhile, the SEC’s Crypto Task Force, led by Hester M. Peirce, aims to streamline registration paths for tokens and clarify jurisdictional boundaries, particularly for meme coins, which the SEC no longer classifies as securities. In addition, the 

 removes barriers for banks offering crypto custody services, thus encouraging institutional participation.

Bipartisan efforts are gaining momentum in the push to formalize crypto oversight, with stablecoin regulation leading the charge. Key proposals like the 

 are pushing for requirements such as 1:1 reserves, regular audits and greater transparency from issuers, bringing stablecoins more in line with traditional financial standards. 

 and SEC are working out jurisdictional boundaries, and Congress is expected to pass market structure legislation that will determine whether crypto assets are classified as securities or commodities. These moves are designed to reduce the regulatory landscape’s current fragmentation, as stablecoins now face a patchwork of state-level regulations that drive up compliance costs.

The US federal government is moving toward a clearer and more innovative crypto regulatory regime, making efforts to streamline oversight, push institutional adoption and integrate digital assets into economic strategy. However, until federal policies fully align and state differences are reconciled, the regulatory environment for crypto in the US remains complex and dynamic. Traders and industry players need to understand this complex but maturing environment in order to navigate risks and grab emerging opportunities.

Intermediate

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Crypto regulations in the US: Navigating a complex landscape

Reports following Ether's landmark surge on May 7, 2025 largely attribute this rally to the completion of the Pectra upgrade.

Ether has recently regained its status as the crypto golden boy, leading a rally since May 7, 2025 that’s outpaced both Bitcoin and most altcoins. This unusual performance has prompted market observers to speculate on the reasons behind it, and whether this impressive trend will continue.

The ETH/BTC ratio has been declining since January 2024, when the SEC 

In Q1 2025, disappointment in Ether's performance reached its peak, driven by market drawdowns and concerns about Ethereum Foundation leadership, leading to a significant exit of investors from the world’s second-largest cryptocurrency. However, on May 7, 2025, the market narrative changed abruptly as Ether surged over 20% in just one day.

Reports following Ether's landmark surge on May 7, 2025 largely attribute this rally to the completion of the 

 upgrade. While the timing of the upgrade coincides perfectly with Ether's rebound, however, this view doesn't capture the full story.

Historically, the ETH/BTC ratio began to rebound two months before the official completion of 

. Similarly, the Pectra upgrade had been anticipated for some time. Despite its smooth execution, the market had low expectations regarding challenges in Q1 2025.

Moreover, Ether's resurgence coincided with BTC surpassing $100,000, as broader risk assets rallied due to positive developments in US tariff negotiations with the UK and China.

In summary, the overall asset rally triggered Ether's rise, while the Pectra upgrade enhanced its performance against Bitcoin. Additionally, Ether's strong outperformance over other altcoins likely resulted from significant short liquidations.

In the days following Ether's record rally, ETH experienced over $500 million in short liquidations. This phenomenon significantly contributed to the unusual surge of more than 20% in a single day for a leading token such as Ether.

The most common criticism of Ethereum is that it loses revenue to 

 (DEXs) for Ether has consistently declined, partly due to competition from other 

 blockchains such as Solana, as well as Ethereum's own L2 networks. Since most L2 solutions have their own utility tokens, the activities conducted on these platforms don’t directly generate fees for L1, since they bundle transactions and post them to the Ethereum Mainnet.

This dilemma doesn’t appear to have a quick fix. In the medium term, Ethereum’s key value proposition may need to shift from that of a profit-generating blockchain with a 

 asset to one that functions as a financial instrument that’s akin to a bond.

Ethereum’s staking feature has yet to face direct competition, and the amount staked within the ecosystem continues to grow. As of Q1 2025, approximately 34 million ETH are staked, yielding an annual return of 2.9%.

Ongoing developments in Hong Kong and Canada may allow ETH Spot ETFs to incorporate staking features. Notably, the Pectra upgrade increases the staking limit for each node from 32 ETH to 2048 ETH, which could incentivize ETF issuers to operate their own nodes in the future. Adding staking rewards to ETH Spot ETFs could enhance their attractiveness, especially as the Fed eventually returns interest rates to more typical levels.

