The U.S. seems to be turning its combative stance on blockchains and crypto toward a more supportive one that offers guidance and clarity on the rules for builders to follow. While it’s still early, a number of encouraging steps have already been taken across government toward that end. New leadership, new rules, new task forces — all of these help give the crypto industry something that it has sorely lacked: a meaningful path forward.
Whereas recent years were marked by lawsuits against startups, turf wars between regulatory agencies, angry letters from lawmakers, incidents of debanking, and regulation-by-enforcement, the past few weeks signal a much more optimistic, pro-tech approach. From the White House, we’ve seen the appointment of an AI & Crypto Czar and an executive order declaring support for blockchain development. The Securities & Exchange Commission (SEC) has formed a new crypto task force and repealed Staff Accounting Bulletin 121, a damaging rule that had held back crypto development. And in both houses of Congress, prominent legislators have indicated a willingness to enshrine clear rules of the road for the industry in legislation.
To foster the conversation between government officials and blockchain experts, we’ve gathered 11 views from industry experts on issues ranging from taxes and the freedom to stake, to broader issues like encouraging decentralization and reforming the U.S. regulatory regime. These views offer policymakers important considerations for how to approach crypto regulation, ensuring that the U.S. leads this critical shift toward the next generation of the internet.
1. Why decentralization matters, and needs incentives
by Miles Jennings
Decentralization matters. It enables new governance, organizations, and robust economies — leading to more choice, more voice, and more competition. But in practice, it’s been hard to pull off because the technologies to coordinate at scale haven’t been possible (or available to all). Against the efficiency and stability of centralized systems, decentralized options — which had added cost and complexity — didn’t stand a chance… until now.
With over a decade of proven technologies, we have reached a point where decentralization works, and can be applied to many areas of digital life. But now we face a new challenge: Incentivizing decentralization. Many builders are already making decentralization work at scale — despite the many obstacles in the way. To bring more builders into the fold, we just need a clearer path forward and a level playing field on which to compete.
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Much like gravity, centralization is a force that’s hard to resist. By comparison, decentralization — transferring control and power to distributed groups — is inefficient. It requires immense energy, effort, and engineering to overcome the natural order.
Miles Jennings is General Counsel of a16z crypto, where he advises the firm and its portfolio companies on decentralization, DAOs, governance, NFTs, and state and federal securities laws. Previously, he was a partner at Latham & Watkins where he cochaired its global blockchain and cryptocurrency task force.
2. A new (digital) age at the SEC
by Scott Walker and Bill Hinman
The SEC can easily make six adjustments, immediately, to create fit-for-purpose regulations — without sacrificing innovation or critical investor protections.
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With these adjustments, the SEC can reclaim its purpose and reposition itself as a forward-thinking regulator, ensuring that U.S. markets remain competitive while also safeguarding the public.
Scott Walker is Chief Compliance Officer at Andreessen Horowitz. Previously, he was the Senior Specialist for Digital Assets and Blockchain Technology in the Division of Examinations at the U.S. Securities and Exchange Commission and Vice President & Counsel at BlackRock with a focus on derivatives, prime brokerage, and securities finance transactions.
Bill Hinman is currently an advisory partner at a16z crypto, as well as a senior advisor to the global law firm of Simpson Thacher and Bartlett, LLP. From 2017– 2020, Bill served as the Director of the Securities and Exchange Commission’s Division of Corporation Finance.
3. Let staking flourish in the U.S.
by Ji Kim and Alison Mangiero
Staking — which allows users to participate in maintaining and securing certain blockchain networks — has the potential to be revolutionary. Here are five steps the SEC can take to ensure that staking will thrive.
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The U.S. should be leading in innovation focused on how to make these [financial] rails more efficient, secure, and accessible.
Ji Kim is the President and Acting CEO of the Crypto Council for Innovation. Previously, he served as the group’s Chief Legal & Policy Officer and has 15 years of experience advising tech companies as an attorney and policy executive.
Alison Mangiero is Executive Director of the Proof Of Stake Alliance, a project within the Crypto Council for Innovation that advocates for clear and forward-thinking public policies that foster innovation in the staking industry. Previously, she founded the Tocqueville Group, an entity that created open-source software and other public goods for the blockchain network Tezos.
4. End the era of mass financial surveillance
by Grant Rabenn
The Bank Secrecy Act of 1970 created a massive repository of people’s financial records — the FinCEN Database — which puts our sensitive personal data at risk. Blockchains offer a better way forward.
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The [Bank Secrecy Act] has spawned a massive regulatory-industrial complex that requires American financial institutions to conduct daily surveillance on their customers.
Grant Rabenn is Head of International Legal Regulatory, APAC and Americas, for Coinbase. Before joining Coinbase, Grant served for a decade as federal prosecutor specializing in money laundering and cybercrime cases, and led some of the government’s earliest investigations involving cryptocurrency.
