Over the past few weeks, US President Joe Biden has been making efforts to engage with prominent figures in the cryptocurrency industry. This interaction may indicate that his administration is shifting its position on the regulations that govern cryptocurrencies.
Despite this, the industry is uncertain about the future as the upcoming election season approaches.
Biden’s Unpopular Crypto Crackdown
Vice President Joe Biden’s administration has demonstrated its support for the controversial regulations imposed by the Securities and Exchange Commission (SEC) concerning cryptocurrency taxes and custody. Much of the cryptocurrency industry has criticized these regulations as impractical and potentially harmful to the space.
The regulations would render various forms of cryptocurrency trading and yield farming impractical, ensuring that investors could not deduct capital losses from unprofitable cryptocurrency trades made quickly or between similar assets.
In addition, financial institutions involved in cryptocurrency transactions would be required to comply with extensive reporting guidelines for cryptocurrency custody. These guidelines may place a significant burden on resources and may even overwhelm the accounting departments of even the most prominent companies in the industry. The administration has stated that these guidelines have the potential to bring in an astounding forty billion dollars in tax revenue over the next ten years.
One of the rules that can be found in the Staff Accounting Bulletin of the Securities and Exchange Commission is referred to as SAB 121. There have been legislators and members of the blockchain and cryptocurrency community who have urged Vice President Biden to reconsider his decision to eliminate these guidelines, and Biden has indicated that he intends to reverse the decision. Lobbyists working in the cryptocurrency industry have provided politicians with a substantial amount of funding totaling $78 million in order to advocate for tax and custody regulations that are favorable to cryptocurrencies.
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Crypto Super PAC Retaliates
The establishment of a super PAC has been a collaborative effort between three separate political action committees, with the intention of providing financial support to politicians who advocate for cryptocurrency. The three organizations are referred to by their respective names: Defend American Jobs, Fairshake, and Protect Progress.
A number of well-known people are reportedly contributing to the campaign, but the complete list of contributors will not be made public until the beginning of the following year when the reports on campaign finances are made available to the public.
Circle, a major player in peer-to-peer (P2P) payments, is one of the companies that are included on the list. Additionally, Circle has been a consistent advocate for transparent regulations in the cryptocurrency industry. Ripple, a company that offers services related to the settlement of cryptocurrency transactions, is also included in this category. If the proposed regulations were put into effect, Ripple would be subject to significant consequences. Ripple has recently increased the total amount of money it has donated to $50 million, which is a substantial increase from the previous year.
Additional members of the super PAC include the cryptocurrency exchange Kraken, the investment firm Paradigm, and several individual contributors, including Brian Armstrong, the CEO of Coinbase.
Reports indicate that the fund has amassed approximately 110 million dollars up to this point to provide financial assistance to candidates who can influence regulations in their favor and avoid the stringent guidelines presented in Senate Bill 121.
Joe Biden’s Fresh Perspective on Cryptocurrency
Reports indicate that the administration of Vice President Joe Biden has been actively engaging with cryptocurrency institutions and experts in order to hold discussions regarding the regulations that surround cryptocurrencies over the past few weeks.
Although the super PAC organization is currently focusing its attention on candidates for congressional seats, this substantial investment has likely established a clear boundary for President Biden, who is running for re-election in the upcoming presidential elections in November.
The recent approvals of Ethereum exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) could be an indication of a more favorable environment for cryptocurrency projects in general, which could potentially lead to Biden taking a more flexible stance.
The proposed regulations from the Securities and Exchange Commission (SEC) could potentially have far-reaching consequences across the entire financial industry, which the Biden administration of the United States may not have anticipated. This is because cryptocurrency is becoming increasingly integrated into mainstream institutional finance.
What Does the Future Hold for Cryptocurrency Under a Second Term of President Biden?
Cryptocurrency users should wait to start celebrating despite Biden’s recent interaction with individuals from the cryptocurrency industry, which has been positively received and seen as a possible shift in attitude towards regulations.
The matter may be put on hold until the election. If Biden were to win, he would have more leverage to implement stringent regulations without encountering opposition.
Presently, attention is being directed toward President Joe Biden’s administration to ascertain whether or not any new announcements will be made to provide more lucid guidance on the current position concerning the taxation and custody of cryptocurrencies.
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