The U.S. appears to be shifting its confrontational stance towards Blockchain and Cryptocurrencies to a more supportive posture, providing clear guidance and rules to help builders follow these rules. While this shift is still in its early stages, the government has taken some encouraging steps towards this goal. New leadership, new rules, new task forces - all of these measures provide the crypto industry with what it desperately needs: a viable path forward.
Although in recent years, crypto startups have faced lawsuits, turf wars between regulators, angry letters from lawmakers, unbanking incidents, and regulatory enforcement, the past few weeks have shown a more optimistic, pro-tech attitude. From the White House to the regulators, we've seen moves to appoint AI and Cryptocurrency commissioners and issue executive orders supporting Blockchain development.
The Securities and Exchange Commission has established a new Cryptocurrency task force and rescinded the Staff Accounting Bulletin 121 rule that had previously hindered Cryptocurrency development. In both houses of Congress, key legislators have also expressed a willingness to provide legislative clarity for the industry.
To facilitate dialogue between government officials and Blockchain experts, we have gathered insights from 11 industry experts, covering topics from taxation, Staking freedom, to broader issues like incentivizing decentralization and reforming the U.S. regulatory system. These perspectives provide important considerations for policymakers as they think through Cryptocurrency regulation, ensuring the U.S. leads during this critical moment of transition to the next generation of the internet.
Why decentralization is so important, and why incentives are needed
——Miles Jennings
Here is the English translation of the text, with the specified terms retained and not translated:Decentralization is crucial. It has driven new governance structures, organizational forms, and powerful economic systems - meaning more choice, more voices, and more competition. But in reality, achieving decentralization has always been difficult, as it often lacked the efficiency and stability of centralized systems - until now.
Over the past decade, as technology has advanced, we have reached a stage where decentralization can truly operate and be applied to many areas of digital life. But now we face a new challenge: how to incentivize decentralization. Despite many obstacles, many builders have successfully achieved decentralization at scale. To attract more builders to participate, we just need a clearer path forward and a fair competitive environment.
"Like gravity, centralization is a force that is hard to resist. In contrast, decentralization - shifting control and power to distributed groups - is inefficient. It takes tremendous energy, effort, and engineering to overcome the natural order."
Miles Jennings is the General Counsel of a16z crypto, providing advice on decentralization, DAOs, governance, NFTs, and state and federal securities laws for the firm and its portfolio companies. Prior to this, he was a partner at Latham & Watkins, co-leading the firm's global blockchain and cryptocurrency working group.
The SEC Embraces the (Digital) Age
——Scott Walker and Bill Hinman
The U.S. Securities and Exchange Commission (SEC) can make six immediate adjustments to establish appropriate regulatory rules - without sacrificing innovation or critical investor protection.
"Through these adjustments, the SEC can restore its mission and reposition itself as a forward-looking regulator, ensuring U.S. markets remain competitive while also protecting the public interest."
Scott Walker is the Chief Compliance Officer at Andreessen Horowitz. Prior to this, he served as a Senior Advisor for Digital Assets and Blockchain Technology in the Division of Corporation Finance at the U.S. Securities and Exchange Commission (SEC), and was a Vice President and Counsel at BlackRock, focusing on derivatives, prime brokerage, and securities financing transactions.
Bill Hinman is currently an Advisory Partner at a16z crypto and a Senior Advisor at the global law firm Simpson Thacher & Bartlett LLP. From 2017 to 2020, Bill served as the Director of the Division of Corporation Finance at the U.S. Securities and Exchange Commission.
Let Staking Flourish in the U.S.
——Ji Kim and Alison Mangiero
Staking - allowing users to participate in maintaining and securing specific blockchain networks - has revolutionary potential. Here are five steps the SEC can take to ensure the staking industry thrives.
"The U.S. should lead on innovation, focusing on how to make these 'financial' infrastructures more efficient, secure, and accessible."
Ji Kim is the President and Interim Executive Director of the Crypto Council for Innovation. Previously, he served as the Chief Legal and Policy Officer for the group, with 15 years of experience as a technology company legal advisor and policy executive.
Alison Mangiero is the Executive Director of the Proof Of Stake Alliance, an initiative of the Crypto Council for Innovation, advocating for clear and forward-looking public policies to foster innovation in the staking industry. Previously, she founded Tocqueville Group, an entity building open-source software and other public goods for the Tezos blockchain network.
Ending the Era of Mass Financial Surveillance
——Grant Rabenn
The 1970 Bank Secrecy Act created a massive financial records database - the FinCEN database - putting our sensitive personal data at risk. Blockchain technology provides a better way forward.
"The Bank Secrecy Act spawned a vast regulatory-industrial complex, requiring U.S. financial institutions to monitor customers on a daily basis."
Grant Rabenn is the Head of International Legal Compliance (APAC and Americas) at Coinbase. Prior to joining Coinbase, Grant spent a decade as a federal prosecutor, specializing in money laundering and cybercrime cases, and leading the government's early cryptocurrency investigations.
