Trump's return to Washington kicks off flurry of crypto-related activity, IRS challenges and focus on crypto debanking The next few days and weeks are shaping up to be a whirlwind as the Trump administration returns to Washington, D.C. with plans to issue digital asset-related executive orders and as lawmakers are set to focus on crypto debanking. Multiple crypto organizations are also hosting parties in Washington over the next week to embrace the incoming administration and lawmakers. BTC Inc. and Stand with Crypto are hosting the Inaugural Crypto Ball on Friday, where partygoers can "enjoy cocktails and hors d'oeuvres" while celebrating Trump's inauguration. Coinbase, Solana, MetaMask and Robinhood Crypto are sponsoring the event, according to its website. The week of Trump's inauguration, The Digital Chamber and the Constellation Network are hosting a "Crypto Welcome: The 119th Congress Kickoff." After the parties wrap up, expect a flood of hearings, executive orders and nominations involving crypto. Here's how the first part of 2025 is likely to shake out: New challenges First up, lawmakers will likely challenge a controversial tax rule in the coming days that requires brokers in decentralized finance to report on gross proceeds from digital asset sales. The Internal Revenue Service finalized that rule in late December and received pushback from some in the crypto industry who argue that crypto differs from traditional assets as it's not always obvious in DeFi who or what entity would collect and disseminate user data. In a letter to the Treasury in December, some lawmakers slammed the ruling, calling it an "attack on digital assets. " There will be an update from Congress this week on that, likely a resolution under the Congressional Review Act to overturn the rule, said Ron Hammond, senior director of government relations at the Blockchain Association, in an interview with The Block. The Congressional Review Act, or CRA, was enacted in 1996 and can be used by lawmakers to "overturn certain federal agency actions," according to the Congressional Research Service. That process was used last year in an attempt to overturn the U.S. Securities and Exchange Commission's Staff Accounting Bulletin 121, or SAB 121, and was later vetoed by President Joe Biden. That bulletin requires firms that custody cryptocurrencies to record their customers' crypto holdings as liabilities on their balance sheets, and brought concerns among those in the crypto industry. Executive orders Trump is poised to issue executive orders on his first day that could include creating a crypto council and ensuring that firms have access to banks, according to Reuters. The Washington Post reported on Monday that Trump could also issue executive orders that encompass repealing the U.S. Securities and Exchange Commission's controversial crypto accounting guidance, SAB 121. It is unclear whether a crypto executive order will come to fruition on Jan. 20, the day of Trump's inauguration, or within the first week, Hammond said. That executive order is likely to include the establishment of a crypto council that could have anywhere between 10 and 100 members. Those members will presumably be crypto executives, but those decisions will be up to the firms to pick who will represent them in the council, Hammond said. "It's unclear at the moment what that's going to look like, but the EO will be important for that," he said. Hearings With both the Senate and the House having a Republican majority, crypto is expected to come into focus as lawmakers gear up for hearings on crypto debanking, stablecoins and regulating the industry at large. Debanking is likely to be the hot topic, Hammond said. Some in the crypto industry have accused the Biden administration of blocking crypto from banking services, labeling the move "Operation Choke Point 2.0. " This moniker alludes to Operation Choke Point 1.0, a 2013 U.S. Department of Justice Initiative that sought to limit banking services for industries considered high-risk for fraud and money laundering, including payday lenders and firearm dealers. Federal agencies asserted that they do not discourage financial institutions from working with crypto. In the 2024 Risk Review report, the Federal Deposit Insurance Corporation and other agencies "continue to emphasize that banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type." Newly picked House Financial Services Chair French Hill (R-Ark.) has vowed to investigate debanking and said his committee would take a "strong position." Hill plans to focus on crypto debanking, market structure and stablecoins, a source familiar with the House Financial Services Committee told The Block. Hearings around stablecoin and crypto market structure bills could start to crop up closer to March, Hammond said. Senate Banking Committee Chair Tim Scott (R-S.C.) laid out his committee's priorities on Wednesday. These include bolstering access to capital and creating a regulatory framework for digital assets. "The committee will also foster an open-minded environment for new, innovative financial technologies and digital asset products, like stablecoins, that promote financial inclusivity," Scott said in a statement. Both the House Financial Services Committee and the Senate Banking Committee are integral in starting hearings, discussions and potential votes on future crypto legislation. Nominations Nominations for Trump's picks to lead key agencies are starting this week and will continue garnering attention. Hedge fund manager Scott Bessent's nomination hearing to become the U.S. Secretary of Treasury is slated for Thursday. Bessent, tapped by Trump in late November, has spoken positively about crypto. Bessent told Fox Business in July that he was "excited about the president's embrace of crypto." Trump later picked crypto-friendly former regulator Paul Atkins to lead the SEC. The agency is likely to look very different following a shakeup in leadership and the departure of Chair Gary Gensler, who had a tense relationship with key players in the crypto industry. The announcement of Atkins' nomination hearing could come in the next few weeks and then take place in March, depending on floor time, Hammond said. "It's kind of hard to predict," Hammond said
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Trump's return to Washington kicks off flurry of crypto-related activity, IRS challenges and focus on crypto debanking