With a 2.9% return on Ether staking, Ether is increasingly positioned as a bond-like investment.

Ethereum’s leadership change and future outlook

Vitalik Buterin’s recent proposals for Ethereum

Ethereum co-founder Vitalik Buterin recently 

 his vision for simplifying Ethereum's Layer 1 in a post titled 

, emphasizing that scalability alone is insufficient: Ethereum must also be understandable, maintainable and secure in order to reliably serve as a platform for civilization’s assets. Buterin proposes a significant reduction in complexity, aiming for an Ethereum that will be as simple (within five years) as Bitcoin is now. He believes that a simpler protocol will enhance security, attract more developers and facilitate easier upgrades.

To achieve this, Buterin introduces a beam chain proposal that aims to streamline consensus by reducing technical complexity, eliminating epochs and sync committees, simplifying fork choice rules and enhancing the validator lifecycle for easier onboarding and recovery. He advocates replacing the current Ethereum virtual machine (EVM) with RISC-V, a more efficient, general-purpose virtual machine. This transition promises a clearer specification that will reduce bugs and maintenance challenges; more flexibility for developers to use various programming languages; and the potential to increase throughput by 100 times.

To address existing applications, Buterin suggests a phased transition that introduces RISC-V precompiles and allows dual deployment options during the shift, gradually moving legacy features out of the core protocol to keep it lean. He also calls for standardizing tools within the network to reduce redundancy and complexity, proposing a unified encoding system, shared data splitting methods and a simpler state structure. Ultimately, Buterin believes that regaining simplicity is essential in order for Ethereum to maintain its flexibility and durability as it scales.

With a new road map for Ethereum and proposed leadership 

 to the Ethereum Foundation to make the Ethereum guardian more accessible, we believe Ethereum has more upside coming.

Advanced

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Bybit Crypto Insights Report: Is Ether regaining favor? How far will it go?

Unichain, Uniswap’s L2 network, now handles over 76% of Uniswap v4 volume, driven by UNI incentives and its new Rollup-Boost feature. 

The S&P 500 jumped 3.26% as US-China tariff easing lifted market sentiment. Investors now await CPI and retail data for signs of inflation trends under the new trade regime. Gold fell near $3,208 as easing US-China trade tensions reduced safe-haven demand. With CPI data ahead, further downside is likely. Technicals suggest bearish momentum, with key support at $3,202. The Coindesk Indices, which tracks the broader crypto market, fell 1.97%, with Bitcoin and Ether down 2.53% and 0.95%, in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is RUNE, which surged by 4.4% following the completion of Halborn's security audit for Rujira Network's omnichain DeFi layer on THORChain.

THORChain (RUNE), created in 2018, is a decentralized protocol enabling native asset swaps across blockchains without wrapping. Built on Cosmos SDK and Tendermint, it uses Proof-of-Stake and Byzantine Fault Tolerance for secure cross-chain transactions. Halborn has 

 a smart contract security audit for Rujira Network, which is building an omnichain DeFi app layer on THORChain. Rujira enables seamless access to DeFi apps using native assets across connected chains.

Check out the latest prices, charts, and data of 

Unichain, Uniswap’s L2 network, now handles over 76% of Uniswap v4 volume, driven by UNI incentives and its new Rollup-Boost feature. This upgrade enhances MEV handling, cuts failed transaction gas costs, and sets the stage for Flashblocks—an upcoming 200ms block time system. Despite v4’s growth, Uniswap v3 still leads in total volume. The aim of Unichain is to solve Ethereum mainnet and L2 liquidity fragmentation while improving speed and decentralization.

Yesterday, BTC spot ETFs saw total outflows of $64.2 million, with $32.9 million from GBTC and $31.3 million from all other ETFs combined.

Multipli’s Season 1 has ended with 359.2M ORBs distributed (50% of supply). 

, allocating 30% of ORBs. Users can continue earning by keeping funds on mainnet or testnet—no action required. New users can join via testnet (free) or deposit stablecoins on BSC/Ethereum.

