CRS Highlights Unsettled Crypto Policy Issues

In a report on the cryptocurrency industry, the Congressional Research Service ("CRS") identified legislative and regulatory policy issues Congress has yet to resolve. 

CRS described the dramatic growth of the crypto market, which reached a peak capitalization of $4 trillion in October 2025, a scale that underscores the absence of a comprehensive federal framework. The researchers highlighted tangible progress toward a comprehensive cryptocurrency market structure framework. CRS pointed to legislative progress in the passage of the GENIUS Act in July 2025, which established the first federal framework for payment stablecoins and the House passage of the Digital Asset Market Clarity Act ("CLARITY Act"). On regulation, CRS pointed out that the SEC dropped its enforcement action against a major exchange, rescinded restrictive accounting guidance that had limited bank participation in crypto custody, and launched "Project Crypto" in collaboration with the CFTC to build a coordinated regulatory framework. Banking regulators similarly rolled back crypto-related restrictions and warnings issued under the Biden Administration. CRS cautioned that guidance-based regulation remains inherently fragile - subject to reversal with each change in administration - underscoring why durable congressional legislation remains a priority.

CRS emphasized that the U.S. still has no overarching federal framework for regulating cryptocurrency, and that the question of which agency oversees which digital assets remains unsettled even as Congress advances market structure legislation. CRS identified several policy issues Congress has yet to resolve:

• the division of regulatory authority between the SEC and the CFTC;
• a perceived gap in federal oversight of spot markets, which legislation, would likely be needed to close;
• how to classify and taxonomise the thousands of distinct digital assets;
• the treatment of decentralized finance;
• illicit finance and fraud, with the FBI reporting more than $9 billion lost in 2024 crimes involving crypto, up 66 percent from 2023; and
• ethics questions tied to President Trump's and his family's crypto holdings.

On decentralized finance, CRS said both the House and Senate bills largely exempt DeFi protocols, software developers, and blockchain validators from the new regulatory requirements — a stance backed by industry groups who argue that imposing compliance burdens on decentralized systems would push development offshore. Critics counter that carving out DeFi from rules applied to centralized platforms creates a regulatory arbitrage opportunity and leaves meaningful illicit finance risks unaddressed. CRS cited FBI estimates of over $9 billion in crypto-related fraud losses in 2024, up 66% year-over-year, and that Treasury has flagged limited BSA/AML compliance among DeFi entities.

On ethics questions, CRS said that President Trump's personal involvement in crypto ventures (including meme coins and a stablecoin) has prompted calls from legislators for explicit conflict-of-interest provisions in market structure legislation. While the GENIUS Act included a broad rule of construction affirming that existing ethics laws apply, it stopped short of an explicit ban, leaving the enforceability of those provisions legally ambiguous. CRS said that ethics may prove to be the pivotal sticking point before any bill reaches the President's desk.