Coin Center Warns US Policies Could Deter Crypto Innovators Despite Trump Win

While a potential Trump administration is expected to be beneficial for the cryptocurrency industry, Coin Center, a leading crypto advocacy group, cautions that ongoing US policies could still discourage investors and developers from operating in the United States.

In a blog post published on November 21, Coin Center's research director, Jerry Van Valkenburgh, analyzed the state of US crypto policy after the 2024 election and identified three "grave threats" facing crypto users and developers heading into 2025. These threats, which are largely centered around "surveillance issues," range from tax reporting requirements and anti-money laundering (AML) policies to ongoing legal proceedings involving the crypto mixer Tornado Cash and the Bitcoin wallet service Samourai Wallet.

Three Major Threats to Crypto Innovation

The first major concern is the crypto reporting requirements under Section 6050I of the US tax code, which mandates warrantless reporting to the IRS for anyone receiving $10,000 or more in cryptocurrency. Coin Center has previously argued that these reporting requirements are unconstitutional, as they create undue burdens on individuals and businesses.

The second and third threats stem from the sanctions placed on Tornado Cash, a crypto mixer, and the criminal charges for unlicensed money transmission brought against both Tornado Cash and Samourai Wallet. Coin Center expressed concern that the charges against Tornado Cash founder Roman Storm could set a dangerous precedent for developers of non-custodial crypto services.

Potential Impact of a Trump Administration

While there is hope that President Trump's pro-crypto stance may lead to more favorable regulatory policies, Van Valkenburgh noted that the administration may not scale back what he described as “overzealous” sanctions and AML policies. The Department of Justice, which operates independently of the executive branch, is unlikely to abandon its aggressive prosecutions, regardless of the political shift.

Van Valkenburgh added that even with a friendlier Securities and Exchange Commission (SEC), the continued enforcement of strict surveillance and control measures could undermine the growth of the crypto industry in the US. He warned that these policies could discourage innovation, drive developers away, and ultimately prevent ordinary Americans from benefiting from blockchain technologies.

Furthermore, Coin Center argued that current efforts to restrict access to crypto services do little to prevent criminal activity or terrorism but instead create significant barriers for legitimate users and innovators.

In conclusion, while a Trump administration may offer some positive shifts for the crypto industry, Coin Center warns that entrenched regulatory policies could still stifle growth and discourage crypto innovation in the United States.