Beginner

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Unichain leads Uniswap v4 activity with rollup-boost upgrade and upcoming flashblocks feature

Ethereum surged 29% this week, breaking a 10-week downtrend and catching short sellers off guard with $400M liquidated. 

The S&P 500 extended its rally with a nine-day winning streak, its longest since 2004, as optimism over potential trade deals and upcoming Fed and earnings updates lifted sentiment. Gold rose to $3,245 on trade uncertainty and Fed rate cut hopes. CoinDesk Indices, which tracks the broader crypto market, fell 1.50% in the past 24 hours, while Bitcoin and Ether dropped 0.10% and 0.51%, respectively. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today's top performer is AI16Z, which surged 7.0% after Bonsai's smart media protocol integrated with Eliza to empower agent-driven social content creation.

elizaOS (AI16Z), launched in October 2024, formerly ai16z, is a Solana-based DApp that uses a DAO and an AI agent, "Marc AIndreessen," to manage community-driven investments in tech and crypto projects. 

, lets developers create agent-driven social media scripts and templates using ElizaOS plugins. The Bonsai Client, its first implementation, enables easy deployment of these smart media agents on platforms like Lens. Builders can explore these tools and compete for prizes in the Lens Spring Hackathon.

Ethereum surged 29% this week, breaking a 10-week downtrend and catching short sellers off guard with $400M liquidated. Despite muted ETF flows and neutral derivatives sentiment, ETH’s dominance remains unshaken—boasting $64B in TVL, dwarfing Solana, BNB Chain, and Tron combined. With fresh momentum from the recent pectra upgrades and Trump distancing from rival altcoins, all eyes are now on a potential push toward $2,700. 

BTC spot ETFs saw $920.9M in net inflows this week, driven by $1.09B into non-GBTC funds despite $171.5M outflows from GBTC. Since inception, total net inflows stand at $41.1B.

 are now live and claimable as a small bonus for users farming the upcoming Aster (AST) airdrop. By depositing BNB to mint asBNB, users can start earning points toward both the main airdrop and future ecosystem rewards. Optional perp trading can boost points further, but simply holding asBNB is enough to qualify.

Ethereum outperforms with a 20% rally as fresh capital flows in and undervaluation signals flash

Bybit Learn

Blockchain

Bluzelle is a Cosmos-based blockchain that allows the GameFi community to develop quality blockchain games, store game NFTs and leverage DeFi yields.

 is a decentralized network that’s transforming the way digital creations are stored on the 

. Its main goal is to provide users with the necessary tools, features and technical capacity to store and manage data without censorship. This detailed analysis of the project will help potential investors decide if they want to invest in BLZ, its native token.

According to its official website, the project’s three main features are quality play-to-earn (P2E) games, decentralized storage and financial products related to GameFi.

 in 2014. The co-founders initially focused on developing 

 for banks. Ultimately, the team realized an urgent need for a decentralized storage system for DApp developers. The decentralized storage would allow GameFi participants to scale and store their data without the drawbacks associated with a centralized database.

To meet the storage needs of decentralized apps, the Bluzelle blockchain relies on a system of participants who provide storage space to users. A user rents as much storage space as needed at a reasonable price. Since no central governing body regulates the mechanism, everything takes place in a decentralized environment.

Those who provide the storage are known as producers, and those who use the service are known as consumers. The innovative system of producers and consumers ensures that DApp developers can build GameFi apps without worrying about their storage needs. Likewise, gamers can store NFTs and manage their storage needs without the high cost associated with such tasks.

While Bluzelle is not the only project offering this solution, it has quite a few unique characteristics. For instance, it's one of the few blockchains designed specifically for GameFi. It also offers decentralized web hosting on the Bluzelle testnet. Similarly, the technology is compatible with multiple blockchain platforms.

Other features that make it stand out among competitors are:

The primary purpose of the Bluzelle blockchain is to provide scalable, safe and fast database services for the development of DApps. Game developers and GameFi participants will have the required capacity to store and use the massive amount of data needed to operate GameFi apps in a Web 3.0 environment.

While there are a variety of blockchain projects that offer general file storage, such database services don't address the needs of GameFi developers and players. Most of these services are centralized, unsecured and expensive.

