Key Takeaways:
- Coin Center warns that strict tax reporting and AML rules could drive crypto businesses out of the US.
- Tornado Cash sanctions, along with legal actions against its developers, may discourage non-custodial crypto platforms from surfacing.
- Balanced policies are essential to keep the US competitive in the global crypto market.
Coin Center, a non-profit crypto advocacy group, has warned that while a Trump victory would be a net good for the crypto business, entrenched policies might still drive crypto entrepreneurs away from the United States.
In a blog article published on November 21 evaluating the situation of US crypto policy following the 2024 election, Coin Center’s research director, Van Valkenburgh, identified three “grave threats” to US crypto consumers and developers in 2025.
All three risks are referred to as “surveillance issues” and span from tax reporting and Anti-Money Laundering (AML) policies to ongoing criminal actions concerning the cryptocurrency mixer Tornado Cash and Bitcoin wallet service Samourai Wallet.
Three “Grave” Threats to Cryptocurrencies
The first major threat stems from crypto reporting obligations under Section 6050I of the US tax code, which now requires warrantless reporting to the IRS for people who receive $10,000 in cryptocurrency.
Coin Center claimed in August of last year that these reporting obligations are illegal.
The second and third big concerns are the sanctions imposed on Tornado Cash, which include criminal accusations for unlicensed money transmission filed against the mixing service and Samourai Wallet.
According to Coin Center, the charges brought against Tornado Cash inventor Roman Storm could establish a troubling precedent for developers of non-custodial cryptocurrency platforms.
“At the agency level, there’s reason to believe that controversial ongoing rulemakings will be frozen or even abandoned due to President Trump’s generally pro-crypto stance and his likely choices for appointees at the SEC and Treasury.”
However, Valkenburgh warned that the new administration may not be interested in reducing “overzealous” sanctions and anti-money laundering regulations.
“The [Department of Justice] may change under a Trump administration, but it rightly guards its political independence and may, therefore, be unlikely to abandon these prosecutions because of a change in administration,” according to Valkenburgh.
“We’re nonetheless hopeful that there can be progress here if it becomes increasingly clear that even with a friendlier SEC, draconian surveillance and control policies will continue to drive innovators away from the US, chill development, and deny ordinary Americans the benefits of these technologies.”
Valkenburgh also stated that current procedures to prohibit people from using crypto services accomplish “very little to actually prevent criminals and terrorists” from using the tools.
Conclusion
A Trump administration could create a more crypto-friendly regulatory environment, but some long-standing policies might still spell trouble. Coin Center points out some big concerns: aggressive tax reporting requirements, strict anti-money laundering (AML) rules, and sanctions targeting decentralized tools like Tornado Cash.
These moves could set the wrong impression, making developers think twice about working in the US. And that’s not all—such policies could also put the brakes on innovation and hurt the country’s ability to compete in the global crypto market.
In order for the US to remain competitive, lawmakers need to strike a better balance. In addition to enforcing rules, they must also create regulations that allow crypto to thrive.
