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Crypto Law/Level I · What crypto is in law/1.1 Why law reaches crypto/Lesson 2

Who makes crypto law: legislators, regulators, courts

The three main sources of crypto law in the United States, how they check one another, and where to find what each one has actually said.

Education, not legal, tax or investment advice. Crypto law differs between countries and states and changes often. Check the current rules where you live with a qualified lawyer or tax adviser before you act.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. All primary sources are free: statutes on congress.gov and govinfo.gov, rules on federalregister.gov and ecfr.gov, IRS notices on irs.gov. Reading the original instead of paying for summaries is the cheapest protection, provided you check the date and whether it was later amended or overturned.
  2. Following published IRS guidance such as Notice 2014-21 or Revenue Ruling 2023-14 counts as authority under Treas. Reg. §1.6662-4(d)(3)(iii), which can defeat the 20% accuracy penalty; the tax itself is still owed, and later guidance can change the position prospectively.
  3. Commenting on a proposed federal rule through regulations.gov costs nothing and enters the official record the agency must consider under 5 U.S.C. §553; it only counts if filed before the stated comment deadline.
  4. Since Loper Bright (28 June 2024) courts read statutes themselves, so an agency reading that raises your cost can be contested in court; that route needs counsel and is worth paying for only where the amount at stake clearly exceeds legal fees.

MaterialsCongress.gov, with the ‘Actions’ tab for a bill such as H.R. 3633 (the CLARITY Act) or S. 1582 (the GENIUS Act)IRS Notice 2014-21, the first federal tax guidance on virtual currencyThe Supreme Court’s opinion in Loper Bright Enterprises v. Raimondo (decided 28 June 2024)Your state financial regulator’s web page on virtual currency or money transmission

Wonder

  1. Is there one crypto law, or many pieces from different places?
  2. Can a government agency make rules that Congress never voted on?
  3. What happens when a court disagrees with a regulator?

Explore

  1. Crypto law in the United States comes from three main sources. Legislators pass statutes, which are written laws such as acts of Congress or state legislatures. Regulators are government agencies that write detailed rules, called regulations, under powers a statute gives them, and that enforce the law. Courts decide disputes and say what statutes and regulations mean. The same split exists at state level, and most other countries have a similar structure. Knowing which of the three produced a rule tells you how strong it is and how easily it can change (lesson 1.1.3).
  2. Congress has passed only a few laws aimed directly at crypto. The GENIUS Act, a federal law on payment stablecoins, was signed on 18 July 2025 as Public Law 119-27; it takes effect 18 months after enactment or 120 days after regulators issue final rules, whichever is earlier (lesson 3.2.4). The Digital Asset Market Clarity Act (H.R. 3633) passed the House on 17 July 2025 by 294 to 134. In the Senate, a vote to limit debate and begin considering it failed 49 to 50 on 15 September 2026, so as of October 2026 it is not law (lesson 3.2.5).
  3. Congress can also cancel agency rules. Under the Congressional Review Act, both chambers can pass a resolution disapproving a rule, which takes effect if the President signs it. On 10 April 2025 a resolution became Public Law 119-5, overturning an IRS rule that would have required certain decentralised-finance platforms to report users’ digital asset sales as brokers. An earlier resolution against an SEC accounting bulletin on crypto custody was vetoed on 31 May 2024, and the House failed to override the veto on 11 July 2024 (lesson 1.1.3).
  4. Federal agencies fill in most of the detail. The SEC handles securities, the CFTC commodities and derivatives, FinCEN anti-money-laundering rules, the IRS tax, and OFAC sanctions (lessons 1.3.1 to 1.3.5). Each can act only within the powers Congress has given it. Agencies also publish guidance: IRS Notice 2014-21, released on 25 March 2014, said that virtual currency is treated as property for federal tax purposes, which is why selling or spending it can produce a taxable gain (lesson 2.1.1).
  5. Courts have the final word on what the law means. In Grayscale Investments v. SEC, decided on 29 August 2023, the US Court of Appeals for the D.C. Circuit found that the SEC had not adequately explained why it rejected a proposed bitcoin fund, and vacated its decision; the SEC approved spot bitcoin exchange-traded products on 10 January 2024 (lesson 3.2.7). In Loper Bright Enterprises v. Raimondo, decided on 28 June 2024, the Supreme Court overruled the Chevron doctrine, so courts must now use their own judgment on what a statute means instead of deferring to an agency’s reasonable reading.
  6. States add another layer. New York’s BitLicense regulation, 23 NYCRR Part 200, took effect on 24 June 2015 and requires a licence for virtual currency business activity involving New York or its residents (lesson 1.3.6). Other states regulate crypto businesses through money transmitter laws (lesson 5.2.2). Outside the US, the European Union applies a single regulation, MiCA, across its member states (lesson 3.3.1). A practical check: when you meet a crypto rule, write down who made it (legislature, agency or court), which jurisdiction it covers, and where the original text is published.

Key facts

  • The GENIUS Act was signed on 18 July 2025 and became Public Law 119-27.
  • The House passed the Digital Asset Market Clarity Act (H.R. 3633) on 17 July 2025 by a vote of 294 to 134.
  • On 15 September 2026 a Senate vote to limit debate on proceeding to the CLARITY Act failed 49 to 50, and the bill was not law as of October 2026.
  • Public Law 119-5, signed on 10 April 2025, overturned an IRS rule on broker reporting by certain decentralised-finance platforms.
  • IRS Notice 2014-21, released on 25 March 2014, treats virtual currency as property for US federal tax purposes.
  • In Loper Bright Enterprises v. Raimondo (28 June 2024) the Supreme Court overruled Chevron deference to agency readings of statutes.

Exercise nine, six, three, one

9CollectList up to 9 crypto rules or legal statements you have heard about, such as a tax rule, a licence requirement, a court ruling or a new law.
6ClusterSort them into 6 categories: federal statutes, federal agency rules, agency guidance or statements, court decisions, state laws, and laws of other countries.
3DistillReduce the 6 categories to 3 groups: rules that bind you now, rules that are pending or could change soon, and statements whose legal force you would need to check.
1CrystallizeWrite 1 sentence explaining, in your own words, why it matters whether a crypto rule came from a legislature, an agency or a court.

Fact check

Dates, figures and claims checked against the published sources listed below.

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