Crypto policy was a significant topic in the recent election, raising questions about how supportive the new administration and Congress will be. According to Coin Center, there may be improvements in securities and banking regulation, potentially leading to clearer rules for centralized markets and stablecoin issuers.
However, uncertainty remains in areas like anti-money laundering, tax-reporting, and sanctions. Coin Center is committed to defending developers' rights working on self-custody and privacy software, as well as ordinary Americans using these tools.
Coin Center identifies two main policy categories for crypto: surveillance issues (such as tax-reporting and sanctions) and investor protection issues (including SEC and CFTC regulations). Each area has different rationales and political motivations.
The organization advocates for balanced policies that protect decentralized infrastructure developers. Overzealous regulations could threaten these developers more than those in centralized businesses. Coin Center focuses on First Amendment rights related to code publication and Fourth Amendment issues regarding surveillance obligations.
In recent years, threats have emerged from regulatory bodies like the SEC targeting individual developers through rulemaking and enforcement actions against wallet providers such as Consensys’ Metamask and Coinbase Wallet. Surveillance concerns include 6050I reporting obligations, Tornado Cash sanctions, broker reporting obligations, and prosecutions for non-custodial developers. Legislation imposing unjustifiable surveillance obligations has also been contested by Coin Center.
Three primary threats remain: 6050I litigation over IRS reporting requirements deemed unconstitutional; Tornado Cash sanctions litigation challenging Treasury's authority; and unlicensed money transmission prosecutions of non-custodial software tool developers.
There is optimism regarding potential benefits for US-based centralized businesses under the new administration's pro-crypto stance. At the agency level, controversial rulemakings might be frozen or abandoned due to likely appointees at the SEC and Treasury.
Less certain is whether overzealous sanctions policies will change. However, progress may occur if it's clear that harsh policies drive innovators away from the US without preventing criminal activities effectively.
Congress may play a larger role in addressing surveillance issues. Members have criticized 6050I implementation, Tornado Cash sanctions, and unlicensed money transmission prosecutions. The Blockchain Regulatory Certainty Act offers a legislative solution to some of these challenges.
Coin Center looks forward to engaging with the new administration while emphasizing that being "pro-crypto" involves upholding American values like privacy and free speech even amid national security concerns. They aim to establish precedents protecting these technologies long-term.
