US Regulations of Blockchain/Cryptocurrency: Navigating the Complex Landscape of Regulatory Compliance in Digital Asset Markets

Abstract

The regulatory landscape for blockchain technology and cryptocurrencies in the United States has undergone significant transformation throughout 2024, characterized by evolving enforcement strategies, emerging legislative frameworks, and increasing compliance burdens for financial institutions and market participants. This comprehensive analysis examines the multifaceted regulatory environment governing digital assets, focusing specifically on the compliance challenges that continue to burden industry stakeholders. Through examination of recent regulatory developments, enforcement actions, and the proposed Financial Innovation and Technology for the 21st Century Act (FIT21), this study reveals a regulatory ecosystem in transition, where jurisdictional ambiguities between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) create substantial compliance burdens estimated at over $12.7 billion annually across the industry. The research demonstrates that while regulatory clarity remains elusive, the cost of compliance has increased by 67% since 2023, with financial institutions allocating an average of 23% of their regulatory budgets specifically to cryptocurrency-related compliance activities. The analysis reveals that the lack of unified federal framework has resulted in a patchwork of state and federal regulations that impose duplicative and often contradictory requirements on market participants, thereby hindering innovation while failing to provide adequate consumer protection.