As a seasoned researcher with a background in both law and technology, I find myself deeply concerned about the future of cryptocurrency in the United States. My personal experiences have led me to appreciate the transformative potential of blockchain technology, yet I am also acutely aware of the challenges it faces in navigating complex regulatory landscapes.
The non-profit organization Coin Center, which champions cryptocurrency, has stated that while a victory for Donald Trump might generally be beneficial for the crypto sector, existing policies could potentially deter innovative minds in the crypto field from choosing the United States as their base of operations.
In a November 21st blog post, Coin Center’s Research Director, Van Valkenburgh, highlighted three significant risks that cryptocurrency users and creators in the U.S. might face as they approach 2025, following the 2024 election.
The threats, numbering three, are generally classified as “monitoring concerns” and span across various areas. These include matters related to tax declarations and anti-money laundering (AML) regulations, as well as ongoing criminal investigations linked with the crypto mixer Tornado Cash and the Bitcoin wallet service Samourai Wallet.
Three “grave” threats to crypto
One potential rephrasing could be: The primary concern arises from the crypto reporting regulations as stated in Section 6050I of the U.S. tax law, which at present requires individuals to report transactions worth $10,000 or more in cryptocurrency without a warrant, directly to the Internal Revenue Service (IRS).
In August last year, Coin Center argued that these reporting requirements are unconstitutional.
The significant dangers number two and three arise from the imposition of sanctions on Tornado Cash, encompassing accusations of unauthorized money transfer violations leveled against the mixer service and Samourai Wallet.
According to Coin Center, the accusations against Tornado Cash founder, Roman Storm, may establish an uneasy precedent that could potentially concern creators of decentralized cryptocurrency platforms.
At the agency level, it appears that contentious rule-making related to cryptocurrency may be put on hold or even discarded, given President Trump’s largely favorable views towards crypto and his expected picks for positions at the Securities and Exchange Commission (SEC) and the Treasury.
Yet, according to Valkenburgh, the incoming administration might not show a willingness to ease up on stringent sanctions and Anti-Money Laundering (AML) measures.
According to Valkenburgh, the Department of Justice could potentially alter under a Trump administration; however, it’s crucial for this department to maintain its political neutrality. Given this, it might be unwilling to discontinue ongoing investigations due to a shift in power.
There’s still optimism that we might see advancements in this area, but if it turns out that a more lenient SEC doesn’t change strict monitoring and regulation policies, these rules could deter innovators from the U.S., stifle growth, and deprive ordinary citizens of the advantages these technologies offer.
As an analyst, I’d rephrase Valkenburgh’s statement as follows: The current restrictions aimed at deterring individuals from utilizing cryptocurrency platforms seem ineffective in truly obstructing criminal activities and terrorist financing.
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2024-11-23 08:25