2025 Outlook: Future of Crypto Securities Law in the US

Crypto securities law is a framework of rules that decides whether a digital asset counts as a security and how it must be offered, traded, and supervised in the United States. After years of back‑and‑forth between regulators, courts, and industry, 2025 has turned into a watershed moment. New federal bills, a bold SEC overhaul, and coordinated state action are converging to give the market the predictability it has long craved.

Key Takeaways

• The GENIUS Act, signed July2025, is the first comprehensive federal crypto statute, focusing on stablecoins and consumer safeguards.
• SEC Chair Paul Atkins’ Project Crypto flips the traditional “most crypto assets are securities” stance, promising clearer guidance on the Howey test.
• State regulators, organized through NASAA, are pushing for strong antifraud powers while shaping federal language.
• Three bills-GENIUS, CLARITY, and the Anti‑CBDC Surveillance State Act-create a legislative triad that addresses stablecoins, market structure, and digital‑currency policy.
• Banking integration and safe‑harbor provisions are poised to let traditional institutions offer crypto custody without drowning in regulatory risk.

Legislative Breakthroughs of 2025

July18,2025 will be remembered as "Crypto Week" on Capitol Hill. Lawmakers delivered three major proposals that together sketch the future of crypto securities law.

The Guiding and Establishing National Innovation for US Stablecoins Act, known as the GENIUS Act, was signed into law by the President. It sets a clear definition for "stablecoin", imposes reserve‑backing requirements, and creates a federal licensing regime for issuers. The act also earmarks a $200million grant program to help fintech startups develop compliant stablecoin products.

The Digital Asset Market Clarity Act of 2025 (CLARITY Act) passed the House on the same day and now awaits Senate approval. Its core goal is to codify the definition of a "digital asset security" and to grant the SEC authority to issue purpose‑fit exemptions for ICOs, airdrops, and network rewards.

Finally, the Anti‑CBDC Surveillance State Act blocks the Federal Reserve from launching a central bank digital currency without explicit congressional authorization, reflecting concerns about privacy and monetary control.

Senator Bill Hagerty (R‑TN) summed up the atmosphere: "2025 is a pivotal year for digital‑asset legislation; these bills keep America at the forefront of innovation while protecting investors." The Senate Banking Committee aims to move market‑structure legislation out of committee by September30,2025, signaling rapid momentum.

SEC’s Project Crypto Initiative

On July31,2025, SEC Chair Paul Atkins announced Project Crypto, a sweeping regulatory reform designed to modernize securities law for on‑chain activity. The initiative stems from President Trump’s January executive order that declared America the "crypto capital of the world".

Project Crypto’s headline shift is simple yet profound: "most crypto assets are not securities." Rather than applying the Howey test mechanically, the SEC will publish a decision‑tree that weighs factors such as token utility, governance rights, and the presence of profit‑expectation mechanisms. The rulemaking process will include a public notice, comment period, and a final rule expected by early 2026.

Key deliverables under Project Crypto include:

1. Clear criteria for determining when a digital token triggers securities law.
2. Purpose‑fit safe harbors for ICOs, airdrops, and network‑reward distributions.
3. Updated custody rules that recognize self‑custody and on‑chain voting rights.
4. Guidance for registered intermediaries (broker‑dealers, exchanges) on on‑chain reporting.

The SEC also directed staff to draft a single set of rules that apply uniformly to both digital and traditional securities, eliminating the patchwork of guidance that has confused market participants for years.

State Regulators and the NASAA Coalition

State securities regulators, coordinated through the North American Securities Administrators Association (NASAA), are playing a dual role. On one hand, they submit comments to congressional committees on the GENIUS and CLARITY bills; on the other, they continue aggressive enforcement against fraudulent crypto schemes.

NASAA’s chief concern is that a narrow federal definition of "investment contract" could undercut long‑standing state antifraud powers. The association has urged lawmakers to preserve a broad, flexible interpretation of the Howey test, allowing states to intervene when investors are misled, even if the federal regulator classifies the token as a utility.

Recent state actions include:

• California’s Department of Financial Protection & Innovation closing a $12million Ponzi‑style token offering.
• New York’s Attorney General filing an injunction against an unregistered crypto fund that promised guaranteed returns.
• Texas securities regulators negotiating a memorandum of understanding with a major crypto exchange to share transaction data for fraud detection.

Technical Implementation: The Howey Test Re‑Examined

The Howey test-"investment of money, common enterprise, expectation of profits, and efforts of others"-has been the litmus paper for crypto securities for a decade. Project Crypto acknowledges the test’s utility but proposes a tiered approach:

• Tier1: Pure utility tokens with on‑chain governance rights but no profit expectation-exempt.
• Tier2: Tokens that confer a share of future platform revenue-subject to tailored registration.
• Tier3: Tokens marketed primarily as investment opportunities-full securities treatment.

By codifying these tiers, the SEC hopes to reduce litigation risk for developers and give investors clearer disclosure expectations.

Market Structure and Banking Integration

Federal banking regulators have released joint guidance that allows federally chartered banks to provide custodial services for digital assets, provided they meet AML/KYC standards and maintain a segregated ledger. This guidance dovetails with the GENIUS Act’s reserve‑backing rules for stablecoins, creating a bridge between traditional finance and the on‑chain economy.

Key points for banks include:

1. Mandatory insurance coverage for custodial holdings up to $250,000 per customer.
2. Regular stress‑testing of crypto‑exposure scenarios.
3. Disclosure of custody methodologies in quarterly reports.

These provisions aim to prevent the "bank‑run" style panic that plagued early crypto exchanges and to give institutional investors the confidence to allocate capital to digital assets.

Comparison of the 2025 Legislative Trio

Looking Ahead: 2026 and Beyond

The regulatory momentum of 2025 sets a clear path for the next few years. By early 2026 we can expect:

• The final SEC rulebook from Project Crypto, likely rolling out in phased modules.
• Senate approval of the CLARITY Act, which would cement the SEC’s new exemption framework.
• State‑level adoption of NASAA‑recommended antifraud provisions, creating a uniform enforcement net.
• First‑generation federally chartered stablecoin issuers launching under GENIUS‑compliant reserves.
• Increased participation of legacy banks in crypto custody, spurred by the joint banking guidance.

These steps aim to balance innovation with investor protection. If the roadmap holds, the U.S. could regain its edge in crypto finance, attracting talent and capital that have migrated to friendlier jurisdictions.