Five years have passed since the inception of the Blockchain Association, the the leading trade association for cryptocurrency in Washington D.C., and during this time Coinbase, Kraken, Ripple and Uniswap have been among its 114 member companies. Despite their shared unwavering mission of promoting the potential of blockchain technology and fighting for the policies that facilitate its success, skepticism tinged with the bitter realities of regulatory decisions coexist.
While the crypto industry and the media at large commend the activities leading to crypto’s growth, recent months have posed significant hurdles to the progress of the industry’s influence. After the fall of the FTX in November, the crypto space experienced a harsh blow that made it difficult to relay its advantages to lawmakers and regulators. Surrounded by phantoms of previous scandals, cryptocurrency’s modest popularity amongst the congress members plummeted. Lawmakers grew increasingly apprehensive regarding monetary contributions from, and voicing support for an industry nonetheless responsible for significant financial losses for many voters.
One might draw a veil of failure over the Blockchain Association given its track record – in its five years of existence, the congress has yet to pass comprehensive cryptocurrency legislation, and the prospects for this happening are dim. Multiple well-considered bills like those proposed by U.S. Senators Cynthia Lummis and Kirsten Gillibrand, and a Republican-backed stablecoin bill have gained momentum, but failed to establish the regulatory clarity Coinbase, Kraken, and Binance (including its U.S. subsidiary) among others, have persistently demanded. Some crypto startups have sought refuge in jurisdictions with more favorable and explicit legal landscapes, illustrating the dissatisfaction with the US regulatory regime.
Reflecting on her organization’s accomplishments, Kristin Smith, who led the Blockchain Association for five years, highlights three pivotal instances. Firstly, their efforts in impeding a proposed FinCEN rule that would require exchanges to gather personal data on self-hosted crypto wallets. Secondly, influencing the crypto tax and reporting requirement in President Joseph Biden’s 2021 infrastructure bill to mitigate its impact. Finally, providing critical legal support to member companies like Ripple, Coinbase, and Grayscale amid SEC actions against them. Those victories have been instrumental in preserving the industry’s status quo rather than fostering its evolution in a favorable direction.
SEC Chair Gary Gensler’s hawkish stance on crypto remains a sore point and an unexpected development in the narrative. However, Smith maintains optimism despite her staunch assessment of Gensler as an industry antagonist. She has faith that time will prove the SEC’s legal framework that considers all digital assets as securities to be defective. Yet, significant obstacles stand in the way – high-profile company failures, including FTX, and a lengthy legal journey likely lie ahead. While remaining aware that legislative progress can be achingly slow, the crypto community nourishes hope that, given another five years, a different reality might await. Crypto lobbyists meanwhile need to exercise humility concerning their “achievements.”
Source: Coindesk