To solve the riddle, the Bluzelle network relies on participants to rent out their redundant storage to developers and other users. In order to encourage participation, any participant who shares their storage is compensated with BLZ.

As mentioned, network participants who share their storage are known as producers, while those who use the storage are known as consumers. Whenever a consumer uploads data, it is stored across clusters of nodes spread across the globe. The storage space on multiple nodes prevents problems caused by network faults, human interference and natural calamities. Besides offering security, the configuration also makes data locally accessible to DApp developers, resulting in faster performance.

Since anyone can become a producer, the blockchain uses strict parameters to maintain reliability. For instance, if you want to rent your storage space, you’ll need to stake BLZ in proportion to the space you provide. As an internal token, BLZ helps run the Bluzelle crypto economy.

Staking BLZ serves as a guarantee to consumers that you intend to provide a reliable service. If the service is substandard, the consumer has the right to ask for a refund.

 to analyze the performance of individual producers. A below-par service will reduce your Karma Index. In contrast, if your Karma Index is high, you can charge a higher storage fee consummate with your reputation.

It's worth noting that Bluzelle uses a dual-token system: BLZ and ERC-20 BLZ. The native token within the blockchain is BLZ. In contrast, the ERC-20 BLZ is an external token used for trading on exchanges. It's based on the 

 concept, and you can buy it from any one of the crypto exchanges that offers it.

Bluzelle is designed for GameFi enthusiasts; and from a user perspective, the entire ecosystem revolves around GameFi. Here are some features to help you understand its utility.

Real-time gameplay consists of a four-stage game loop. You can battle others and play in tournaments. Winning battles will give you game currency and open additional options for players on the leaderboard. You can use BLZ to invest, 

 tokens, while your NFTs can be stored on the decentralized storage network, 

Bluzelle Net is a Cosmos-backed proof-of-stake ledger that can complete 10,000 transactions per second at a minimal cost to the user. The Bluzelle network is powered by 

 technology. This combination of Cosmos and Tendermint is particularly useful for database applications.

Bluzelle R2 is often dubbed a solution to the existing 

 (IPFS) protocol, currently used to store NFTs.

While IPFS is considered the gold standard, its lack of immutability is a concern. IPFS offers decentralization, but doesn't assure decentralized storage. In other words, an NFT sits on a single node that can go down without any option to recover it. This is where the R2 storage comes into play.

The Bluzelle R2 decentralized storage network is particularly useful for storing NFTs and related data. Amid the rise of R2, several NFT communities shifted their resources to decentralized storage. It's reliable because it stows data across multiple nodes around the world. In addition, the technology uses a consensus mechanism that ensures only you can update your data.

The Bluzelle project lets users aggregate DeFi projects in the Cosmos ecosystem. It 

 with leading Defi Aggregator Frontier to support staking on mobile platforms, using its native token. Users can lend, earn and stake a yield on blockchain game assets.

Similarly, Tidal Finance, a Balancer-like insurance market, allows users to create customizable insurance pools. In this 

, buyers retain their ability to transfer their insurance contracts via the tradable insurance tokens.

Over the years, the Bluzelle development team has partnered with many notable DeFi projects to expand their ecosystem. These partnerships include such notable names as Ankr,  Equilibrium, Phala Network, Mintable.app, TomoChain and Genesis Shards.

 are designed differently from those of other networks. Instead of receiving a fixed amount of rewards, users receive daily variable rewards based on existing market conditions. The unique staking mechanism is conceived to encourage loyalty, tenure and larger stakes.

There are two types of staking rewards: Network fees and incentive rewards. Rewards from network fees are shared among all participants according to their stakes in the network. Validators are also allowed to get a commission from delegators. You can see your rewards in the staking dashboard.

Incentive rewards encourage users to participate in the network at an early stage. Such rewards are distributed daily. You’ll not see these rewards in the dashboard. Instead, they show up directly on your available balance sheet.

At this time, the official website doesn't endorse a particular wallet. However, you can store BLZ on various third-party wallets, such as Ledger and Trezor. You can also store and stake the native token on the Frontier mobile wallet. 

