According to Coin Center, despite incoming Trump administration, there are still numerous ongoing cases that could pose a challenge for investors and developers.
The non-profit crypto advocacy group Coin Center has cautioned that, despite a Trump victory being a net positive for the crypto industry, the United States’ entrenched policies could still deter crypto innovators.
Coin Center Identifies threats to crypto users
Van Valkenburgh, the research director of Coin Center, identified three “grave threats” to the crypto users and developers in the United States as we approach 2025 in a blog post published on November 21, which examined the state of US crypto policy in the wake of the 2024 election.
The ongoing criminal proceedings involving the crypto mixer Tornado Cash and Bitcoin wallet service Samourai Wallet are among the three threats broadly referred to as “surveillance issues.” These threats include tax reporting and anti-money laundering (AML) policy.
Three serious threats to cryptocurrency
The crypto reporting requirements outlined in Section 6050I of the US tax code pose an initial significant threat. Currently, the IRS requires warrantless reporting for individuals who have received $10,000 in crypto.
Last August, Coin Center contended that these reporting obligations are unconstitutional.
The second and third main threats result from the sanctions imposed on Tornado Cash, which include the criminal charges for unlicensed money transmission brought against the mixing service and Samourai Wallet.
According to Coin Center, the charges filed against Roman Storm, the proprietor of Tornado Cash, could establish a concerning precedent for developers of non-custodial crypto services.
“President Trump’s generally pro-crypto stance and his likely selections for appointees at the SEC and Treasury suggest that controversial ongoing rulemakings may be frozen or abandoned at the agency level.”
On the other hand, Valkenburgh wrote that the new administration may not be inclined to reduce the severity of “overzealous” sanctions and AML policies.
“The [Department of Justice] 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,” Valkenburgh indicated.
“We remain optimistic that progress can be made in this regard if it becomes increasingly evident that draconian surveillance and control policies will persist in driving innovators away from the United States, inhibiting development, and denying ordinary Americans the benefits of these technologies, even with a more lenient SEC.”
Valkenburgh further stated that the current measures to prevent individuals from accessing crypto services are insufficient to prevent criminals and terrorists from utilizing the tools.
