The U.S. crypto industry has made significant regulatory
gains over the past year, but those gains may prove difficult to preserve
without legislation from Congress.
That's the warning coming from Miller Whitehouse-Levine, CEO
of the Solana Policy Institute. His concern is that while federal agencies can
deliver regulatory progress, those rules may be less durable than legislation
passed by Congress—and a future administration could potentially reverse or
modify them.
The Core Problem: Agencies Can't Offer Permanence
Whitehouse-Levine's warning comes as sweeping U.S. crypto
legislation remains stalled in Congress, leaving federal agencies to fill the
void. The industry-backed CLARITY Act, which aims to define whether crypto
tokens should be regulated as securities or commodities, remains stalled in
Congress, leaving its path forward uncertain.
That impasse has put the onus on the Trump administration's
crypto-friendly regulators, particularly the Securities and Exchange Commission
and the Commodity Futures Trading Commission. The SEC has been working on
proposed exemptions that could ease securities requirements for certain crypto
offerings, while the CFTC is moving ahead with discussions on additional
cryptocurrency regulation.
"The agencies ... seemingly are ready to act, given
that Congress has been unwilling or unable to do so," Whitehouse-Levine
told Reuters.
But here's the catch: regulations introduced by federal
agencies could face court challenges or be reversed by future administrations.
The shift in regulatory priorities between administrations shows how quickly
federal crypto policy can change.
And that's exactly what Whitehouse-Levine is worried about.
The "Gensler 2.0" Fear
Whitehouse-Levine's broader concern is that the industry's
recent regulatory progress remains vulnerable without durable legislation. That
concern was echoed by crypto executives who warned that a future administration
could create a "Gensler 2.0" scenario.
The concern reflects how quickly U.S. crypto policy can
change under a new administration. Under former President Joe Biden, SEC Chair
Gary Gensler sued dozens of crypto companies, including Coinbase, Binance, and
Ripple, arguing that many digital assets qualified as securities and should
have been registered with the agency. Gensler famously described the crypto
market as "rife with fraud, scams and abuse," comparing it to
"the Wild West."
Some executives even fear that a future administration could
install crypto hawks like Gensler once again.
Josh Riezman, chief legal and strategy officer at crypto
trading firm GSR, put it bluntly:
"But then the next administration, depending on how
that shakes out, we can be looking very much like a potentially Gensler 2.0
type scenario."
Progress That Could Be Undone
The industry has seen significant gains under the current
administration. SEC Chair Paul Atkins, appointed in April 2025, has moved away
from the enforcement-first approach of his predecessor. The SEC has stepped
back from several major enforcement cases involving crypto companies, including
Coinbase, Binance and Ripple. It has issued formal guidance on token
classification through a joint memorandum with the CFTC.
The GENIUS Act, which provides regulatory clarity for
stablecoins, became law in July 2025. But without broader market-structure
legislation, the industry's regulatory gains remain vulnerable to future policy
changes.
Whitehouse-Levine has repeatedly emphasized that these gains
are fragile. Without permanent legislation, regulatory policy can shift with
every new administration.
The Deeper Concern: Legal Ambiguity as a Weapon
Whitehouse-Levine's anxiety goes beyond who sits in the SEC
chair. The deeper problem, as he sees it, is that "crypto better than any
other industry unfortunately understands how legal ambiguities or
interpretations can be weaponized against an industry."
Even if the industry secures its biggest legislative wins,
the old legal frameworks—the Securities Act of 1933, the Securities Exchange
Act of 1934, and the Commodity Exchange Act of 1936—are still on the books. A
future administration hostile to crypto could simply reinterpret these laws in
ways that once again make it impossible for the industry to operate.
Whitehouse-Levine, who previously worked at the DeFi
Education Fund, has consistently argued for a clear regulatory distinction
between centralized exchanges and decentralized finance software. Under a
Gensler-like approach, however, this distinction would likely disappear,
subjecting DeFi projects to the same burdens as centralized exchanges.
The Political Reality
The path forward isn't straightforward. While many Democrats
support creating a regulatory framework for cryptocurrencies, they generally
favor tougher safeguards against money laundering, fraud, and conflicts of
interest than Republican lawmakers. Potential Democratic gains in the November
midterm elections could give lawmakers greater power to scrutinize SEC and CFTC
rulemaking efforts.
Meanwhile, traditional Wall Street firms that strongly
oppose some SEC and CFTC crypto policies could also complicate implementation.
The CME Group sued the CFTC in June over its decision to approve perpetual
crypto futures, while industry groups have urged the SEC to place tighter
limits on blockchain-based stock trading plans.
What Happens Next
For the crypto industry, the immediate question is whether
regulators can provide meaningful relief while Congress remains deadlocked. The
SEC and CFTC can move ahead with rules and exemptions, but those measures
remain more exposed to litigation and future policy changes than a statute
passed by Congress.
Reuters reported that the agencies are preparing to fill the
gap left by stalled legislation, making the next phase of U.S. crypto policy
increasingly dependent on regulators rather than lawmakers.
That does not mean the industry's recent progress is
meaningless. It means the durability of that progress remains uncertain. If
Congress eventually passes comprehensive market-structure legislation, it could
establish rules that are harder for a future administration to reverse.
The Bottom Line
The central issue facing U.S. crypto regulation is no longer
simply whether the industry will receive friendlier rules. It is whether those
rules will survive a change in political leadership.
Miller Whitehouse-Levine's warning highlights the weakness
of relying too heavily on administrative policy. The SEC and CFTC can provide
meaningful regulatory relief, but congressional legislation would give the
industry a more durable legal foundation. Reuters' latest reporting shows that
agencies are already moving to fill the gap created by stalled legislation.
For crypto companies, investors and developers, that
distinction matters. Regulatory momentum can change quickly. A permanent
statutory framework would make that change far less disruptive.
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