In the absence of federal crypto regulations in the US, lobbyists and executives are helping to draft and pass favorable bills at state level
In the absence of federal regulations, crypto lobbyists and executives are going state by state to get favorable rules enacted. Many lawmakers have been willing partners.
Context & Ripple Effects
This story sits mid-arc in the industry's two-track push for legal footing in the US. After the tax amendment to the federal infrastructure bill triggered over a dozen new lobbyist-hiring disclosures and crypto donations became a key cash source for some lawmakers ahead of a federal rulemaking push (crypto firms flooding DC with money), the industry turned to the states — drafting favorable bills itself rather than waiting for Congress.
First-order effects
- State lawmakers who partner with crypto lobbyists and executives get model legislation ready-made, passing favorable rules that give crypto firms operating clarity the absent federal framework does not provide.
Second-order effects
- A state-by-state rulebook fragments the US market into a patchwork of differing requirements, raising compliance costs for multi-state operators and pushing firms to concentrate where rules are friendliest.
Third-order effects
- If the pattern holds, the industry that failed to shape federal policy writes its own baseline instead — deepening the legitimacy gap between what regulators choke off and what legislatures welcome, and setting up state-federal conflict once Congress finally acts.
The trend: US crypto regulation is being written bottom-up by the industry itself, with state legislatures as the venue while federal agencies and Congress stall.