The US Crypto Puzzle: Why No New Law Creates More Risk

Executive Summary

While global financial centers like London and Singapore are establishing clear legislative frameworks for cryptoassets, the United States remains a glaring exception. The absence of a unified federal law for digital assets has not created a free market; instead, it has fostered a high-stakes environment of regulatory ambiguity. This "regulation by enforcement" approach, led by powerful and competing government agencies, poses one of the most significant and underestimated risks to businesses operating in the digital economy today. This report analyzes the strategic dangers of this regulatory uncertainty, outlines the key agencies shaping the landscape through litigation, and provides an actionable framework for business leaders to navigate this complex puzzle with strategic precision.

The Great Divide: The U.S. vs. Global Regulatory Approaches

The fundamental challenge for U.S. businesses is the stark contrast between the domestic and international approach to digital assets. Major economies are implementing bespoke legal frameworks, such as the European Union’s Markets in Crypto-Assets (MiCA) regulation, which provides clear rules for issuers, exchanges, and wallet providers. This approach provides certainty, reduces legal risk, and fosters innovation within defined guardrails.

The U.S., however, has chosen a different path. Instead of creating new laws, it is attempting to apply financial statutes drafted in the 1930s and 1940s to a decentralized, 21st-century technology. This creates a landscape where:

• Legal Precedent is Inconsistent: Court rulings in one district may conflict with those in another, leaving businesses without a definitive national standard.

• Innovation is Stifled by Fear: The risk of launching a new product or service only to have it retroactively deemed non-compliant by an agency action has a chilling effect on development.

• Global Competitiveness is Undermined: Capital and talent naturally flow to jurisdictions that offer greater legal and regulatory predictability.

The High Stakes of Ambiguity: Navigating "Regulation by Enforcement"

In the absence of clear legislation from Congress, the de facto rule makers for crypto in the U.S. are the regulatory agencies and the courts. Understanding their mandates and recent actions is critical for any business touching digital assets.

The Key Players and Their Positions

• The Securities and Exchange Commission (SEC): The SEC contends that the vast majority of cryptoassets are securities. By applying the Howey Test—a 1946 Supreme Court ruling on investment contracts involving citrus groves—the agency is aggressively pursuing enforcement actions against token issuers and exchanges for failing to register.

• The Commodity Futures Trading Commission (CFTC): The CFTC has classified Bitcoin and Ether as commodities, giving it authority over futures and derivatives markets. Its jurisdiction often clashes with the SEC's, creating turf wars that leave businesses caught in the middle.

• The Treasury Department (FinCEN & OFAC): Unrelated to the securities or commodities debate, the Treasury focuses on Anti-Money Laundering (AML) and sanctions enforcement. FinCEN requires crypto exchanges to adhere to the same stringent "Know Your Customer" (KYC) rules as banks, while OFAC has demonstrated its willingness to sanction entire protocols and wallet addresses.

This fragmented approach means a single digital asset can be subject to the rules of multiple agencies simultaneously, creating a compliance labyrinth that is expensive and complex to navigate.

A Strategic Framework for Digital Asset Risk

In this environment, a reactive, "wait-and-see" approach to compliance is a recipe for failure. Leaders must adopt a proactive and dynamic risk management framework that treats regulatory ambiguity as a core business risk.

Proactive Asset Classification

Do not wait for an agency to classify the assets your business interacts with. Conduct a rigorous, independent analysis based on existing case law and agency guidance to determine the likely classification of any digital asset on your balance sheet or platform. This internal assessment is a critical first line of defense.

Building an Enforcement-Ready Compliance Program

Design your compliance protocols based on the strictest potential interpretation of existing regulations. This means implementing robust AML/KYC policies that would satisfy a bank examiner, maintaining detailed records that could withstand SEC scrutiny, and ensuring your marketing language avoids claims that could be interpreted as promising investment returns.

Scenario Planning for Regulatory Shifts

Continuously model the potential impacts of future regulatory actions. What happens to your business model if a key asset you utilize is declared a security? What are the operational consequences of a new Treasury sanction? Running these scenarios allows you to build resilience and develop contingency plans before a crisis hits.

Future Outlook and Conclusions

Until Congress acts, the U.S. crypto market will be defined by uncertainty. This environment demands more than just technical compliance; it requires deep strategic foresight. Businesses that thrive will be those that view this regulatory puzzle not as a barrier, but as a strategic challenge to be managed with precision and intelligence.

Critical Success Factors:

• For Companies Holding Digital Assets:

  • Maintain meticulous documentation on the rationale for each asset's classification.

  • Establish clear policies for custody, accounting, and disclosure that reflect the asset's risk profile.

• For Fintechs and Payment Processors:

  • Prioritize regulatory strategy as a core component of product development.

  • Build relationships with legal and advisory partners who have deep expertise in this niche.

• For All Market Participants:

  • Treat regulatory monitoring as an essential, ongoing business function.

  • Balance the pursuit of innovation with a conservative and defensible compliance posture.

  • Maintain a high degree of operational and financial flexibility to adapt to sudden market or regulatory shifts.

The path forward in the U.S. digital asset market is complex, but it is not impassable. With a proactive strategy and an unwavering commitment to risk management, leaders can navigate the ambiguity and position their organizations for long-term success.

About the Author

Suresh Iyer turns financial uncertainty into strategic clarity. With 25 years spanning Big Four audit leadership, corporate finance, and fractional CFO work, he guides publicly traded companies and high-growth startups through IPOs, complex transactions, and transformational growth—bringing technical precision and forward-thinking strategy to organizations that refuse to settle for reactive reporting.

JHS USA provides comprehensive audit, tax, and advisory services built to provide clarity in complex markets. We help businesses navigate the intersection of technology, finance, and regulation.

Contact us to discuss your institution's digital asset and growth strategy.

This report is for informational purposes only and does not constitute financial, legal, or regulatory advice. Copyright © 2025 JHS USA. All rights reserved.