Article by Yi He
As the penetration of cryptocurrencies in the global financial market continues to increase, their decentralized and borderless characteristics have led to intense clashes with traditional financial regulatory systems. As the core hub of the global cryptocurrency market, the direction of U.S. regulatory policies not only determines the survival and development of the domestic crypto industry but also profoundly influences the global crypto landscape. Since the Biden administration took office, U.S. crypto regulation has shown a tightening trend characterized by "strict constraints and compliance emphasis." However, after the resurgence of the Trump administration's second term, the regulatory direction has shifted significantly toward "promoting innovation and defining boundaries."
This article will focus on the specific laws, regulations, and core policy measures during the two administrations, analyze the logic and impact behind policy differences through typical cases, and clearly present the evolution of U.S. crypto regulation.
- Biden Administration: The "Era of Strong Constraints" in Crypto Regulation (2021-2024)
During Biden’s tenure, the core attitude toward the crypto industry was "cautious and strict control," aiming to prevent financial risks from cryptocurrencies and combat illegal financial activities. Through a series of concrete actions, draft laws, and regulatory guidelines, a layered tightening of regulation was built, imposing strong constraints on the crypto industry.
1.1 Core Regulatory Measures: "Choke Point 2.0" and Industry Restrictions
The most influential regulatory initiative during Biden’s period was the joint effort by the U.S. Department of Justice and the Treasury Department called "Choke Point 2.0." This was not a single policy document but a targeted enforcement toolkit aimed at restricting cooperation between banks and crypto firms, controlling crypto industry funding channels.
Specifically, the measures included: first, requiring banks to conduct rigorous risk assessments—including AML, CFT, and KYC—before cooperating with crypto-related companies, significantly increasing compliance costs; second, applying regulatory inquiries and compliance checks to banks working with crypto firms, pressuring major U.S. banks like JPMorgan and Bank of America to reduce or terminate crypto-related services, such as deposit and settlement services for exchanges; third, classifying the crypto industry as a "high-risk" sector, requiring crypto firms to regularly submit detailed transaction and risk assessment reports, further squeezing operational space.
This led to liquidity constraints in the crypto sector, with many small and medium-sized firms struggling due to lack of banking services, and also suppressed innovation, exemplifying the Biden administration’s tightening stance.
Case 1: Silvergate Bank Collapse—Affected by "Choke Point 2.0" and systemic risks from the 2022 FTX collapse, Silvergate’s stock plummeted 92%, forcing it to exit stablecoin services and declare bankruptcy. Several regional banks also shut down crypto services, further cutting off fiat liquidity channels.
Case 2: Binance $4.3 Billion Settlement—In November 2023, Binance settled with U.S. regulators for violating AML and securities laws, paying a record fine of $4.3 billion, highlighting the strict enforcement at the time and marking a high-pressure regulatory approach.
1.2 Relevant Laws, Regulations, and Draft Policies
Although no dedicated crypto regulation law was enacted during Biden’s term, several draft laws and guidelines were proposed, gradually clarifying the regulatory framework centered on "crypto attribute recognition, trading platform regulation, and investor protection."
"Crypto Asset Regulatory Framework and Investor Protection Act" (2023): Proposed by Democratic lawmakers, this was the most representative legislative attempt. It defined most cryptocurrencies as "commodities," with those having securities attributes falling under SEC jurisdiction; mandated all trading platforms to register with the SEC and comply with disclosure, investor protection, AML, etc.; and prohibited false advertising, with penalties including fines and license revocations.
"Digital Asset AML Act" (2022): Focused on AML and CFT, requiring crypto exchanges and wallet providers to perform "beneficial owner identification" and report transactions to FinCEN in real-time; clarified regulations for P2P and cross-border crypto transfers, filling regulatory gaps.
Regulatory agency guidelines from SEC, CFTC, and Treasury further detailed requirements. Two additional key cases during Biden’s period include:
Case 3: SEC Lawsuit against Coinbase—On June 6, 2023, SEC sued Coinbase for operating unregistered securities transactions, alleging at least 13 tokens (Solana, Cardano, Polygon) as securities, avoiding disclosure requirements. Coinbase’s stock dropped over 20% intraday and 12% at close, exemplifying SEC’s enforcement.
Case 4: Criminal Charges against FTX Founder—Post-collapse, regulators investigated FTX’s founder, Sam Bankman-Fried, who was sentenced to 25 years for fraud and money laundering. This dual approach of corporate and individual accountability underscored the government’s crackdown and highlighted compliance risks.