As an all-inclusive GameFi ecosystem that offers lucrative game development and investing opportunities, Bluzelle makes sense as an investment opportunity. Here’s why:

The team behind Bluzelle is actively trying to solve real-world problems; however, there are a couple of loopholes that require critical insight. Before investing, keep an eye on the following:

Bluzelle provides safe and secure data storage services.

 is one of many organizations that have successfully used the BLZ blockchain to store its data on secure clusters. Using the blockchain, Quadrant can offer 100% decentralized data asset verification to its users without relying on traditional centralized sources and cloud solutions.

Bluzelle has a variety of other uses. For instance, it has partnered with

 to offer user-friendly domain name and database operations to both tech and non-tech users. With Portal Network, users can buy a customized, human-readable domain name for their crypto wallet address. The resulting webpage can also interface with the Bluzelle database for 

After the launch of the mainnet in early 2021, the team focused on three major tracks: Mainnet, Oracles and Polkadot. Here’s an overview of Blluzelle’s recent developments:

Several new features were added to the mainnet: Support for 

, inter-blockchain connections with other chains, and docker support for quick setup of new nodes. As of mid-2022, the team is actively working on improving network governance and designing a proof of storage protocol.

 will showcase the power of its database, which is why the development team is giving the oracles their utmost attention. Due to the great demand for decentralized database storage, the team is striving to offer inter-blockchain support, as well as ensuring advanced security triggers, fast pricing intervals and high-quality price data. The team even employs a five-step data-cleaning process to make certain the prices given are the most fair and accurate at the time.

: By the end of 2022, the team expects to achieve full interoperability with 

. This requires designing a viable economic model of using DOT to pay for Bluzelle services.

There’s a total supply of 500 million BLZ. Almost 10% of the tokens are reserved for staking rewards. The initial coin offering (ICO) helped raise $19.5 million when it launched in January 2018.

Currently, there are approximately 340 million BLZ in circulation. 

As mentioned above, the Bluzelle ecosystem uses a dual token system: ERC-20 BLZ and BLZ. The ERC-20 BLZ is an external token used for trading in exchanges, while BLZ is a native token within Bluzelle's own blockchain. Both tokens can be used to: 

You can buy BLZ from any of the popular crypto exchanges. Bybit is among the very few crypto exchanges that also offer BLZ as a perpetual contract. Perpetual contracts are similar to spot trades, but they offer traders an opportunity to hold a leveraged position. You can trade them as easily as traditional crypto without worrying about the expiration date.

Follow these guidelines to buy BLZ/USDT perpetual contracts on Bybit:

, you’ll need to buy USDT before converting it to BLZ.

Bybit offers a variety of ways to buy USDT, e.g., with your credit card. Depending on your location, Bybit may also offer deposit methods that include bank transfer, local third-party payment processing and Google Pay.

After completing the transaction, the USDT amount will show on your account.

 section from the top menu of the Bybit page. Select 

to purchase BLZ/USDT perpetual contracts.

It's logical to evaluate a cryptocurrency based on its utility, team, road map, major investors and community.

Bluzelle has a lot in its favor. Its founders have years of experience working in the gaming industry. Similarly, the project has extensive utility for GameFi apps and the related ecosystem. It has also forged strong partnerships with other companies.

Even with these advantages, there’s room for improvement. For instance, it's often difficult to find documentation, working papers and a road map for the project. The official website lacks pertinent information. Perhaps this is one of the main reasons why Bluzelle is still trying to attract a fervent following, despite the project's appeal to gaming enthusiasts.

Generally, Bluzelle is a good investment because it offers opportunities to investors who are willing to hold onto it long-term.

Since 2019, the price and the market share of BLZ have increased significantly. Now it's up to the team to convince the GameFi community to support their project. Ultimately, the response from gamers and game developers will dictate the direction of Bluzelle in the coming months.

Bluzelle helps solve real-world problems that have hindered GameFi development. It's well-positioned to become a leader in the GameFi world. If you're thinking about investing in Bluzelle, it's wise to evaluate it from a long-term perspective. Successful marketing of the project, community development, and a streamlined road map are essential for its future development. 

Bluzelle (BLZ): The Cosmos-Based Blockchain for GameFi

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