Anyone Can Get Debanked. DeFi Is a Critical Safety Net
——Katherine Minarik
What happens when you lose control of your family's primary bank account - with no explanation or recourse? Self-custody of crypto assets can provide a lifeline when traditional finance fails.
"That bank has indefinitely frozen all of our accounts. Our bank staff cannot tell us any more information. They can't even tell us if, how, or when we might be able to access our funds... It's an incredibly frightening experience."
Katherine Minarik is the Chief Legal Officer at UniswapLabs. Prior to this, she was the Vice President and Deputy General Counsel at Coinbase, overseeing global litigation matters.
It's Time to Bring Assets On-Chain
——Jenny Cieplak
Tokenization is a method of digitally recording asset ownership, often on a Blockchain - a practice that could greatly modernize financial infrastructure. If the SEC stops arbitrarily prohibiting these assets from going on-chain, traditional financial institutions could benefit.
"Theoretically, this should open the door to using the latest and most advanced technologies - including Blockchain and distributed ledger technology."
Jenny Cieplak is a Partner at Latham & Watkins LLP, advising fintech and financial services clients on new technology development and deployment. Her practice bridges the intersection of industry regulation, front-end technology, and financial services.
Why the DOJ's Action Against DeFi Is a Disaster
——Miller Whitehouse-Levine and Amanda Tuminelli
The core issue that all other policies and legal issues must address is: who is in control? Some lawsuits against DeFi protocols are based on erroneous assumptions about the identity of the controllers and the extent of their control, causing unnecessary damage to the development of the blockchain.
"Blaming the car manufacturer for the improper driving behavior of its vehicle users is clearly unreasonable, and the same logic applies to holding the car manufacturer responsible for the driver's actions."
Miller Whitehouse-Levine is the Executive Director of the DeFi Education Fund. Prior to this, he led policy operations at the Blockchain Association and worked on various public policy issues involving cryptocurrencies at Goldstein Policy Solutions.
Amanda Tuminelli is the Chief Legal Officer of the DeFi Education Fund, responsible for leading impact litigation and policy work. Previously, she was an attorney at Kobre & Kim, defending clients and handling criminal and regulatory investigations, government enforcement actions, and large-scale litigation, particularly in the cryptocurrency and blockchain space.
Why We Need Decentralized Stablecoins
——Luca Prosperi
Centralized stablecoins have become a pillar of DeFi, but they rely on traditional financial intermediaries. Decentralized stablecoins can serve as a reliable, efficient, and trustless system, reducing reliance on custodial financial intermediaries.
"This so-called world of decentralized stablecoins not only has the potential to fundamentally change the way we create money, but it could actually revolutionize the entire financial intermediation system."
Luca Prosperi is the co-founder and CEO of M^0, a project dedicated to building decentralized stablecoin infrastructure. Previously, he was responsible for lending governance at the DeFi project MakerDAO and published research at Dirt Roads.
Rethinking SEC Rulemaking: Why Crypto Needs Its Own Rules
——Scott Walker
Applying rules designed for traditional securities markets to cryptocurrencies is not always reasonable, but the SEC seems to be doing just that. Now, the SEC has an opportunity to adopt a tailored rulemaking approach that will foster the growth of blockchain technology while protecting investors and consumers.
"The SEC is often criticized for its 'enforcement-style regulation' in crypto-related matters, but less attention is paid to its 'rule expansion kit' - applying rules developed for other markets or products directly to emerging technologies - which is equally counterproductive."
Scott Walker is the Chief Compliance Officer at Andreessen Horowitz. Prior to this, he served as a senior expert on digital assets and blockchain technology in the regulatory division of the U.S. Securities and Exchange Commission (SEC), and as a Vice President and Legal Counsel at BlackRock, focusing on derivatives, prime brokerage, and securities financing transactions.
How the U.S. Can Benefit from an Effective Cryptocurrency Tax Policy
——David Kerr
Given the complexity of tax laws and the innovative organizational structures required for decentralized systems, policymakers have faced significant challenges in effectively developing reporting requirements and tax treatment rules for digital assets. However, this legislative session presents a historic opportunity for the U.S. to regain leadership, as cryptocurrencies are reshaping the global financial system and impacting the future of the internet.
"Will the U.S. be the one to write the rules of the 21st century internet, or will it only be able to watch as others reap the rewards?"
David Kerr is the Principal at Cowrie LLC, with 10 years of experience in tax strategy, financial accounting, and risk advisory, providing risk mitigation strategies for clients in industries such as gaming, telecommunications, and technology-driven online marketplaces, with a focus on Web3 issues.
Should the U.S. Implement a Bitcoin Strategic Reserve?
——Christian Catalini
The recently proposed Bitcoin strategic reserve is a good starting point - but it is just the beginning. There is an opportunity to leverage Bitcoin's connection to the fault lines in the global financial system while maintaining U.S. leadership.
"But the real opportunity is not simply in holding Bitcoin; it is in how to integrate it into the global financial system in a way that strengthens, rather than weakens, America's economic leadership position."
Christian Catalini is the co-founder of Lightspark and the founder of the MIT Cryptoeconomics Lab.