Overall, Biden’s legal and policy framework aimed to incorporate crypto into traditional financial regulation through enhanced compliance and enforcement, effectively mitigating risks but also constraining innovation.
- Trump’s New Administration: The "Shift and Loosening" in Crypto Regulation (2025–present)
After starting his second term in 2025, Trump quickly shifted U.S. crypto policy, abandoning Biden’s tightening approach and establishing principles of "technology neutrality, encouraging innovation, and defining boundaries." Through executive orders, legislation pushes, and regulatory agency adjustments, the administration aimed to loosen restrictions and restore U.S. leadership in digital finance.
2.1 Core Executive Order: "Strengthening U.S. Leadership in Digital Financial Technologies"
In January 2025, Trump signed the "Executive Order on Strengthening U.S. Leadership in Digital Financial Technologies," which became the guiding document for his second-term crypto policy. It overturned many Biden-era measures, establishing three core principles:
Reversal of restrictive policies: Terminated "Choke Point 2.0," prohibited regulators from pressuring banks to cut ties with compliant crypto firms, and revoked several Biden-era guidelines, calling for re-evaluation to avoid overregulation.
"Technology Neutral" Principle: Emphasized that cryptocurrencies and traditional assets should be regulated under the same framework with appropriate adaptations, opposing differential regulation based on technical attributes, and urging agencies to consider innovation when drafting rules.
Two key positions: First, support for the legal development of private cryptocurrencies and their application in payments and financial services, viewing them as vital to U.S. financial innovation; second, a firm stance against the Fed issuing a CBDC, citing privacy concerns and potential erosion of dollar dominance, calling for the Fed to halt CBDC R&D and testing.
This order marked a shift from "tightening" to "loosening," boosting market confidence and sparking renewed activity in the U.S. crypto market.
Case 5: Presidential Pardons for Crypto Figures—During his second term, Trump pardoned key crypto industry figures, including Binance founder Zhao Changpeng, the BitMEX team, and Ross Ulbricht. In 2025, AML and sanctions fines dropped 61% from $430 million in 2024 to $170 million. The Fed also rescinded 2022 guidelines on bank crypto assets and stablecoins. These measures signaled a major policy shift, contrasting sharply with Biden’s approach.
2.2 Key Legislation: Building a Stablecoin and Crypto Market Framework
Since 2025, Trump’s administration has promoted several key bills, notably the "GENIUS Act," "STABLE Act," and "Digital Asset Market Clarity Act," which together aim to establish a clear regulatory framework:
"STABLE Act" (2025): The first U.S. law explicitly regulating stablecoins, classifying them as "payment tools" under the OCC, requiring issuers to be licensed financial institutions with reserves held at the Fed, and monthly disclosures of reserve audits. It prohibits issuing algorithmic stablecoins without full reserves, filling regulatory gaps and fostering integration with traditional finance.
"GENIUS Act" (2025): Full name "Crypto Asset Innovation and User Protection Act," emphasizing "encouraging innovation and strengthening user protection." It classifies cryptocurrencies as "commodities" (contrasting Biden’s "securities" classification), assigning CFTC oversight for daily trading, while SEC oversees securities tokens. It introduces a "Crypto Innovation Exemption" for startups, allowing 2-3 years of regulatory relief, and establishes an investor compensation fund to mitigate losses from platform violations or hacks.
"Digital Asset Market Clarity Act" (2025): Clarifies jurisdiction between SEC and CFTC, delineating their responsibilities—CFTC for trading derivatives and commodities, SEC for securities issuance and trading, and establishing a "Crypto Regulatory Coordination Committee" to prevent overlaps. It simplifies registration for compliant platforms, allowing them to operate both as derivatives and securities exchanges with separate licenses, improving efficiency.
2.3 Supporting Policies: Strategic Layout and Regulatory Optimization
Beyond executive orders and legislation, Trump’s second term introduced policies to enhance the regulatory environment:
"Strategic Bitcoin Reserve" (March 2025): An executive order directing the Treasury and Fed to jointly acquire Bitcoin, establishing a U.S. official Bitcoin reserve as part of strategic assets, aiming to legitimize Bitcoin, hedge dollar risks, and strengthen U.S. influence in global crypto markets.
Crypto Tech Upgrades: Promoting blockchain adoption within regulators, creating a "Crypto Trading Supervision Platform" for real-time monitoring and risk alerts, and fostering collaboration with crypto firms and research institutions to improve understanding and enable "precision regulation."
