The appointment of a U.S. crypto czar and the announcement of comprehensive crypto legislation suggest that the era of "regulation by enforcement" in the U.S. may be coming to an end. However, while federal regulators like the SEC and CFTC now have crypto-friendly chairmen, state regulators and Attorneys General are expected to take a more aggressive enforcement role. State regulators like the New York Department of Financial Services (NYDFS) have already shown their aggressiveness in enforcing regulation against the crypto industry. Other states, such as California and Illinois, are also enacting their own regulations. Although new federal legislation might limit the ability of state regulators, state Attorneys General can still file lawsuits alleging fraud. While a national regulatory framework and pro-crypto regulators in Washington provide more certainty, aggressive lawsuits and regulator activity are likely to continue.



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