U.S. Crypto Companies Caution: Ambiguous Regulations Jeopardize Leadership in Innovation

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U.S. Crypto Companies Caution: Ambiguous Regulations Jeopardize Leadership in Innovation

Bitget-RWA2025/11/20 22:44

By:Bitget-RWA

- Over 65 crypto firms, including Ethereum and Solana , urge U.S. regulators to establish unified rules for taxation, innovation, and developer protections to reduce sector uncertainty. - Industry highlights IRS's 2023 staking tax policy as unfair, seeking a $600 de minimis threshold and clearer guidelines to avoid penalizing unrealized gains. - DeFi advocates demand legal safeguards for developers after cases like Tornado Cash, urging SEC/CFTC to issue exemptions and DOJ to avoid prosecuting decentralized

More than 65 companies and groups in the cryptocurrency industry have addressed a letter to President Donald Trump, asking the U.S. government to provide clearer rules regarding taxation, financial innovation, and protections for developers in the crypto field. This letter, endorsed by leading entities such as

Ethereum

Solana

, and

Zcash

highlights the urgent need for a consistent regulatory system

to minimize confusion and encourage innovation. The group contends that the current inconsistent regulations from agencies like the SEC, IRS, and CFTC have led to uncertainty,

hindering industry growth and discouraging investment

U.S. Crypto Companies Caution: Ambiguous Regulations Jeopardize Leadership in Innovation image 0

Taxation was identified as a major concern in the letter. Industry leaders pointed out that the IRS’s 2023 policy, which taxes staking rewards when received rather than when sold, could result in taxes on gains that haven’t been realized. Senator Todd Young (R-IN) has raised similar issues,

urging a reassessment of this approach

to avoid placing undue strain on investors. The letter further advocates for a $600 de minimis exemption for taxable crypto transactions,

echoing a proposal

from Wyoming Senator Cynthia Lummis. Despite these appeals, the IRS has maintained its position,

implementing finalized digital asset reporting requirements

that will obligate centralized exchanges and wallet services to report transactions beginning in 2025. These measures, part of a wider initiative to address tax compliance gaps, will also extend oversight to foreign platforms pending a White House review.

The coalition also pressed for more transparent rules to support decentralized finance (DeFi) and token development, warning that unclear regulations leave both developers and users vulnerable to legal challenges. The letter calls on the SEC and CFTC to grant exemptions for DeFi protocols and urges the DOJ not to prosecute developers for creating decentralized applications. This request comes after the Tornado Cash case, in which developer Roman Storm was found guilty of running an unlicensed money transmission business. Although the DOJ recently stated that “writing code is not a crime,” the industry is seeking stronger assurances to protect innovation from regulatory overreach.

The letter also emphasizes the importance of coordinated efforts among federal agencies. The President’s Working Group Report on Digital Assets,

published in July 2025

, presented a plan for regulating crypto, but industry leaders argue that progress has been slow. The coalition is urging the SEC’s Crypto Task Force to provide interim guidance, warning that inconsistent agency policies could harm America’s global competitiveness. This need for action is heightened by international developments, as the IRS works to broaden its monitoring of offshore crypto transactions through new third-party reporting rules.

Recent nominations, such as Michael Selig’s selection to head the CFTC,

reflect a move toward greater crypto expertise

in regulatory bodies. Nonetheless, significant hurdles remain. The IRS’s updated reporting system, while designed to unify compliance standards, has been criticized for imposing heavy demands on platforms. At the same time, the White House’s review of offshore data access rules seeks to bring U.S. regulations in line with global norms but

may make compliance more difficult

for decentralized networks.

The crypto sector’s demand for regulatory clarity highlights the ongoing debate between fostering innovation and ensuring oversight. As the U.S. aspires to become the “crypto capital of the world,”

as stated in Executive Order 14178

, the results of these policy decisions will have a lasting impact on the industry’s future.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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