The Blockchain Association, a prominent nonprofit advocating for the crypto and blockchain sectors in the United States, has made a significant move by articulating its priorities in a letter to President-elect Donald Trump and Congress. With the prospective transition of power, the Association identifies five critical areas it believes must be addressed within the first 100 days of the new administration. This proactive stance reflects a broader momentum within the cryptocurrency community, which is increasingly vocal about its regulatory challenges and aspirations.
While many industry stakeholders have clamored for the ousting of Gary Gensler, the current chairman of the U.S. Securities and Exchange Commission (SEC), Blockchain Association CEO Kristin Smith argues that simply replacing Gensler is inadequate. She advocates for a more comprehensive overhaul, suggesting that leadership changes must also extend to the Internal Revenue Service (IRS) and the Treasury Department. This positions the problem as systemic rather than merely personal—a recognition that effective regulation requires a foundational change in the approach to digital asset governance.
Trump’s limited authority over the SEC complicates the situation, as he cannot directly remove Gensler. However, Gensler’s recent announcement regarding his impending departure, set to coincide with Trump’s inauguration on January 20, 2025, creates an opportunity for new leadership to emerge within the SEC and potentially align its regulatory posture with the evolving dynamics of the crypto market.
In their correspondence, the Blockchain Association underscores the inconsistencies in how digital assets are taxed in the U.S. Currently, the IRS mandates that brokers must report gross proceeds, gains, and losses involving cryptocurrencies, stablecoins, and NFTs, as per the new ‘Broker rule’. Smith argues that this regulation could inadvertently push companies to seek unfriendly regulatory environments abroad. This not only undermines the nascent U.S. crypto sector but also hampers innovation crucial for economic growth.
Moreover, the letter critiques the SAB 121 accounting guideline, which requires public companies to disclose crypto assets on their balance sheets. Smith characterizes this requirement as “punitive” and “anti-crypto,” highlighting the need for more accommodating financial frameworks that prioritize growth and integration into traditional financial systems.
Facilitating Innovation and Inclusivity
The call for a “fit-for-purpose” regulatory framework reflects a critical balancing act: safeguarding consumer interests while fostering innovation in the blockchain space. Smith challenges the prevailing narrative that equates regulation with restriction, urging the establishment of rules that welcome software developers and respect the privacy rights of U.S. citizens. She also emphasizes the significant barriers crypto firms face in accessing traditional banking services, advocating for immediate reforms that would allow these companies to operate without debilitating restrictions.
Finally, the proposal for a crypto advisory council to collaborate with Congress and regulatory agencies aims to create a more cohesive regulatory environment. Such a body could facilitate dialogue between lawmakers and the rapidly evolving crypto landscape, ensuring that regulations adapt to technological advancements rather than stifling them.
The Blockchain Association’s strategic letter to the future administration encapsulates a moment of potential change in the U.S. approach to cryptocurrency regulation. By urging a rethinking of tax policies, accounting guidelines, and access to financial services, it presents a comprehensive vision that seeks not only to rectify existing issues but also to set a proactive path forward. As the crypto industry stands at a pivotal juncture, the forthcoming actions of the new administration will be critical in shaping its future.