International Cooperation: Actively promoting global crypto regulation cooperation via G20, APEC, and other platforms, advocating U.S. principles of "technology neutrality" and "encouraging innovation," and forging agreements with the EU, Japan, and others for information sharing and joint enforcement against cross-border illegal activities.
A summary of five typical cases for quick reference:
| Case No. | Case Name | Government Period | Relevant Policies | Core Impact |
|---|---|---|---|---|
| 1 | Silvergate Bank Collapse | Biden (2021-2024) | Choke Point 2.0; banking restrictions | Cut off fiat liquidity; regional banks exit crypto |
| 2 | Binance $4.3B Settlement | Biden (2021-2024) | AML & securities enforcement | Record fine; enforcement severity |
| 3 | SEC Lawsuit against Coinbase | Biden (2021-2024) | Registration & oversight | Stock drop; SEC crypto enforcement model |
| 4 | FTX Founder Criminal Case | Biden (2021-2024) | Fraud & AML crackdown | Industry warning; enforcement deterrence |
| 5 | Trump Pardons for Crypto Figures | Trump (2025–present) | Executive order; policy reversal | Market confidence boost; policy shift |
- Policy Divergence Analysis: Deep Clash of Ideologies and Motivations
3.1 Regulatory Philosophy: Risk Control vs Innovation Priority
The core difference between Biden and Trump’s crypto policies lies in their underlying philosophies. Biden’s approach prioritizes "risk prevention," viewing crypto as a significant source of financial risk, emphasizing regulation to prevent AML, terrorism financing, and fraud, thus adopting a more "restrictive" stance with less focus on innovation.
Trump’s approach emphasizes "innovation and clear boundaries," considering crypto as a key driver of U.S. leadership in digital finance. Overregulation is seen as a threat to industry growth, so policies favor loosening restrictions, clarifying rules, and encouraging technological development, balancing innovation with risk management.
3.2 Underlying Motivations: Political and Economic Considerations
Policy differences also reflect political and economic interests. Biden’s regulation aligns with traditional financial institutions (big banks, insurers) fearing disruption, and aims to enhance public trust through risk mitigation. It also appeals to voters concerned about financial security.
Trump’s policies favor tech and crypto firms, and younger voters supportive of crypto, seeking to foster innovation, economic growth, and global influence. Promoting crypto development also aims to boost the digital economy and maintain dollar dominance, reinforcing U.S. economic hegemony.
- Industry Impact and Future Trends
4.1 Differential Impact on U.S. Crypto Industry
Biden’s tightening has constrained the industry: banking restrictions led to liquidity shortages, many small firms moved abroad, and high compliance costs plus enforcement actions dampened market confidence. Major collapses like FTX intensified fears, exposing industry fragility.
Trump’s loosening policies revived the sector: reduced compliance costs, reestablished banking relationships, clarified regulatory boundaries, attracted startups, and encouraged traditional financial institutions to re-engage. Market confidence surged, and crypto prices and derivatives markets expanded.
4.2 Future Regulatory Outlook
Based on current policies, three main trends are expected:
Further Rule Refinement: As laws like the STABLE and GENIUS Acts are implemented, regulations will become more detailed, addressing classification, cross-border transactions, and taxation, reducing uncertainty.
Balance of Innovation and Compliance: The "technology neutrality" principle will persist, with ongoing support for crypto innovation in payments, supply chain, and digital identity, while maintaining strict AML, CFT, and investor protections.
Global Leadership in Crypto Regulation: The U.S. will continue to promote international cooperation, aiming to set global standards, attract crypto firms, and maintain its leadership position in the evolving global crypto ecosystem.
- Conclusion
From Biden’s "tightening controls" to Trump’s "loosening and promoting innovation," U.S. crypto regulation has undergone a dramatic shift driven by ideological, political, and economic factors. Biden’s policies, exemplified by Choke Point 2.0 and legislative drafts, aimed to contain risks but limited innovation. Trump’s administration, through executive orders, key laws, and supportive policies, has sought to foster a more open environment, balancing growth and risk.
As the largest crypto market globally, U.S. regulatory trends will continue to influence the worldwide crypto landscape. With further refinement and clarification of rules, the industry is expected to move toward "compliance, standardization, and innovation," with the U.S. maintaining a central role in global crypto regulation and innovation. Crypto firms should closely monitor U.S. policy developments, proactively adapt to compliance requirements, and innovate within legal boundaries to achieve sustainable growth.
