Regulation
Has Biden changed his stance on cryptocurrencies?
In recent weeks, US President Joe Biden has begun reaching out to major players in the cryptocurrency industry, potentially signaling that his administration is walking back its recent crackdown on cryptocurrencies.
However, as election season approaches, the industry finds itself wondering what to expect in the long run.
Biden’s unpopular crypto crackdown
The Biden administration has supported controversial SEC regulations on cryptocurrency taxation and custody, which many in the cryptocurrency industry have criticized as impractical and harmful to the industry.
The regulations would cause investors to be unable to amortize capital gains losses on unprofitable cryptocurrency trades made in quick succession or across similar assets, making many types of cryptocurrency trading and yield farming unsustainable.
Financial institutions dealing in cryptocurrencies would also be required to adhere to lengthy cryptocurrency custody reporting guidelines that would consume resources and potentially overwhelm the accounting departments of even the largest companies in the industry. The administration says these guidelines could generate $40 billion in tax revenue over the next decade.
These guidelines are part of the SEC Staff Accounting Bulletin rules called SAT 121. Biden has signaled that he intends to overturn a recent ruling to eliminate these guidelines, with lawmakers and industry participants across the cryptocurrency and blockchain industry pushing him to reconsider, and cryptocurrency lobbyists have donated $78 million in funding politicians who support taxes and crypto-friendly custody. regulations.
Cryptocurrency super PAC fights back
Three separate political action committees have joined forces to create a super PAC aimed at funding pro-crypto politicians. The three groups are called Protect Progress, Fairshake and Defend American Jobs.
While the full list of donors won’t be available until early next year, when campaign finance reports are made public, several familiar names are said to be participating.
The list so far includes P2P payments giant Circle, which has long supported the government’s introduction of clear regulations into cryptocurrencies, and cryptocurrency banking provider Ripple, which would be seriously affected by the proposed regulations and has now increased its his total donation to $50 million. of the last year.
Other members of the super PAC include cryptocurrency exchange Kraken, investment firm Paradigm and a number of individual donors including Coinbase CEO Brian Armstrong.
The fund has reportedly raised approx $110 million so far to donate to candidates that would influence regulations in their favor and conflict with the restrictive guidelines proposed in SAB 121.
Joe Biden’s new position on cryptocurrencies
The Biden administration has reportedly reached out to cryptocurrency institutions and experts in recent weeks to discuss the nature of crypto regulations.
While the super PAC group is focused on congressional candidates for now, the large investment is likely to have drawn a line in the sand for incumbent President Biden ahead of November’s presidential election.
It is also possible that it is recent Ethereum ETF Approvals from the SEC could signal a more welcoming climate for crypto projects overall, further softening Biden’s stance. With the growing integration of cryptocurrencies into mainstream institutional finance, the SEC’s proposed regulations would likely have broader ramifications across the financial sector that the Biden administration may not have anticipated.
What can cryptocurrencies expect from re-elected President Biden?
While Biden’s recent engagement with members of the cryptocurrency industry has been warmly received and seen as a potential change in tone regarding regulations, there is still no reason to celebrate for cryptocurrency users.
It is possible that the situation will be kept frozen until the election, where a victorious Biden would be in a much stronger position in terms of supporting tough regulations without backlash.
For now, all eyes are on the Biden administration to see if any new statements will be released to provide more clarity on the current position towards cryptocurrency taxation and custody, and crypto.news will be monitoring the situation closely.