Coin Center’s Top Policy Priorities for 2025

Recently we published our analysis of the changing crypto policy landscape following the elections. Now we’d like to offer you a list of our top outstanding policy issues and potential solutions that policymakers can implement to protect and support open blockchain networks and the Americans who develop and use them. Apart from these legislative and administrative fixes Coin Center is also pursuing solutions in the courts where appropriate.

Stop unjust prosecutions of non-custodial software developers

The Department of Justice is targeting software developers with unlicensed money transmission prosecutions even though the relevant federal regulator, FINCEN, has been clear for years that non-custodial developers do not need a license. Here is our in-depth analysis of the relevant prosecutions, and a look at why the district court in one of them is headed down the wrong road.

Solution: The Blockchain Regulatory Certainty Act codifies FinCEN’s longstanding guidance in legislation such that non-custodial developers clearly do not need to register or license under federal or state law. Additionally, the DoJ should reevaluate charges against those currently being prosecuted.

Stop the misuse of sanctions laws to block Americans from domestic transactions

The Office of Foreign Asset Control (OFAC) sanctioned Tornado Cash and, in so doing, included smart contract addresses that are not in the control of any sanctioned foreign person. The software at those contracts was used by Americans to protect their own privacy and to make donations privately to legitimate non-profit and charitable organizations. After the sanctions, those wholly domestic and legitimate uses are illegal. Not only is this action unconstitutional and in excess of OFAC’s statutory power, but it also creates a precedent that OFAC could use at any moment to ban usage of any autonomous protocol – even Bitcoin itself. The Fifth Circuit Court of Appeals has found the sanctioning of those smart contracts to be outside OFAC’s statutory authority; the Treasury has, however, lobbied Congress to explicitly grant them this power. We’ve published an in-depth analysis of the sanctions here.

Solution: OFAC should rescind sanctions against uncontrolled smart contracts, and Congress should deny any requests to expand sanctions authority to cover software or smart contracts.

Impact Litigation: Our lawsuit in the Eleventh Circuit and the Van Loon lawsuit in the Fifth Circuit address these questions and call for a nationwide injunction on the sanctioning of immutable smart contracts.

Protect Americans holding their own crypto

Many Americans hold their own crypto without the use of an intermediary, which we’ve argued is good for their personal autonomy and privacy. Some existing authorities could allow regulators to ban non-intermediated transactions or subject individuals making their own transactions to surveillance obligations.

Solution: The Keep Your Coins Act would forbid the federal government from banning or regulating self-custody.

Sensible tax reform for American crypto users

Americans who make purchases using crypto must calculate and pay capital gains tax even for small purchases like a cup of coffee (or, more likely, transaction fees paid to miners). This is not the case with small purchases made in foreign currency. Cryptocurrency networks also frequently involve tiny transactions that can be worth fractions of a penny. Under IRS guidelines, every taxpayer must record and report their gain or loss on every crypto transaction, no matter how small. This policy does not generate meaningful revenue and creates substantial barriers to innovation.

Solution: The Virtual Currency Tax Fairness Act extends the existing foreign currency tax exemption for low-value day-to-day transactions to cryptocurrencies.

Equal tax treatment for block rewards

Americans mining or validating blockchain transactions are taxed for income when they produce block rewards. This is not the case for other newly created property, e.g. crops grown on a farmer’s field. We have an in-depth report detailing why the current IRS policy makes no sense.

Solution: The Providing Tax Clarity for Digital Assets Act clarifies that taxes on block rewards are due only upon disposition of the newly created coins, not upon receipt.

Impact Litigation: We are supporting Joshua Jarrett’s lawsuit in the Sixth Circuit. Jarrett is asking the IRS for a refund of his block reward taxes, arguing that new property should only ever be taxed when sold, not when created.

Repeal and fix harmful crypto tax requirements

The Infrastructure Investment and Jobs Act created unconstitutional and anti-innovation tax requirements for crypto entities and individuals as an attempt to pay for the cost of the legislation. These new requirements would not increase revenue and are impossible for many to comply with. Congress should repeal amendments to Section 6050I of the tax code that require that recipients of crypto transactions of $10,000 or more collect, verify, and report to the IRS personal information about the sender without a warrant. It should also reinforce that “brokers” under the tax code do not include non-custodial entities like software developers or autonomous software.

Solution: The Keep Innovation in America Act would repeal and fix these harmful provisions.

Impact Litigation: Our lawsuit in the Sixth Circuit argues that 6050I reporting obligations are unconstitutional and asks the court to set aside those requirements.

Clarify securities and commodities law

Token issuance and secondary sales are subject to confusing and overlapping regulatory authority from the SEC and CFTC. Tokens powered by open source software and open consensus mechanisms are not securities and should not be regulated as such. The division between securities and commodities regulation and the cryptocurrency space should be clarified and codified so it cannot be changed by regulatory fiat.

Solution: Congress should pass a comprehensive reform addressing these questions. Options include the Securities Clarity Act and the Financial Innovation and Technology for the 21st Century Act.