Crypto vs. Regulators: A Dahl-Drop Tale 🧃⚖️

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The Great Legal Labyrinth is a whimsical chronicle of crypto chaos, brought to you by Kelman Law – Guardians of Digital Gold.

Is Crypto a Security? (Part V)

The opinion editorial below was written by Alex Forehand and Michael Handelsman for Kelman.Law.

In 2025, the U.S. regulatory realm for digital assets is a tangled web of bureaucratic wiggles, policy pirouettes, and administrative mood swings. Courts have sprinkled a few crumbs of clarity, but the federal framework remains a jigsaw puzzle missing half its pieces. This Part surveys the key players-those bureaucratic gnomes in Washington-and their current antics as the year draws to a close.

SEC Enforcement in 2025

The SEC, a bumbling giant with a penchant for red tape, still looms large. Though less aggressive than its previous enforcement years, it continues to pounce on unregistered exchanges, staking services, and token sales tied to fundraising schemes. Imagine a giant octopus flailing its tentacles at anything that smells of “investment contract.”

But 2025 brought whispers of change. Senior leaders now sport pro-crypto speeches like fashion accessories, and the SEC conjured a Crypto Task Force to pivot from enforcement to regulation. Oh, the drama! And just when you thought they’d forget, they removed digital assets from their 2026 Examination Priorities, as if the sector were suddenly less risky than a toddler with a chocolate fountain.

This shift hints at a growing realization (or perhaps a caffeine-induced epiphany) that enforcement without laws is like baking a cake without flour. Still, the SEC’s new tone is a teetering tower of cards-administration changes could topple it all.

CFTC v. SEC Jurisdiction

Dual jurisdiction? Oh, how delightful! The CFTC, a grumpy crocodile, insists most tokens are commodities, while the SEC, a sly snake, claims they’re investment contracts. Picture two grumpy neighbors arguing over a garden fence, but with legal jargon and more coffee.

This overlap creates a regulatory tango. Market participants now juggle two federal regimes, even when the rules don’t quite align. Here’s where the fun begins:

  • DeFi derivatives, where automated protocols moonwalk swaps;
  • Perpetual futures markets, which fall squarely under CFTC’s watch but might involve SEC-regulated tokens;
  • Staking or validator services, tangled in both SEC and CFTC webs.

Chaos? You betcha. But isn’t that just another Tuesday in crypto-land?

Pending Federal Legislation

Congress, ever the slowpoke, debates digital-asset bills like they’re solving a Rubik’s cube in a blizzard. The CLARITY Act and its cousins aim to:

  1. Define when a token escapes SEC jurisdiction by meeting decentralization thresholds (as if decentralization were a game of hide-and-seek).
  2. Create a federal registration regime for “digital commodities” issuers, letting them play by new rules.
  3. Clarify exchange oversight, so platforms know whether they’re CFTC’s or SEC’s favorite child.

Though bipartisan interest is rising, no legislation has yet escaped the legislative labyrinth. States, meanwhile, fill the gaps with their own rules, creating a patchwork quilt of compliance nightmares. Welcome to the Wild West of regulations!

Conclusion

By late 2025, U.S. crypto regulation is a circus of contradictions. The SEC’s tone has softened, the CFTC clings to its commodity crown, and Congress tiptoes toward clarity. But until laws are written, the industry dances to a fickle soundtrack of case law and agency whims.

For builders, investors, and anyone with a stake in this crypto carnival, compliance is a game of whack-a-mole. Stay sharp, or risk being squashed by the next regulatory surprise!

Need help navigating this whimsical wilderness? Our team is here to guide you through the legal maze. Schedule a consultation and avoid becoming the next regulatory punchline. 🎩✨

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2025-12-21 11:00