Crypto Compliance Checker
Compliance Summary
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If you're running a crypto business, trading digital assets, or just holding Bitcoin in your wallet, you need to know one thing: crypto regulations in the U.S. aren't set by Washington alone. They're shaped by 50 different state governments, each with their own rules, loopholes, and roadblocks. As of October 2025, there’s no single national law for cryptocurrency. Instead, you’re navigating a patchwork of state laws that can make it legal to operate in one place and a legal minefield in another.
New York: The Strictest State for Crypto
New York doesn’t just regulate crypto-it controls it. Since 2015, the state has required every crypto business operating within its borders to get a BitLicense from the Department of Financial Services (NYDFS). This isn’t just a form you fill out. It’s a multi-month, multi-thousand-dollar process that demands detailed audits, compliance officers, cybersecurity plans, and ongoing reporting. Many startups gave up and moved out of state before even launching.
The BitLicense system was meant to protect consumers, but it’s become a barrier to entry. In 2025, only about 40 companies hold active BitLicenses. That includes big names like Coinbase and Gemini, but excludes hundreds of smaller exchanges, wallet providers, and DeFi platforms. If you’re a crypto business and you don’t have a BitLicense, you can’t serve New York customers-even if you’re based in Texas. The state enforces this aggressively. In 2024 alone, the New York Attorney General settled with five crypto firms for over $120 million in penalties for operating without a license.
California: Innovation With Oversight
California takes the opposite approach. Instead of blocking innovation, it tries to guide it. The Department of Financial Protection and Innovation (DFPI) doesn’t require a blanket license like New York. Instead, it uses existing money transmission laws to regulate crypto firms on a case-by-case basis. If your business is handling customer funds, you’ll likely need a money transmitter license. But if you’re just building a wallet app that doesn’t hold keys, you might not need one at all.
What makes California unique is its pro-innovation stance. In early 2025, the DFPI launched a regulatory sandbox that lets startups test new crypto products under supervision without full licensing. Over 30 companies have entered the sandbox, including DeFi protocols, NFT marketplaces, and tokenized real estate platforms. The state also passed a law requiring crypto firms to disclose fees and risks clearly to users-no fine print, no hidden terms.
California doesn’t have a crypto-specific license, but it has the most active crypto scene in the country. Over 60% of U.S.-based crypto startups are headquartered in California. Why? Because the rules are clear enough to follow, but flexible enough to grow.
Federal Shifts Are Changing the Game
While states were busy writing their own rules, Washington finally started moving. On September 2, 2025, the SEC and CFTC issued a joint statement that changed everything. For the first time, they agreed: registered national exchanges can list spot crypto assets-even those with margin or leverage. That means platforms like Coinbase and Kraken can now offer Bitcoin trading with 3x leverage without fear of being sued by the SEC.
That same month, the Office of the Comptroller of the Currency (OCC) issued Interpretive Letter 1183, which lets national banks custody crypto, hold stablecoins, and run blockchain nodes without needing special approval. This reversed the Biden-era policy that required banks to get permission before touching crypto. Now, JPMorgan, Wells Fargo, and Bank of America can offer crypto services the same way they offer wire transfers-no extra paperwork, no supervisory hold.
The biggest change came in July 2025, when President Trump signed the GENIUS Act into law. This is the first federal law that regulates stablecoins. Issuers must now back every stablecoin with cash, Treasury bills, or other highly liquid assets. They must also publish monthly audits and submit to federal supervision. Tether and USDC now operate under this law. If they don’t comply, they lose their ability to operate in the U.S.
Most States: Still Waiting
Outside of New York and California, most states haven’t passed any crypto-specific laws. They’re still using old financial rules-anti-money laundering laws, securities regulations, and money transmitter statutes-to handle crypto. That means:
- In Texas, you can mine Bitcoin without a license, but if you’re selling crypto to residents, you might need a money transmitter license.
- In Florida, the state attorney general has sued several crypto firms for unregistered securities offerings, but there’s no formal licensing system.
- In Wyoming, you can incorporate a DAO as a legal entity, and crypto businesses pay no state income tax. It’s the most crypto-friendly state in the country.
- In Illinois, crypto is treated as property for tax purposes, but there’s no clear guidance on how exchanges should report transactions.
There are about 15 states with some form of crypto-specific legislation. Wyoming leads with its DAO and crypto asset laws. Vermont allows blockchain-based land titles. Ohio has a blockchain innovation zone with tax breaks. But most states-like Pennsylvania, Georgia, and Michigan-have no rules at all. That doesn’t mean crypto is illegal there. It just means you’re operating in a legal gray zone.
What You Need to Do Right Now
If you’re a crypto business, here’s what you must do:
- Check if your state requires a license. If you’re in New York, get a BitLicense. If you’re in Wyoming, register as a DAO.
- Know where your customers are. Even if your business is in Nevada, if you serve customers in California, you need to follow DFPI rules. If you serve New Yorkers, you need a BitLicense-even if you’re based in Florida.
