Business

US crypto regulations tighten amid global ripple effects and startup fears

Tuesday, 28 October 2025 5:05AM UTC

The US government's new digital assets strategy aims to clarify rules and bolster innovation, but rising compliance costs and international regulatory pressures pose significant challenges for emerging crypto firms.

The evolving regulatory landscape for cryptocurrencies in the United States is poised to bring significant changes, especially with the White House's announcement of an impending digital assets strategy. Industry insiders view this as a pivotal move that could both foster innovation and present formidable challenges, particularly for fintech startups navigating the complexities of compliance, both domestically and abroad.

The White House is advancing a comprehensive regulatory framework aimed at clarifying the often ambiguous rules surrounding digital assets like Bitcoin. With the market structure bill expected to be signed into law by the end of the year, this legislation intends to simplify oversight on crucial issues such as trading and custody. White House Bitcoin Advisor Patrick Witt and other key figures are working to ensure the regulation supports all stakeholders, from major incumbents to smaller nimble startups. Recent developments include President Donald J. Trump’s Executive Order titled "Strengthening American Leadership in Digital Financial Technology," signed in January 2025. This directive established the Presidential Working Group on Digital Asset Markets to develop federal guidelines for digital assets including stablecoins, and to consider the creation of a strategic national digital assets stockpile. Additionally, it prohibits federal agencies from promoting or issuing central bank digital currencies (CBDCs), marking a distinct policy stance against government-issued digital currency initiatives.

From a startup perspective, regulatory clarity could offer tangible benefits. Clear and consistent rules may reduce the often paralyzing uncertainty that startups face, enabling them to focus resources on innovation rather than legal ambiguity. Moreover, the framework could encourage greater involvement from traditional financial institutions—banks and investment funds—that have so far approached crypto cautiously due to regulatory risks. This institutional interest could potentially inject fresh capital into the sector, accelerating fintech innovation. Clear regulations might also level the playing field by weeding out bad actors and enhancing consumer protections, thereby fostering greater user trust and adoption. Furthermore, establishing a robust regulatory environment may help the U.S. maintain a competitive edge globally as other regions, such as Asia, monitor these developments and tailor their own regulatory regimes accordingly.

However, the regulatory tightening does not come without its drawbacks, particularly for smaller fintech startups. Compliance costs are expected to rise sharply, with requirements for licensing, anti-money laundering (AML) measures, and other regulatory burdens that may be prohibitively expensive for emerging businesses. Even with clearer rules, differing interpretations among regulators could perpetuate uncertainty and operational complexity. Additionally, the inherent volatility of cryptocurrency markets continues to pose risks to cash flow for startups accepting digital assets. There is also the ongoing challenge of safeguarding crypto holdings against hacks and theft, which necessitates significant investment in security infrastructure. These factors combined risk stifling innovation or driving startups to relocate to jurisdictions with more lenient regulatory environments.

The impact of U.S. regulatory shifts is also being watched closely on the international stage. In Asia, where many fintech firms are eager to penetrate the U.S. market, a standardized U.S. framework might simplify cross-border compliance despite adding an extra layer of regulatory hurdles. Conversely, in Europe, the forthcoming Markets in Crypto-Assets (MiCA) regulation paints a more challenging picture. MiCA aims to bring clarity to the European crypto market but at considerable cost. Industry data indicates that one-off compliance expenses for crypto service providers range from $3.2 million to $19 million, with ongoing annual costs potentially reaching $28 million. This has already led to significant market consequences: in 2024, nearly a third of crypto service providers penalized under MiCA froze their expansion plans, while over a quarter scaled back on certain crypto offerings to mitigate risks. Some firms have even exited the EU market entirely, citing legal uncertainty and high costs. Wallet providers, in particular, face steep compliance challenges including capital reserve requirements and legal ambiguity around decentralized models, with nearly a third delaying product launches.

In sum, the U.S. regulatory initiatives aim to establish a clear, comprehensive framework that balances innovation with consumer protection and market integrity. Yet, the costs and complexities of compliance could disproportionately impact smaller startups, potentially curbing the very innovation these rules seek to encourage. Meanwhile, the ripple effects of U.S. policy will be felt globally, intersecting with contrasting regulatory approaches such as Europe’s costly MiCA regime. How startups and established firms adapt to these evolving dynamics will likely shape the next phase of the digital financial technology revolution.

📌 Reference Map:

Paragraph 1 – ^[1] (OneSafe Blog), ^[2] (White House), ^[3] (White House)
Paragraph 2 – ^[1] (OneSafe Blog), ^[2] (White House), ^[3] (White House), ^[4] (White House)
Paragraph 3 – ^[1] (OneSafe Blog)
Paragraph 4 – ^[1] (OneSafe Blog), ^[5] (CoinDesk), ^[6] (CoinLaw), ^[7] (CoinLaw)

