Date: November 23, 2024
Author: Pablo Dávila S.
Trump's Victory: A Boost, But Not the Complete Solution
The US crypto landscape is facing a critical moment. While the recent election of Donald Trump has generated optimism among blockchain advocates, Coin Center, a prominent cryptocurrency advocacy group, warns that current policies could still discourage developers and investors from staying in the US market.
In a Nov. 21 post, Van Valkenburgh, Coin Center's research director, identified three main threats that could hinder the development of the crypto ecosystem in the United States. These threats, mostly related to surveillance policies, highlight the regulatory challenges that persist, even with a crypto-friendly president. #BecomeCreator
The Three “Serious Threats” to Cryptocurrencies in the US
Tax Reports Under Section 6050I
Section 6050I of the U.S. tax code requires that any cryptocurrency transaction over $10,000 be reported to the IRS. Coin Center argues that this rule, which does not require a court order, violates constitutional rights and poses a threat to users’ privacy. Although legal challenges have been filed against this regulation, it remains a significant hurdle for users and developers.Sanctions against Privacy Tools
The sanctions imposed on Tornado Cash and the criminal charges against its founder, Roman Storm, set a worrying precedent. These actions directly affect developers of privacy tools and non-custodial services. Furthermore, services like Samourai Wallet also face regulatory pressure, limiting innovation in solutions designed to protect privacy.Excessive Anti-Money Laundering (AML) Policies
Coin Center notes that aggressive AML policies could remain a problem even under a Trump administration. Despite the expectation that pro-crypto leadership will be appointed at agencies like the SEC and Treasury, these “draconian” measures could persist. The Department of Justice (DOJ), for example, could maintain its strict stance on cryptocurrency-related cases regardless of policy changes.
Optimism vs. Risks
Under Trump’s leadership, the crypto industry has reasons to be optimistic, especially with the possibility of a more favorable regulatory framework. However, according to Coin Center, some fundamental issues might not be resolved, such as sanctions and tax requirements.
Among the risks that Coin Center highlights are:
The possible flight of developers and investors to countries with more permissive regulatory frameworks.
The slowdown in innovation in blockchain-based privacy solutions.
The exclusion of US citizens from the benefits of decentralized technologies.
Coin Center also warns that these policies do not effectively address criminal use of crypto tools, questioning their effectiveness and purpose.
Memecoins and the Importance of Decentralization
As the crypto ecosystem evolves, assets like Bitcoin, Ethereum, and even memecoins like Dogecoin and PEPE continue to attract a global community. However, restrictive policies could push these communities toward more open jurisdictions, weakening the U.S. position as a leader in blockchain innovation.
Conclusion: Progress Amid Uncertainty
While the Trump administration may ease some regulatory tensions, the landscape remains complex. To establish itself as a leader in blockchain technology, the United States must address these restrictive policies and create an environment that promotes decentralization and privacy.
Note: This article is for informational purposes only and does not constitute financial or investment advice.
Do you think Trump's victory will be enough to revive crypto innovation in the United States, or will current policies continue to discourage development? Let us know your thoughts.
