More than 65 cryptocurrency organizations have called on President Donald Trump to bypass Congress and direct federal agencies to immediately clarify digital asset regulations, as the industry grows impatient with the pace of legislative reform and heightened legal uncertainty around privacy technologies threatens innovation.
In a letter sent Thursday to the White House, major industry players including Coinbase, Uniswap Labs, the Blockchain Association, and the Solana Foundation outlined specific actions the Securities and Exchange Commission, Commodity Futures Trading Commission, Treasury Department, and Justice Department can take without new legislation.
The coordinated push aims to transform Trump's pro-crypto campaign promises into concrete agency action through executive authority.
The letter arrives as the SEC's Crypto Task Force prepares to host a public roundtable on financial surveillance and privacy, highlighting how privacy concerns have moved to the forefront of the regulatory debate following recent prosecutions of developers working on privacy-enhancing technologies.
Industry Seeks Executive Action on Multiple Fronts
The coalition letter, led by the Solana Policy Institute, emphasizes that agencies can deliver "immediate steps" to provide regulatory clarity while Congress continues its slower legislative process. The coordinated effort represents one of the most comprehensive policy pushes from the crypto industry since Trump's election victory.
On tax policy, signatories urge the Treasury Department to issue guidance treating staking and mining rewards as "self-created property taxed upon disposition" rather than immediately taxable income - a change that would significantly reduce compliance burdens for millions of crypto users. The letter also requests clarification that bridging, wrapping, and cross-chain transactions constitute non-taxable events, along with de minimis tax rules excluding gains on purchases up to $600.
For regulatory clarity, the industry wants the SEC's Crypto Task Force to provide interim guidance clarifying that developers of "source-available, permissionless protocols" receive protection from enforcement actions during ongoing rulemaking processes. This safe harbor provision has become increasingly urgent following high-profile prosecutions of privacy software developers.
On DeFi protection, organizations request updated guidance from the Financial Crimes Enforcement Network (FinCEN) confirming the Bank Secrecy Act doesn't apply to non-custodial blockchain software - consistent with the agency's 2019 stance on virtual currencies but contradicted by recent enforcement actions.
Controversial Call to Drop Tornado Cash Prosecution
Perhaps most controversially, the letter urges the Justice Department to dismiss charges against Tornado Cash developer Roman Storm, who was found guilty of conspiracy to operate an unlicensed money transmitter. The industry argues Storm's work on Tornado Cash "represents the publication of open-source software - not a financial crime."
The call comes as the crypto community faces similar concerns over Samourai Wallet developers, who recently received prison sentences for their work on privacy-focused software. These prosecutions have sent shockwaves through the developer community and raised fundamental questions about whether writing privacy-enhancing code constitutes criminal activity.
"Significant outflows from Bitcoin ETFs indicate that institutional players are taking profits off the table," said Przemysław Kral, CEO of European crypto exchange zondacrypto. "Therefore, it is important to recognize the risks. Volatility is high, and the macro environment can change quickly."
Daniel Liu, CEO of Republic Technologies, told reporters he supports the call for clarity but cautioned that "it is far more important that regulators proceed methodically and get it right than move too quickly and risk creating additional confusion." He added that as long as agency actions are clearly defined, he wouldn't expect individual states to challenge or fragment the framework.
SEC Tackles Privacy-Surveillance Balance
The industry's push for regulatory clarity comes as the SEC confronts thorny questions about balancing privacy protections with financial surveillance requirements. The SEC's Crypto Task Force roundtable, led by Commissioner Hester Peirce—known in the crypto community as "Crypto Mom" - brings together panelists developing cutting-edge privacy technologies alongside policymakers grappling with oversight responsibilities.
The roundtable will explore how privacy-focused tools like zero-knowledge proofs, which enable transaction verification without revealing sensitive data, align with existing Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance requirements. The discussion occurs at a critical juncture where regulations on on-chain analysis tools and privacy protection intersect with law enforcement concerns.