Source: Noah Wire Services

More on this

https://www.onesafe.io/blog/navigating-new-crypto-regulations-opportunities-challenges-startups - Please view link - unable to able to access data
https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/ - On January 23, 2025, President Donald J. Trump signed an Executive Order titled 'Strengthening American Leadership in Digital Financial Technology.' This order aims to promote the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the U.S. economy. It establishes the Presidential Working Group on Digital Asset Markets, tasked with developing a federal regulatory framework for digital assets, including stablecoins, and evaluating the creation of a strategic national digital assets stockpile. The order also prohibits agencies from establishing, issuing, or promoting central bank digital currencies (CBDCs).
https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-executive-order-to-establish-united-states-leadership-in-digital-financial-technology/ - The White House released a fact sheet detailing President Trump's Executive Order to establish U.S. leadership in digital financial technology. The order directs the Presidential Working Group on Digital Asset Markets to develop a federal regulatory framework for digital assets, including stablecoins, and to evaluate the creation of a strategic national digital assets stockpile. It also prohibits agencies from establishing, issuing, or promoting central bank digital currencies (CBDCs). The order revokes previous administration's actions that suppressed innovation and undermined U.S. economic liberty in digital finance.
https://www.whitehouse.gov/fact-sheets/2025/07/fact-sheet-the-presidents-working-group-on-digital-asset-markets-releases-recommendations-to-strengthen-american-leadership-in-digital-financial-technology/ - On July 30, 2025, the President’s Working Group on Digital Asset Markets released a report providing recommendations to strengthen American leadership in digital financial technology. The report outlines a comprehensive federal statement of digital-asset policy, including over 100 regulatory and legislative actions on issues such as market structure, banking, payments, countering illicit finance, and taxation. It emphasizes the need for a clear policy framework to support the responsible growth and use of digital assets and blockchain technology across all sectors of the U.S. economy.
https://www.coindesk.com/policy/2021/11/02/unpacking-europes-looming-mica-crypto-regulation - Europe's Markets in Crypto-Assets (MiCA) regulation is set to introduce comprehensive rules for the crypto industry. While it aims to provide regulatory clarity, compliance costs are expected to be significant. An impact assessment by the EU Commission estimated that one-off compliance costs for crypto-asset service providers could range from $3.2 million to $19 million, with ongoing costs up to $28 million. These expenses may deter some businesses from entering the European market or prompt existing firms to reconsider their operations.
https://coinlaw.io/penalties-for-non-compliance-with-mica-regulations-statistics/ - Statistics from 2024 reveal that 32% of crypto-asset service providers (CASPs) penalized under MiCA regulations halted their expansion into new EU markets due to regulatory uncertainty. Additionally, 26% discontinued specific crypto-asset offerings, including stablecoins and derivatives, to mitigate compliance risks. The average cost of compliance upgrades following MiCA penalties was €1.7 million, with larger firms spending upwards of €5 million. These challenges have led 29 CASPs to exit the EU market entirely in 2024.
https://coinlaw.io/mica-compliance-for-wallet-providers-statistics/ - Wallet providers face significant challenges in meeting MiCA compliance standards. Regulatory compliance costs have surged by 30%, with medium-sized wallet providers spending an average of €500,000 annually to meet MiCA standards. Legal uncertainty is a major concern, particularly regarding decentralized and non-custodial wallet models. MiCA mandates capital reserves of €350,000 for custodial wallet providers, making it difficult for smaller firms to maintain financial sustainability. These factors have led 30% of crypto startups in the EU to delay product launches due to ongoing regulatory approvals and compliance challenges.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative references recent developments, including President Trump's Executive Order from January 2025 and the establishment of the Presidential Working Group on Digital Asset Markets. The earliest known publication date of similar content is January 23, 2025, aligning with the Executive Order's release. The report appears to be based on a press release, which typically warrants a high freshness score. However, the inclusion of updated data alongside older material suggests that while the update may justify a higher freshness score, it should still be flagged. Additionally, the narrative includes references to external sources, such as the White House website and CoinLaw, indicating that some content may have been republished across various platforms. This raises concerns about potential recycling of content. Notably, the narrative mentions "OneSafe Blog" as a source, which is a single-outlet platform, potentially indicating a lack of broader coverage. This could be flagged as an uncertainty regarding the source's reliability.

Quotes check

Score: 9

Notes: The narrative includes direct quotes from President Trump's Executive Order and other official documents. These quotes are consistent with the original sources, indicating accurate reporting. No discrepancies or variations in wording were found, suggesting that the quotes are directly sourced from the referenced materials.

Source reliability

Score: 6

Notes: The narrative originates from the "OneSafe Blog," which is a single-outlet platform. This raises concerns about the source's reliability, as it may lack the editorial oversight and credibility associated with more established media outlets. Additionally, the report includes references to external sources, such as the White House website and CoinLaw, which are reputable. However, the reliance on a single outlet for the primary narrative content suggests potential issues with source reliability.

Plausability check

Score: 7

Notes: The narrative discusses the impact of U.S. regulatory shifts on the cryptocurrency market, referencing the White House's Executive Order and the Markets in Crypto-Assets (MiCA) regulation in Europe. The claims about compliance costs for crypto service providers under MiCA are supported by data from CoinLaw, indicating that the narrative is grounded in factual information. However, the lack of supporting detail from other reputable outlets and the reliance on a single source for the primary narrative content raise concerns about the plausibility of the report. Additionally, the tone and language used in the narrative are consistent with typical corporate or official language, suggesting that the content is not synthetic.

Overall assessment

Verdict (FAIL, OPEN, PASS): OPEN

Confidence (LOW, MEDIUM, HIGH): MEDIUM

Summary: The narrative presents recent developments in U.S. cryptocurrency regulations, referencing official sources such as the White House's Executive Order and the MiCA regulation in Europe. While the quotes are accurate and the content is grounded in factual information, the reliance on a single outlet for the primary narrative content raises concerns about source reliability. Additionally, the recycling of content and the inclusion of updated data alongside older material suggest potential issues with freshness. Given these factors, the overall assessment is "OPEN" with a medium confidence level.

Cryptocurrency
Regulation
Fintech startups