Buying, holding and selling crypto is legal in the United States. The IRS taxes it as property, so you pay capital gains tax when you sell, swap or spend it, and income tax on rewards like staking. There is still no single federal law for crypto markets: the SEC, the CFTC and state regulators each cover part of it.
This guide explains who regulates crypto in the US, how it is taxed, what your exchange now reports to the IRS, and how to stay out of the scams that cost Americans the most money.
At a glance
| Topic | The short version |
|---|---|
| Regulators | SEC, CFTC, FinCEN and state regulators (New York: NYDFS BitLicense) |
| Check a platform | FinCEN registration and state licence (NMLS Consumer Access) |
| Tax on gains | Short-term at income tax rates; long-term at 0%, 15% or 20% |
| Tax on rewards | Ordinary income when received |
| What exchanges report | Form 1099-DA: proceeds from 2025, cost basis for coins bought from 2026 |
| Report a scam | ic3.gov and ReportFraud.ftc.gov |
Who regulates crypto in the US
Crypto in the US sits under several regulators at once:
- The SEC (Securities and Exchange Commission) covers crypto that counts as a security, such as tokens sold as an investment in a project.
- The CFTC (Commodity Futures Trading Commission) covers crypto commodities like Bitcoin, and crypto futures and other derivatives.
- FinCEN, part of the Treasury, requires exchanges to register as money services businesses and follow anti-money-laundering rules.
- State regulators license exchanges that hold or transfer your money. Most states require a money transmitter licence. New York has its own stricter licence, the BitLicense, run by the New York Department of Financial Services.
In March 2026, the SEC and CFTC published a joint interpretation that sorts tokens into five groups: digital commodities, digital collectibles, digital tools, stablecoins and digital securities. Only digital securities fall under securities law by default.
What happened to the CLARITY Act
Congress has tried to write one law for crypto markets. The House passed the CLARITY Act in July 2025, but in September 2026 the Senate fell short of the 60 votes needed to move it forward, 49 to 50. For now, regulators are filling the gap with their own rules and guidance, and state licences still cover most everyday buying and selling.
Stablecoins
The GENIUS Act, signed in July 2025, created the first federal rules for payment stablecoins: tokens designed to stay worth one US dollar. Issuers must hold reserves and follow federal or state oversight. Our stablecoin guide explains how they work and where they have failed before.
How crypto is taxed in the US
The IRS treats crypto as property, not currency. That has three consequences.
1. Selling, swapping and spending are taxable
You owe tax on any gain when you:
- sell crypto for dollars
- swap one coin for another, such as Bitcoin for Ether
- spend crypto on goods or services
Buying crypto with dollars and holding it is not taxable. Moving coins between your own wallets is not taxable either, but keep records so you can show it was your own transfer.
2. How long you held it sets the rate
| Held for | Type of gain | Federal rate |
|---|---|---|
| 1 year or less | Short-term | Your ordinary income tax rate |
| More than 1 year | Long-term | 0%, 15% or 20%, depending on your income |
Higher earners may also owe the 3.8% net investment income tax, and most states add their own income tax. Losses can offset gains, and up to $3,000 a year of net capital losses can offset ordinary income.
3. Rewards are income
Staking rewards, mining rewards and crypto you are paid for work count as ordinary income at their dollar value when you receive them. When you later sell those coins, any further rise in value is a capital gain.
How to report it
- Answer the digital asset question near the top of Form 1040. Everyone filing must answer it, even if the answer is no.
- List each sale or swap on Form 8949, with the totals on Schedule D.
- Report rewards as income on Schedule 1, or Schedule C if crypto is your business.
For a side-by-side look at the US and other countries, see how crypto is taxed around the world.
What your exchange now tells the IRS: Form 1099-DA
US crypto brokers, including the big exchanges, now issue a new tax form, Form 1099-DA. It goes to both you and the IRS.
- Sales from 2025 onward: the form shows your gross proceeds, meaning how much each sale brought in.
- Coins bought from 1 January 2026: brokers also report your cost basis, meaning what you paid, as long as the coins stayed in the same account until you sold.
Coins you bought before 2026, or moved in from another wallet, usually have no cost basis on the form. You still have to report the correct basis yourself, so keep your own records of what you paid. If you leave the basis blank, the IRS may treat the whole sale price as profit.
How to buy crypto safely in the US
- Use a regulated platform. Check that the exchange is registered with FinCEN and licensed in your state. The NMLS Consumer Access website lists state money transmitter licences. In New York, check the NYDFS list of licensed virtual currency businesses.
- Consider a spot ETF if you only want price exposure. US spot Bitcoin ETFs have traded since January 2024 and can be bought in a normal brokerage or retirement account. You don't hold the coins yourself, but you also don't manage keys.
- Turn on strong security: an authenticator app or security key rather than text-message codes.
- Move long-term holdings to a wallet you control. Exchanges can be hacked or fail. Our wallet guide explains how.
- Keep records from day one: dates, amounts and dollar values for every buy, sale and transfer.
Our guide to choosing an exchange covers fees, security and what to check before you deposit.
Scams to watch for, and where to report them
Crypto investment fraud is one of the costliest crimes reported to the FBI. The patterns repeat:
- "Pig butchering": a friendly stranger, often met through a wrong-number text or dating app, steers you to a fake trading platform.
- Crypto ATM scams: someone posing as a bank, government agency or tech support tells you to withdraw cash and feed it into a crypto ATM to "protect" it.
- Fake support: anyone who asks for your recovery phrase is stealing from you.
If you are targeted:
- Report to the FBI's Internet Crime Complaint Center at ic3.gov.
- Report to the FTC at ReportFraud.ftc.gov.
- Tell the exchange you sent money through, straight away.
Our scam guide explains the red flags in more detail.
FAQ
Do I pay tax if I just buy and hold crypto?
No. Buying crypto with dollars and holding it is not a taxable event. Tax is due when you sell, swap or spend it, or when you receive crypto as income.
Is swapping one crypto for another taxable in the US?
Yes. A swap counts as selling the first coin at its dollar value, so any gain since you bought it is taxable.
What if my Form 1099-DA has no cost basis?
That is normal for coins bought before 2026 or moved in from another wallet. You must still report what you paid, using your own records or a crypto tax tool.
Is crypto legal in every US state?
Owning crypto is legal everywhere in the US, but exchanges need a licence in each state they serve, so some platforms or coins aren't available in every state.
Sources: IRS, Digital assets; IRS, Instructions for Form 1099-DA; Orrick, The CLARITY Act stalls in the Senate (October 2026); FBI IC3.
This is not financial advice. Crypto is volatile and you can lose money. Do your own research.