Crypto advocacy group Coin Center has hinted that crypto innovation could still be threatened despite an incoming crypto-friendly Securities and Exchange Commission (SEC). According to the non-profit group, while Trump’s emergence as president might be a positive for the crypto sector, several ongoing cases could deter investors and developers.
In its recent blog post, Coin Center looked into the policies of the United States concerning the crypto market. The group’s research Director Van Valkenburgh highlighted three threats to the crypto industry in the United States. Valkenburgh noted that if these threats are not looked into, it could prove costly for users and developers in the industry.
Coin Center highlights threats to the crypto industry
Van Valkenburgh explained that the threats can be classified generally into surveillance issues, which falls under tax reports and anti-money laundering (AML) policy. He highlighted the cases involving crypto mixer Tornado Cash and Bitcoin wallet Samourai wallet as other examples.
Coin Center’s Analysis of the Crypto Policy Landscape Following the Elections https://t.co/A5fJ7rAP9Y
— Coin Center (@coincenter) November 21, 2024
Coin Center revealed that the first threat is the needless reporting of incomes of $10,000 from crypto to the Internal Revenue Service (IRS). The report noted that although it is compulsory under section 6050I of the United States tax code, it is completely warrantless. This is not the first time the group has challenged the reporting requirements, arguing in August 2023 that it is unconstitutional.
According to Coin Center, the second and third threats are due to the sanctions on Tornado Cash and Samourai Wallet. It mentioned that both platforms were slammed with sanctions, including criminal charges for carrying out an illegal money transmitting business. Coin Center stressed that the charges against Tornado Cash founder Roman Storm could deter developers of non-custodial services.
Valkenburgh discusses the way out
Coin Center noted that these controversial cases may be dropped as a result of the pro-crypto stance of the incoming administration. This may happen generally because of the appointments the president-elect will make to head the SEC and the Treasury. However, Valkenburgh has mentioned that it may not be the case, as the new administration may not be interested in reducing needless policies.
Valkenburgh clarified that even if there is a change in the Department of Justice (DOJ) under Trump, things may remain the same. “The DOJ may change under a Trump administration, but it rightly guards its political independence and may therefore be unlikely to abandon these prosecutions because of a change in administration,” he said.
Also, Valkenburgh noted if these laws aren’t removed, the policies and other surveillance laws will continue to push investors away, stall the industry’s innovation, and deny Americans the opportunity to adopt the best technologies. However, the Coin Center research director hopes the crypto market will experience much-needed progress even if these laws aren’t completely scrapped.
Valkenburgh also talked about the measures used to prevent people from using the services, noting that it has not deterred criminals from carrying out their acts. In a nutshell, people are optimistic about the incoming administration and their pro-crypto promises. While some good policies may be quickly achieved, there is a belief that it could take some time before the not-so-good ones are completely removed.
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