5. Anyone can get debanked. DeFi is a critical safety net.
by Katherine Minarik
What happens when you lose control of your family’s main bank account — without any explanation or recourse? Self-custodying crypto assets can provide a lifeline when traditional finance fails you.
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The bank had frozen all of our accounts indefinitely. Our banker was not allowed to tell us anything else. Not even if or how or when we might get our money back… It was terrifying.
Katherine Minarik is the Chief Legal Officer at Uniswap Labs. Previously she served as Vice President and Deputy General Counsel at Coinbase, where she oversaw global litigation.
6. It’s time to bring assets onchain
by Jenny Cieplak
“Tokenization” is a way of digitizing asset records, usually on a blockchain — and the practice could greatly modernize financial infrastructure. If the SEC stops arbitrarily barring them from moving onchain, traditional finance firms could reap the benefits.
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Theoretically, this should have opened the door to using the latest and most sophisticated technologies available — including blockchains and distributed ledgers.
Jenny Cieplak is a partner at Latham & Watkins LLP who advises fintech and financial services clients on the development and deployment of new technologies. Her practice converges at the intersection of industry regulation, emerging technology, and financial services.
7. Why the Department of Justice’s actions against DeFi are a wreck
by Miller Whitehouse-Levine and Amanda Tuminelli
The central question from which all other policy and legal questions must flow is: Who is in control? Some prosecutions of DeFi protocols rest on faulty assumptions about who is exercising control, and what level of control they have, causing unnecessary harm to blockchain development.
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It wouldn’t make sense to hold carmakers responsible for the bad driving of their vehicles’ users, just as it wouldn’t make sense to impose car manufacturing obligations on drivers themselves.
Miller Whitehouse-Levine is CEO of the DeFi Education Fund. Previously, he led the Blockchain Association’s policy operation and worked at Goldstein Policy Solutions on a range of public policy issues, including crypto.
Amanda Tuminelli is Chief Legal Officer at the DeFi Education Fund where she leads impact litigation and policy efforts. Previously, she was a lawyer at Kobre & Kim, where she defended clients against criminal and regulatory investigations, government enforcement actions, and large-scale litigation, particularly in the crypto and blockchain space.
8. Why we need decentralized stablecoins
by Luca Prosperi
Centralized stablecoins have become pillars of DeFi, but they rely on traditional financial intermediaries. Decentralized stablecoins can serve as reliable, efficient, and trustless systems that reduce the need for custodial financial intermediation.
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This world of so-called decentralized stablecoins stands to revolutionize not only the way we create money but, really, the whole financial intermediation stack.
Luca Prosperi is Cofounder and CEO at M^0, a project working on decentralized stablecoin infrastrcuture. Previously, he led Lending Oversight at the DeFi project MakerDAO and he publishes research at Dirt Roads.
9. Rethinking SEC rulemaking: Why crypto needs its own rules
by Scott Walker
It doesn’t always make sense to apply rules created for traditional securities markets to crypto, but the SEC has behaved as if it does. Now, there’s an opportunity for the Commission to adopt a bespoke approach to rulemaking that will help blockchain technology thrive while protecting investors and consumers.
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The SEC has frequently been criticized for its crypto-related “regulation by enforcement,” but what’s less appreciated is how its “rulemaking by extension” — taking rules developed for other markets or products and applying them wholesale to new areas of technology — has been equally counterproductive.
Scott Walker is Chief Compliance Officer at Andreessen Horowitz. Previously, he was the Senior Specialist for Digital Assets and Blockchain Technology in the Division of Examinations at the U.S. Securities and Exchange Commission and Vice President & Counsel at BlackRock with a focus on derivatives, prime brokerage, and securities finance transactions.
10. How the U.S. can benefit from effective crypto tax policy
by David Kerr
Given the complexity of the tax code and innovative organizational structures essential to decentralized systems, it is no surprise that policymakers have struggled to effectively establish clear rules regarding the reporting requirements and tax treatment of digital assets. However, this legislative session provides a historic opportunity to reclaim leadership in a technology that’s reshaping global finance, as well as the future of the internet.
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Will America write the playbook for the 21st-century internet, or watch from the sidelines as others reap the rewards?
David Kerr is the Principal of Cowrie LLC, where he uses 10 years of experience in tax strategy, financial accounting, and risk advisory in the industries of gaming, telecommunications, and technology-driven online sales platforms to assist clients with risk mitigation strategies on developing web3 issues.
11. Should the United States implement a Bitcoin strategic reserve?
by Christian Catalini
The recently proposed bitcoin strategic reserve is a great first step — but it’s only that, a first step. Another opportunity exists: to use bitcoin to connect conflicting parts of the global financial system while maintaining the preeminence of the United States.
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But the real opportunity isn’t in simply stockpiling Bitcoin; it’s in shaping its integration into the global financial system in a way that reinforces U.S. economic leadership rather than undermining it.
Christian Catalini is the co-founder of Lightspark and the MIT Cryptoeconomics Lab.
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