65+ cryptocurrency companies urge the Trump administration for immediate action on tax and privacy policies

Source: Yellow Original Title: 65+ cryptocurrency companies urge the Trump administration for immediate action on stalled tax and privacy rules

Original Link: https://yellow.com/en/news/65±cryptocurrency-companies-press-the-trump-administration-for-immediate-action-on-stalled-tax-and-privacy-rules More than 65 cryptocurrency organizations have urged President Donald Trump to bypass Congress and direct federal agencies to immediately clarify digital asset regulations, as the industry grows impatient with the pace of legislative reform and increasing legal uncertainties surrounding privacy technologies threaten innovation.

In a letter sent on Thursday to the White House, key industry players, including a regulated trading platform, a DEX platform, the Blockchain Association, and the Solana Foundation, outlined specific actions that the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Department of the Treasury, and the Department of Justice can take without new legislation.

The coordinated push aims to turn Trump's pro-crypto campaign promises into concrete agency actions through executive authority.

The letter arrives as the SEC's Cryptocurrency Task Force prepares to hold a public roundtable on financial oversight and privacy, highlighting how privacy concerns have moved to the forefront of the regulatory debate following recent scrutiny of developers working on privacy-enhancing technologies.

The industry seeks executive action on multiple fronts

The coalition letter, led by the Solana Policy Institute, emphasizes that agencies can deliver “immediate steps” to provide regulatory clarity while Congress continues its slower legislative process. The coordinated effort represents one of the most comprehensive policy pushes from the cryptocurrency industry since Trump's electoral victory.

Regarding fiscal policy, the signatories urge the Department of the Treasury to issue guidelines treating staking and mining rewards as “self-created property taxed at the time of disposal” rather than immediately taxable income, a change that would significantly reduce compliance burdens for millions of cryptocurrency users. The letter also requests clarification that bridge, wrap, and cross-chain transactions constitute non-taxable events, along with de minimis tax rules that exclude gains on purchases up to $600.

For regulatory clarity, the industry wants the SEC's Cryptocurrency Working Group to provide provisional guidance clarifying that developers of “open-source and permissionless protocols” receive protection from enforcement actions during the current rule-making processes. This safe harbor provision has become increasingly urgent following high-profile scrutiny of privacy software developers.

Regarding DeFi protection, organizations are seeking updated guidance from the Financial Crimes Enforcement Network ( FinCEN ) confirming that the Bank Secrecy Act does not apply to non-custodial blockchain software, consistent with the agency's stance in 2019 on virtual currencies but contradicted by recent enforcement actions.

Controversial call to withdraw oversight from privacy developers

Perhaps more controversially, the letter urges the Department of Justice to dismiss charges against privacy software developers, arguing that their work “represents the publication of open source software, not a financial crime.”

The call comes as the cryptocurrency community faces similar concerns regarding other software developers focused on privacy, who recently received prison sentences. These prosecutions have sent shockwaves through the developer community and raised fundamental questions about whether creating privacy-enhancing software constitutes criminal activity.

“Significant withdrawals from Bitcoin ETFs indicate that institutional players are taking profits off the table,” said Przemysław Kral, CEO of a European cryptocurrency platform. “Therefore, it is important to recognize the risks. Volatility is high, and the macroeconomic environment can change quickly.”

Daniel Liu, CEO of Republic Technologies, told reporters that he supports the call for clarity but warned that “it is much more important for regulators to proceed methodically and do it right than to move too quickly and risk creating additional confusion.” He added that as long as the actions of the agencies are clearly defined, he would not expect individual states to challenge or fragment the framework.

The SEC faces the balance between privacy and surveillance

The industry's push for regulatory clarity comes as the SEC faces thorny questions about how to balance privacy protections with financial surveillance requirements. The SEC's Cryptocurrency Working Group roundtable, led by Commissioner Hester Peirce - known in the crypto community as “Crypto Mom” - brings together panelists developing cutting-edge privacy technologies alongside politicians facing oversight responsibilities.

The round table will explore how privacy-focused tools like zero-knowledge proofs, which allow for transaction verification without revealing sensitive data, align with existing requirements for Anti-Money Laundering (AML) and Know Your Customer (KYC). The discussion comes at a critical time where regulations on on-chain analysis tools and privacy protection intersect with law enforcement concerns.