- Follow federal rules. The GENIUS Act applies nationwide. If you issue or trade stablecoins, you must comply with the new reserve and audit requirements.
- Monitor state attorneys general. They don’t need a law to sue you. The New York AG has gone after small crypto firms with under $1 million in revenue. If you’re not compliant, you’re a target.
If you’re an investor, here’s what matters:
- Exchanges that list spot crypto with leverage (like Bitcoin with 5x margin) are now legal in most states thanks to the SEC-CFTC joint statement.
- Stablecoins like USDC and USDT are now federally regulated. That means they’re safer-but not risk-free.
- Don’t assume your state’s rules are the same as your neighbor’s. A crypto tax rule in Oregon doesn’t apply in Alabama.
The Big Picture: A Nation Divided
The U.S. crypto landscape isn’t broken-it’s evolving. The federal government is finally stepping in with clear rules for stablecoins and bank participation. But states still hold the power over who can operate, who gets licensed, and who gets sued.
That’s why the future of crypto in America won’t be decided in Congress alone. It’ll be decided in statehouses. States like Wyoming and California will keep attracting innovation. New York will keep its tight grip. And the rest? They’ll watch, wait, and slowly follow.
The message is clear: if you want to build in crypto, you can’t ignore state laws. You need to know where you’re allowed to operate, who you need to report to, and what happens if you slip up. The days of federal confusion are ending. But the days of state-by-state complexity? They’re just beginning.
Is cryptocurrency legal in all 50 states?
Yes, owning and trading cryptocurrency is legal in all 50 states. But operating a crypto business-like an exchange, wallet provider, or stablecoin issuer-is not. Each state has its own rules. New York requires a BitLicense. Wyoming lets you register a DAO. Most other states rely on old money transmission laws. You can hold Bitcoin anywhere, but you can’t run a business without checking your state’s requirements.
Can I use Coinbase in New York?
Yes, Coinbase is licensed in New York and holds a BitLicense. That means you can buy, sell, and store crypto on Coinbase in New York. But if you’re trying to start your own crypto exchange in New York, you’ll need to get your own BitLicense-which is expensive, time-consuming, and rarely granted to new companies. Most startups avoid New York entirely because of this.
What’s the difference between a BitLicense and a money transmitter license?
A BitLicense is specific to New York and covers a broader range of crypto activities: custody, trading, staking, and even running blockchain nodes. A money transmitter license is a general state license that applies to any business handling customer funds-including wire transfers, check cashing, and crypto exchanges. Most states use money transmitter licenses for crypto. New York added the BitLicense on top of that, making it stricter and more detailed.
Are stablecoins regulated now?
Yes, as of July 2025, the GENIUS Act requires all stablecoin issuers operating in the U.S. to back every coin with cash, U.S. Treasuries, or other highly liquid assets. They must also publish monthly audits and submit to federal supervision. This applies to USDC, USDT, and any new stablecoin. If they don’t comply, they can’t operate in the U.S. This is the first time stablecoins have been federally regulated.
Can banks hold crypto now?
Yes. Since March 2025, national banks and federal savings associations can custody crypto, hold stablecoins, and participate in blockchain networks without needing special approval from regulators. This was a major shift from the Biden administration’s policy, which required banks to get permission before touching crypto. Now, banks can offer crypto services like they offer checking accounts-no extra steps, no supervisory hold.
What states are the most crypto-friendly?
Wyoming is the most crypto-friendly. It allows DAOs to be legal entities, has no state income tax, and passed laws protecting blockchain developers. California is next-its regulatory sandbox lets startups test new products safely. Texas and Florida are also popular because they don’t have crypto-specific taxes or licensing rules. New York is the least friendly due to the BitLicense. Most other states fall somewhere in between.
Will federal law override state laws?
Federal law can override state law, but only if it’s clear and direct. The GENIUS Act sets national rules for stablecoins, so those rules apply everywhere. But for other crypto activities-like licensing exchanges or taxing crypto gains-states still have authority. The pending CLARITY Act could change that by giving the CFTC exclusive jurisdiction over crypto markets. Until then, you must follow both federal and state rules.
