Coin Center: US Crypto Policies Could Repel Investors Despite Trump Victory

A Trump win may be seen as positive for crypto, but Coin Center warns that outdated US policies could still scare away crypto innovators. The non-profit group says even with a pro-crypto administration, the US government's strict surveillance and regulatory policies might drive developers and investors elsewhere. 

Three Major Threats to Crypto

One of the biggest concerns is Section 6050I of the US tax code, which mandates reporting to the IRS for any cryptocurrency transaction over $10,000. Coin Center argues this policy, which doesn’t require a warrant, infringes on privacy rights. 

They’ve previously called the rule unconstitutional, fearing it could hinder innovation in the crypto space. The second and third threats stem from actions against crypto services like Tornado Cash and Samourai Wallet. 

Tornado Cash, a crypto mixer, faced sanctions for alleged money laundering activities, while Samourai Wallet has been hit with criminal charges. Coin Center believes these actions could discourage developers of non-custodial crypto services.

Can a Pro-Crypto Administration Make a Difference?

While Trump’s administration may be more crypto-friendly, Coin Center isn’t optimistic that significant changes will come to surveillance and anti-money laundering policies. Valkenburgh pointed out that the Department of Justice might continue these tough measures, even with a crypto-friendly SEC and Treasury.

He argued that these policies don't prevent criminals from using crypto but do harm legitimate innovation. Valkenburgh stressed that the US could miss out on the benefits of crypto if these overreaching rules persist.

For now, Coin Center is hopeful for change but warns that current surveillance policies pose a serious threat to US crypto growth. Without a shift in these regulations, the US could fall behind in the global crypto race.