“The technology that helps Americans protect their privacy is critically important as it allows individuals to choose when and with whom to share sensitive data about themselves so they can be protected from malicious actors,” Peirce stated while announcing the roundtable. “Understanding recent developments in tools that protect privacy will assist the SEC and other financial regulators as we work on policy solutions in the crypto space.”

The roundtable format means that it will not result in immediate policy proposals or rulemaking. Rather, it serves as a public consultation designed to gather the opinions of stakeholders before the SEC potentially defines formal regulatory guidance - a process that typically influences policy priorities within 6-18 months.

Privacy technologies gain momentum amid legal uncertainty

Recent legal developments have brought privacy technologies to the forefront while creating significant uncertainty for developers. Recent verdicts in cases involving privacy software developers have raised fundamental questions about the legal status of privacy-enhancing tools.

Both cases involved non-custodial privacy technologies - software that operates without centralized control - instead of custodial platforms or service providers. Legal specialists who monitor the application of digital assets say that the cases have created ambiguity about how U.S. legal and regulatory frameworks interpret non-custodial systems and the development of open source code.

Legal pressure has not diminished market interest in privacy solutions. Privacy tokens saw significant price increases starting in October, with coins like Zcash experiencing a strong rebound in recent months. The renewed attention recalls the cypherpunk roots of cryptocurrencies - the fundamental belief that cryptographic technology should protect digital communication and limit the exposure of information to external third parties.

“Authoritarians thrive when people have no privacy. When authorities start to become hostile towards privacy protections, it is an important warning sign,” said Naomi Brockwell, founder of the Ludlow Institute, an organization that advocates for freedom through technology.

The Trump administration shows mixed signals

The coordinated effort of the industry acknowledges some of the achievements of the Trump administration, including the repeal of the IRS Corridor Rule and the passage of the GENIUS Act, a regulatory framework for stablecoins. However, the letter argues that more can be achieved through executive action to fulfill Trump’s campaign promise to make America “the crypto capital of the world.”

The moment is strategic. The letter arrives as Trump's nominee for the CFTC moves toward confirmation in the Senate, although he refused to commit to expanding the agency's resources despite the anticipated crypto oversight responsibilities during his recent hearing. Meanwhile, the Treasury's proposed rules on international cryptocurrency tax reporting have reached the White House for review, allowing the IRS to obtain information on Americans' foreign crypto accounts - a development that has raised concerns among privacy advocates.

The administration launched the SEC's Cryptocurrency Task Force on January 21, with acting Chairman Mark Uyeda, aiming to develop “a comprehensive and clear regulatory framework for crypto-assets.” The task force represents a philosophical shift from the previous administration's enforcement approach under former SEC Chairman Gary Gensler, who resisted cryptocurrency ETFs and brought numerous enforcement cases against industry leaders.

Final thoughts

The convergence of industry demands, regulatory inquiries, and ongoing oversight represents a critical moment for the formation of crypto policies. The industry letter emphasizes that the “roadmap exists” following the President's Working Group on Digital Assets report released in July, which outlined recommendations for banking, stablecoins, and taxation. Now, organizations argue, agencies must act to consolidate U.S. leadership.

However, the path forward remains fraught with tensions. Excessive surveillance could push users toward “privacy-only” tools and reduce cooperation with regulated actors, while overly permissive rules could compromise consumer protection and the effectiveness of investigations. How regulators define the responsibility of intermediaries will impact compliance costs, market access, and business models across the industry.

Industry analysts point out that public consultations, such as the SEC roundtable, tend to influence regulatory priorities and interpretative guidance within 6 to 18 months. The quality of the contributions collected and their translatability into operational guidelines will determine whether the current moment yields significant regulatory clarity or simply prolongs the uncertainty that has plagued the sector.

As the cryptocurrency industry seeks to capitalize on the Trump administration's pro-innovation stance, the fundamental question remains: Can regulators balance privacy protection with the needs of surveillance while fostering innovation, or will legal uncertainty continue to drive development abroad and cool domestic innovation?