Cryptocurrency Guides
Eli PINEDA
October 31, 2025 AT 15:02sooo like... if i hold btc in california but my friend in ny buys from me, am i technically breaking the law? idk i’m just tryna send my homie some satoshis 😅
Debby Ananda
November 1, 2025 AT 10:37Wow. Just... wow. 🤦♀️ Of course the government can’t just let crypto be free-someone has to control the narrative. New York’s BitLicense? More like a *corporate protection racket*. 😒
Vicki Fletcher
November 2, 2025 AT 14:22Wait-so if I live in Texas, but my crypto wallet is hosted on a server in Colorado, and I sell to someone in New York… do I need *three* licenses? I’m not even a business, I just hodl and occasionally trade… this is insane. 😵💫
Nadiya Edwards
November 3, 2025 AT 08:45They’re just trying to kill innovation under the guise of ‘consumer protection.’ This isn’t regulation-it’s control. The Fed’s been pushing this since 2020. The GENIUS Act? A trap. They’ll come for your coins next. You think USDC is safe? Think again. 🚩
Ron Cassel
November 3, 2025 AT 11:51Of course the SEC and CFTC ‘agreed’-they’re in bed together. This whole thing is a scam. Banks holding crypto? They’ll freeze your account the second you move $50k. Wake up. The deep state is laundering crypto through ‘regulated’ players. Coinbase? A puppet. 💀
Malinda Black
November 3, 2025 AT 19:14Hey everyone-just wanted to say if you’re new to this, don’t panic. The rules are messy, but you don’t need to be a lawyer to stay safe. Start by checking your state’s financial regulator website. If you’re unsure, ask in local crypto meetups. You’re not alone in this. 🌱
ISAH Isah
November 4, 2025 AT 01:32Regulation is an illusion of order in a chaotic system. The United States is not a nation but a federation of competing power centers. The BitLicense is not law-it is a territorial assertion. The GENIUS Act is not freedom-it is the consolidation of capital under federal auspices. The individual remains powerless
Chris Strife
November 4, 2025 AT 04:48Wyoming is a joke. DAOs? Tax breaks? Please. This is regulatory arbitrage dressed up as innovation. California’s sandbox is just a sandbox. Real innovation doesn’t need permission. The federal government is still the enemy. End of story.
Mehak Sharma
November 5, 2025 AT 20:01Imagine a world where your digital assets are as free as your thoughts-no licenses, no audits, no gatekeepers. That’s the dream. But here? We’re stuck in a maze of state-by-state bureaucracy. Still, I’m grateful for Wyoming’s courage and California’s openness. The future isn’t in D.C.-it’s in the code. Keep building. 🌍
bob marley
November 7, 2025 AT 12:49Oh wow. You actually believe this? The GENIUS Act? The ‘joint statement’? Please. This is all theater. They’re creating a two-tier system: Big players get licenses, small ones get sued. And you? You’re just the sucker buying USDC like it’s gold. 😏
Sammy Krigs
November 8, 2025 AT 01:47wait so if i live in ohio and use coinbase and my friend in ny uses it too… does that mean coinbase is breaking the law for serving ny? or is it because they have the license? i’m so confused now
naveen kumar
November 8, 2025 AT 02:49The GENIUS Act is a Trojan horse. Stablecoins are not money-they are debt instruments disguised as currency. The federal oversight is not protection-it is centralization. The states are distractions. The real battle is against the Federal Reserve’s monopoly on money creation. This is not progress. This is surrender.
Bruce Bynum
November 9, 2025 AT 12:11Bottom line: Know your state. Know your risks. Don’t overthink it. If you’re just holding or trading, you’re fine. If you’re building something? Get legal help. Simple. No drama. Just do it.
Wesley Grimm
November 11, 2025 AT 05:44Let’s not romanticize this. California’s sandbox is a PR stunt. Wyoming’s laws are unenforceable outside their borders. The BitLicense is a monument to regulatory capture. The federal moves? Cosmetic. The real power still lies with the banks, the lawyers, and the lobbyists. Nothing has changed. Just more paperwork.
Masechaba Setona
November 12, 2025 AT 21:29Of course the U.S. is divided. It always has been. But let’s be real-this isn’t about crypto. It’s about control. Who gets to decide what’s money? The state? The bank? The algorithm? We’re just pawns in a game we didn’t even know we were playing. 🤷♀️
Kymberley Sant
November 13, 2025 AT 18:02So like… if I’m in London but I trade with a NY-based exchange, does the BitLicense apply to me? I mean technically I’m not in NY but I’m still using their service? I’m so confused now 😅
Edgerton Trowbridge
November 14, 2025 AT 03:02It is imperative to recognize that the regulatory landscape of cryptocurrency in the United States is not merely a collection of disparate statutes; it is an evolving ecosystem shaped by federal preemption, state sovereignty, and the pragmatic realities of market participation. One must conduct a comprehensive jurisdictional analysis prior to engaging in any commercial activity involving digital assets. Failure to do so may result in significant legal, financial, and reputational consequences. I urge all stakeholders to consult with qualified legal counsel before proceeding.
Matthew Affrunti
November 15, 2025 AT 05:59Love this breakdown. Seriously. I’m just a regular guy who buys ETH every paycheck and I had no idea how wild the state rules are. Thanks for making it clear-now I know to check my state before I do anything big. Keep posting stuff like this!
mark Hayes
November 16, 2025 AT 07:35Wyoming for life 🚀 California’s sandbox is legit. NY? Nah. I just want to build something without lawyers breathing down my neck. Federal rules help but the real magic is still at the state level. Keep it decentralized, folks. 💪