Blockchain Association Appeals for Regulatory Reforms
On November 22, 2024, the Blockchain Association, a prominent trade organization representing over 100 cryptocurrency entities, made a significant public appeal to President Trump and the newly elected Congress. The association is advocating for essential regulatory reforms aimed at fostering a more supportive environment for the cryptocurrency sector, which has faced numerous challenges over the years. With a shift in leadership, the association hopes for a more amicable regulatory atmosphere.
Five-Point Plan for Restructuring Oversight
In its communication, the Blockchain Association presented a comprehensive five-point plan designed to overhaul federal oversight of the cryptocurrency industry. This plan is intended to encourage innovation and facilitate growth within the sector. The association emphasizes the necessity for the new administration to consider key priorities that impact the crypto industry within the first 100 days of their tenure.
Challenges Faced by Crypto Innovators
The letter highlighted that American crypto innovators have long been subject to unfavorable regulatory conditions, with some being driven overseas due to these challenges. The association remarked, “For years, American crypto innovators have been targeted and, in some cases, driven offshore by a hostile regulatory regime.” It articulated hope for the incoming administration to reconsider and revise these practices.
The Issue of ‘Debanking’ Crypto Companies
Another critical issue raised by the Blockchain Association was the “debanking” of crypto companies, where many have encountered significant barriers to accessing traditional banking services. This lack of access has complicated essential operational tasks, such as the payment of employees and taxes. The association is urging for an end to this practice to promote smoother business operations in the cryptocurrency sector.
Reforms at the SEC and Treasury Department
Leadership changes at the Securities and Exchange Commission (SEC) and the Treasury Department are considered vital by the association. They criticized the SEC’s enforcement-driven approach under its current leadership, which they claim has hindered innovation within the industry. The proposal includes revising the SEC’s stringent accounting guidelines and advocating for improvements in tax policies at the Treasury and IRS to prevent the outflow of blockchain businesses to more favorable regulatory environments.
Formation of a Crypto Advisory Council
The Blockchain Association also proposed the establishment of a crypto advisory council. This council would serve as a crucial link between the government and the cryptocurrency industry, facilitating collaboration with Congress and regulatory agencies to craft policies that harmonize regulatory oversight with technological advancement.
Looking to the Trump Administration for Hope
As the crypto industry anticipates the incoming administration, there is a growing sense of hope for regulatory reform under President-elect Donald Trump. The association revealed that the SEC has generated nearly half a billion dollars in legal expenses tied to digital asset litigation, with its members spending approximately $426 million on defensive legal actions from 2021 to 2023. This situation underscores the pressing need for change as they look to the Trump administration for guidance.
Potential Impacts of Key Financial Appointments
Trump’s selections for critical financial positions, including the Treasury Secretary, are poised to significantly influence the trajectory of regulatory reform. Moreover, reports indicate that former Federal Reserve Board member Kevin Warsh is a possible candidate for a Treasury role, which could also place him in line to succeed Federal Reserve Chair Jerome Powell in 2026. While there are discussions regarding the establishment of a White House position focused on cryptocurrency, the timeline for these reforms remains uncertain.