Regulation
Has Biden changed his stance on crypto?
Over the past few weeks, US President Joe Biden has begun reaching out to key players in the crypto industry, potentially signaling that his administration is reversing its recent crackdown on crypto.
However, as election time approaches, the industry is wondering what to expect in the long term.
Biden’s Unpopular Crypto Crackdown
The Biden administration has supported the SEC’s controversial crypto tax and custody regulations that many in the crypto industry have criticized as impractical and harmful to the space.
The regulation would ensure that investors would not be able to write off capital gains losses on unprofitable crypto trades made in rapid succession or between similar assets, making many types of crypto trading and trading untenable. yield farming.
Financial institutions specializing in cryptocurrencies would also be required to follow lengthy cryptocurrency custody reporting guidelines, which would consume resources and potentially overwhelm the accounting departments of even the largest companies in the sector. The administration says these guidelines could generate $40 billion in tax revenue over the next decade.
These guidelines are part of the rules in the SEC’s Staff Accounting Bulletin called SAB 121. Biden has signaled he intends to reverse a recent decision to remove those guidelines, with lawmakers and industry players in the crypto and blockchain space urging him to reconsider, and crypto lobbyists have donates $78 million in funding to politicians supporting a crypto-friendly tax and custody. regulations.
Crypto 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.
Although the full list of donors won’t be available until early next year, when campaign finance reports are released, a number of well-known names are believed to be participating.
The list so far includes P2P payments giant Circle, which has long supported the introduction of clear government regulations in crypto and crypto banking settlement provider Ripple, which would be seriously affected by the proposed regulations and has now increased his total donation at $50 million. since last year.
Other members of the super PAC are crypto exchange Kraken, investment firm Paradigm and a number of individual donors, including Coinbase CEO Brian Armstrong.
The fund would have collected approximately $110 million so far to donate to candidates who would influence regulations in their favor and deviate from the restrictive guidelines proposed in SAB 121.
Joe Biden’s new stance on crypto
The Biden administration has reportedly contacted crypto institutions and experts in recent weeks to discuss the nature of crypto regulation.
While the Super PAC group is focused on congressional candidates for the moment, it is likely that this major investment has drawn a line in the sand for outgoing President Biden ahead of the November presidential elections.
It is also possible that recently Ethereum ETF Approvals by the SEC could signal a more welcoming climate for crypto projects overall, further softening Biden’s stance. As crypto becomes increasingly integrated into traditional institutional finance, the SEC’s proposed regulations would likely have broader ramifications across the financial industry that the Biden administration may not have anticipated.
What can crypto expect from a re-elected President Biden?
Although Biden’s recent engagement with members of the crypto industry was warmly received and seen as a potential change in tone regarding regulation, there is no reason for celebration yet for crypto users .
It is possible that the situation remains frozen until the election, where a victorious Biden would be in a much stronger position to support strict regulations without blowback.
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 on tax and custody on cryptocurrencies and crypto.news will follow the situation up close.