Has he altered his position on cryptocurrency
US President Joe Biden has recently been making efforts to connect with major players in the cryptocurrency industry, indicating a potential shift in his administration’s approach towards crypto. However, as the election season approaches, there is uncertainty about what to expect in the long term.
Biden’s previous crackdown on crypto has been met with criticism from the industry. The controversial SEC crypto tax and custody regulations, which the administration supports, have been deemed impractical and harmful to the space. These regulations would prevent investors from deducting capital gains losses from unprofitable crypto trades, making certain types of crypto trading and yield farming unviable. Additionally, financial institutions dealing with crypto would have to comply with extensive crypto custody reporting guidelines, which could strain resources and overwhelm accounting departments. The administration claims that these guidelines could generate $40 billion in tax revenue over the next decade.
These guidelines are part of the SEC’s Staff Accounting Bulletin rules known as SAB 121. Biden has indicated his intention to reverse a recent ruling that would eliminate these guidelines. Lawmakers and industry participants in the crypto and blockchain space have urged him to reconsider, and crypto lobbyists have donated $78 million to politicians who support crypto-friendly tax and custody regulations.
To counter the crackdown, three political action committees (PACs) have joined forces to create a super PAC that aims to financially support pro-crypto politicians. The PACs, called Protect Progress, Fairshake, and Defend American Jobs, have received donations from prominent names in the industry. Companies like Circle and Ripple, as well as individuals like Coinbase CEO Brian Armstrong, have contributed to the cause. The super PAC has raised approximately $110 million so far to support candidates who will advocate for favorable regulations and oppose the restrictive guidelines proposed in SAB 121.
Reports suggest that the Biden administration has been engaging with crypto institutions and experts to discuss crypto regulations in recent weeks. While the super PAC is currently focused on congressional candidates, their significant investment could potentially influence President Biden’s stance on crypto leading up to the presidential elections in November. Furthermore, the recent approvals of Ethereum exchange-traded funds (ETFs) by the SEC may indicate a more welcoming environment for crypto projects overall, potentially softening Biden’s position. The proposed SEC regulations would have broader implications for the financial industry, which the Biden administration may not have fully anticipated as crypto becomes increasingly integrated into mainstream institutional finance.
Despite the positive reception of Biden’s recent engagement with the crypto industry, it is premature to celebrate for crypto users. It is possible that the situation will remain unchanged until the election, where a successful Biden could have more leverage to support stringent regulations without facing significant backlash. Currently, the industry is closely watching the Biden administration for any new statements that provide clarity on their stance towards crypto tax and custody regulations. Crypto.news will closely monitor the situation as it unfolds.
In related news, the Markets in Crypto-Assets Regulation (MiCA) is expected to transform the European Union into a hub for crypto adoption this year.
