A Comprehensive Analysis of U.S. Cryptocurrency Regulations

A Cryptocurrency, also known as "Crypto", is a digital currency designed to work as a medium of exchange. Bitcoin is a peer-to-peer version of electronic cash allowing payments to be conducted electronically without the need for a financial institution. Over the years, Bitcoin's popularity has garnered a global acceptance of other cryptocurrencies being traded as financial assets. Crypto exchanges are legal in the United States and fall under the regulatory scope of the Bank Secrecy Act (BSA). These Cryptocurrencies are being regulated by various agencies such as the Securities and Exchange Commission (SEC), The Financial Crimes Enforcement Network (FINCEN), The Commodity Futures Trading Commission (CFTC), and a plethora of other agencies. Over the years, investors and lawmakers have called for the creation of a comprehensive regulatory framework for cryptocurrencies mimicking that of regular securities to combat cybercrimes, money laundering, illicit financial flows, etc. Cryptocurrency regulations will enable a viable path for the lawful use of cryptocurrencies as a tool for financial inclusion. While such regulations are being discussed, this paper seeks to analyze the current regulatory framework of cryptocurrencies utilizing a mixed methods research approach. This paper will take a closer look at the current policies and regulations in place in hopes of providing a policy recommendation for policymakers, with the aim of improving the current regulatory practices of cryptocurrency exchange.