CoinDesk: Bitcoin, Ethereum, Crypto News and Price Data
Feb 26, 2025

State Regulators Prepare for Increased Crypto Enforcement Amid Federal Changes

1 min

The appointment of a U.S. crypto czar and new crypto legislation signal a shift from "regulation by enforcement" in the U.S., although state regulators are expected to increase their enforcement actions.

  • SEC and CFTC now have pro-crypto chairs; however, state regulators remain aggressive.
  • Trump appointed David Sacks as the first “Crypto Czar” and established a working group on digital assets.
  • New York Department of Financial Services (NYDFS) recently secured a $37 million settlement from a crypto lending platform.
  • California enacted the Digital Financial Assets Law to regulate digital assets.
  • Illinois is considering the Digital Assets and Consumer Protection Act for regulating digital asset businesses.

Federal legislation may limit state regulators' enforcement actions while allowing state Attorneys General to pursue fraud lawsuits against crypto firms. For instance, New York AG filed a lawsuit against a trading platform that resulted in a $22 million settlement.

A national regulatory framework will provide more certainty for the crypto industry, but enforcement actions are likely to continue at the state level.