- John Deaton outlines five priorities to shape upcoming U.S. crypto regulations.
- Stablecoin laws and asset classification gain traction in Congress ahead of midterm elections.
- SEC and CFTC shift toward collaboration as crypto oversight reforms gather momentum.
The ongoing effort to define crypto regulation in the United States is gaining traction, with legal experts and lawmakers weighing in on the next phase of legislative action. One of the most vocal participants, attorney John Deaton, has released a detailed five-point list urging Congress to implement concrete regulatory measures. His proposals come as federal and state institutions debate who should lead oversight and how to balance innovation with compliance.
According to him, Deaton’s recommendations highlight five key areas that Congress must consider. His first call is for legislation on stablecoins. He points out that better-defined rules might enhance demand in the US Treasury and contribute to a better flow of cross-border operations. Stablecoin regulation is already being considered under the GENIUS Act, which envisioned the FR supervising large issuers while state-chartered bodies supervising smaller ones.
Deaton also argues that digital assets need to be classified. He demands a legal definition to classify tokens as securities or commodities. This would determine whether oversight would come under the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Regulation will likely be chaotic without clear legislation, with enforcement agencies duplicating their efforts.
Exchange Conduct and Tax Policy Under Review
Deaton’s third recommendation concerns the regulation of crypto exchanges. He recommends that for any exchange to be active, it should keep financial reserves fully transparent to the public through blockchains. He also points out the problem of customers’ assets commingling with the company’s, which is a systematic risk.
The fourth priority area is tax policy. While explaining his ideas about the future of taxation, Deaton calls for exemptions on capital gains taxes when the value is low and a policy allowing the payment of federal taxes using cryptocurrencies without being deemed a ‘sale’. These measures, he says, would help minimize the challenges that are likely to be faced while using digital assets for ordinary purchases.
Finally, Deaton calls on lawmakers to reconsider the Accredited Investor Rule, which restricts access to early-stage investments. He argues that the limitations exclude many individuals from participating in digital asset growth opportunities. He also encourages timely legislative action before the 2026 midterm elections to avoid political delays.
Momentum Builds Behind Stablecoin Legislation
The ongoing analysis shows that some of Deaton’s recommendations may align with contemporary legislation. Legislation on stablecoin could be approved as early as the second quarter of 2025. The market capitalization of stablecoins is now over $234 billion, and these coins’ issuance increases the pressure on Congress to act rapidly to regulate them. President Trump has reportedly favored some procedures related to stablecoin regulation, which has further intensified the issue.
The SEC and CFTC have different policies on crypto regulation, with the SEC being more rigid than the CFTC. Nevertheless, the latest figures may suggest a change in this trend. Both agencies have pledged to coordinate better, and other shifts under Paul Atkins have hinted at a deeper restructuring of the regulatory process.
Laws like FIT21 tend to centralize control to the CFTC, especially regarding self-regulating decentralized financial instruments. This approach is significantly different from the SEC’s previous enforcement-centric structure.
While legislators and supervisors adapt to changes in market conditions and organizational demand, the effects of Deaton’s proposed approach are under consideration. Whether this five-point list will become the focal point of the new legislation depends on what happens with the current wave of regulation refresh.
