The US crypto policy remains worrisome, even if there is potential for a pro-crypto Trump administration. Coin Center, the cryptocurrency advocacy non-profit group, raised several concerns on this front. Research director Van Valkenburgh in a Nov. 21 blog entry identified three of the most pressing threats that will likely affect crypto developers and users going into 2025, describing them as surveillance-related issues.
This would, by the Section 6050I crypto reporting requirement, threaten to stick one with the obligation of warrantless reporting into any transaction involving a value over USD 10,000. At this point, argues Coin Center, such a requirement would collide with constitutional rights and limit the privacy of the users in crypto activities.
In fact, the greater threats are part of the cases under which there is ongoing litigation against Tornado Cash and Samourai Wallet on sanctions, with criminal charges against their developers for "unlicensed money transmission." Coin Center worries that such cases are a growing threat of great concern in setting up a chilling precedent over innovation in non-custodial crypto services.
While a Trump administration may supply a more friendly regulatory environment generally including, perhaps, changes at the SEC and Treasury Valkenburgh is still cautious For one thing, entrenched policies like AML and Department of Justice prosecutions will still be there.
Despite the risks involved, the group still clings to hope that a more balanced approach - one in which overreaching measures of surveillance do not interfere with criminal activity but severely hamper legitimate innovation and development- will be actualized. This advocacy group argues that "crypto innovators and technologies must not be driven out of the US" because "what's ultimately at stake is the potential for Americans to fully enjoy the benefits of this emerging industry".
SEC Nets Record USD 8.2 Billion in 2024 Enforcement
The U.S. Securities and Exchange Commission collected its largest financial remedies ever in fiscal year 2024, collecting USD 8.2 billion. More than half comes from a USD 4.5 billion settlement with Terraform Labs and former CEO Do Kwon related to fraud over the 2022 collapse of Terraform's blockchain ecosystem-a landmark in SEC enforcement efforts - according to officials.
Without the Terraform penalty, total SEC financial remedies would have come out to USD 3.72 billion, the smallest on record since 2013. The total includes USD 2.1 billion in fines and USD 6.1 billion in disgorgement - the latter a record for giving back illegal gains to investors.
While this is the first time the SEC has reached such a level of income, its enforcement action is anything but flush with excitement; as of 2024, it stands at 583 cases, down from 784 from last year. Crypto-related actions peaked at 46 in 2023 but dropped to just 11 in 2024. Still, penalties from crypto cases rose over 3,000 per cent with Terraform's settlement.
Incoming SEC Chair Gary Gensler is expected to step down in January 2025; however, while he was still around he had made it clear that the agency is committed to accountability when announcing: "The Division of Enforcement is a steadfast cop on the beat." Still, the crypto industry perceives a change of terms of engagement with President-elect Donald Trump who said he would reduce the level of enforcement. Legal watchers finally sense that peaceful resolution, though swift delivery, of some of the outstanding crypto cases is now in the offing for the first time with the new administration voted into office.
Logan Paul Accused of Hiding Crypto Endorsements
The first one is on memecoin Elongate-an anonymous wallet linked to the owner of the altcoin-who had reportedly purchased USD 160,000 worth of tokens prior to his promotion. Incendiary evidence shared with BBC puts social media influencer Logan Paul on the hot seat as the outlet digs into claims that he was promoting unknown cryptos.
The investigation reveals that the crypto influencer had been utilizing unknown crypto wallets from where he reaped profits because he was marketing the tokens to millions of his followers. For his own sake, the wallet liquidated the assets, making off with profits of USD 120,000. Something similar to this can also be seen in his NFT project CryptoZoo, which has investors suing, alleging that it failed to deliver a million-dollar promised feature. Paul's lawyers deny wrongdoing in the case by saying his endorsements were proper while cautioning against defamatory claims.
The case becomes much more complicated when it goes to the case of defense by Paul, who attempted to resolve the CryptoZoo debacle through a buyback program. Refunds were paid back to investors as consideration for their rights to pursue claims. Accountability has always been questioned in such cases.