"Technology that helps Americans protect their privacy is critically important as it enables people to choose when and with whom to share sensitive data about themselves so they can be protected from bad actors," Peirce stated in announcing the roundtable. "Understanding recent developments in privacy-protecting tools will assist the SEC and other financial regulators as we work on policy solutions in the crypto space."
The roundtable format means it will not result in immediate policy proposals or rulemaking. Rather, it serves as a public consultation designed to gather stakeholder input before the SEC potentially defines formal regulatory guidance - a process that typically influences policy priorities within 6-18 months.
Privacy Technologies Gain Momentum Amid Legal Uncertainty
Recent legal developments have thrust privacy technologies into the spotlight while creating significant uncertainty for developers. The June partial guilty verdict against Storm in the Tornado Cash case and November sentencing of a Samourai Wallet developer have raised fundamental questions about the legal status of privacy-enhancing tools.
Both cases involved non-custodial privacy technologies - software that operates without centralized control - rather than custodial platforms or service providers. Legal specialists tracking digital-asset enforcement say the cases have created ambiguity about how U.S. regulatory and legal frameworks interpret non-custodial systems and open-source development.
The legal pressure hasn't dampened market interest in privacy solutions. Privacy tokens experienced significant price surges beginning in October, with coins like Zcash rallying strongly over recent months. The renewed attention harks back to cryptocurrency's cypherpunk roots - the foundational belief that cryptographic technology should protect digital communication and limit information exposure to outside parties.
"Authoritarians thrive when people have no privacy. When those in charge start being hostile to privacy protections, it is a major red flag," said Naomi Brockwell, founder of the Ludlow Institute, an organization advocating for liberty through technology.
Trump Administration Shows Mixed Signals
The coordinated industry push acknowledges some Trump administration wins, including nullification of the IRS Broker Rule and passage of the GENIUS Act, a regulatory framework for stablecoins. However, the letter argues more can be accomplished through executive action to fulfill Trump's campaign promise to make America "the crypto capital of the world."
The timing is strategic. The letter arrives as Trump's CFTC nominee, Mike Selig, advances toward Senate confirmation, though he declined to commit to expanding agency resources despite anticipated crypto oversight responsibilities during his recent hearing. Meanwhile, proposed Treasury rules regarding international crypto tax reporting reached the White House for review Monday, allowing the IRS to gain information about Americans' foreign crypto accounts through the Crypto-Asset Reporting Framework - a development that has privacy advocates concerned.
The administration launched the SEC's Crypto Task Force on January 21 with Acting Chairman Mark Uyeda, aiming to develop "a comprehensive and clear regulatory framework for crypto assets." The task force represents a philosophical shift from the previous administration's enforcement-heavy approach under former SEC Chair Gary Gensler, who resisted crypto ETFs and filed numerous enforcement cases against industry leaders.
Final thoughts
The convergence of industry demands, regulatory consultations, and ongoing prosecutions represents a critical moment for crypto policy formation. The industry's letter emphasizes that the "roadmap exists" following the President's Working Group Report on Digital Assets released in July, which outlined recommendations for banking, stablecoins, and taxation. Now, organizations argue, agencies must act to cement American leadership.
However, the path forward remains fraught with tension. Excessive monitoring could push users toward "privacy-only" tools and reduce cooperation with regulated actors, while overly permissive rules might compromise consumer protection and investigative effectiveness. How regulators define the responsibility of intermediaries will impact compliance costs, market access, and business models across the industry.
Industry analysts note that public consultations like the SEC roundtable tend to influence regulatory priorities and interpretative guidance within 6-18 months. The quality of contributions gathered and their translatability into operational guidelines will determine whether the current moment produces meaningful regulatory clarity or merely extends the uncertainty that has plagued the sector.
As the crypto industry seeks to capitalize on the Trump administration's pro-innovation stance, the fundamental question remains: Can regulators balance privacy protections with surveillance needs while fostering innovation - or will legal uncertainty continue driving development offshore and chilling domestic innovation?