The next few days and weeks are shaping up to be a whirlwind as the Trump administration returns to Washington, D.C. with plans to issue digital asset-related executive orders and as lawmakers are set to focus on crypto debanking.

Multiple crypto organizations are also hosting parties in Washington over the next week to embrace the incoming administration and lawmakers. BTC Inc. and Stand with Crypto are hosting the Inaugural Crypto Ball on Friday, where partygoers can "enjoy cocktails and hors d'oeuvres" while celebrating Trump's inauguration. Coinbase, Solana, MetaMask and Robinhood Crypto are sponsoring the event, according to its website.

The week of Trump's inauguration, The Digital Chamber and the Constellation Network are hosting a "Crypto Welcome: The 119th Congress Kickoff."

After the parties wrap up, expect a flood of hearings, executive orders and nominations involving crypto.

Here's how the first part of 2025 is likely to shake out:

New challenges

First up, lawmakers will likely challenge a controversial tax rule in the coming days that requires brokers in decentralized finance to report on gross proceeds from digital asset sales. The Internal Revenue Service finalized that rule in late December and received pushback from some in the crypto industry who argue that crypto differs from traditional assets as it's not always obvious in DeFi who or what entity would collect and disseminate user data.

In a letter to the Treasury in December, some lawmakers slammed the ruling, calling it an "attack on digital assets. "

There will be an update from Congress this week on that, likely a resolution under the Congressional Review Act to overturn the rule, said Ron Hammond, senior director of government relations at the Blockchain Association, in an interview with The Block. The Congressional Review Act, or CRA, was enacted in 1996 and can be used by lawmakers to "overturn certain federal agency actions," according to the Congressional Research Service.

That process was used last year in an attempt to overturn the U.S. Securities and Exchange Commission's Staff Accounting Bulletin 121, or SAB 121, and was later vetoed by President Joe Biden. That bulletin requires firms that custody cryptocurrencies to record their customers' crypto holdings as liabilities on their balance sheets, and brought concerns among those in the crypto industry.

Executive orders

Trump is poised to issue executive orders on his first day that could include creating a crypto council and ensuring that firms have access to banks, according to Reuters. The Washington Post reported on Monday that Trump could also issue executive orders that encompass repealing the U.S. Securities and Exchange Commission's controversial crypto accounting guidance, SAB 121.

It is unclear whether a crypto executive order will come to fruition on Jan. 20, the day of Trump's inauguration, or within the first week, Hammond said.

That executive order is likely to include the establishment of a crypto council that could have anywhere between 10 and 100 members. Those members will presumably be crypto executives, but those decisions will be up to the firms to pick who will represent them in the council, Hammond said.

"It's unclear at the moment what that's going to look like, but the EO will be important for that," he said.

Hearings

With both the Senate and the House having a Republican majority, crypto is expected to come into focus as lawmakers gear up for hearings on crypto debanking, stablecoins and regulating the industry at large.

Debanking is likely to be the hot topic, Hammond said.

Some in the crypto industry have accused the Biden administration of blocking crypto from banking services, labeling the move "Operation Choke Point 2.0. " This moniker alludes to Operation Choke Point 1.0, a 2013 U.S. Department of Justice Initiative that sought to limit banking services for industries considered high-risk for fraud and money laundering, including payday lenders and firearm dealers.

Federal agencies asserted that they do not discourage financial institutions from working with crypto. In the 2024 Risk Review report, the Federal Deposit Insurance Corporation and other agencies "continue to emphasize that banking organizations are neither prohibited nor discouraged from providing banking services to customers of any specific class or type."

Newly picked House Financial Services Chair French Hill (R-Ark.) has vowed to investigate debanking and said his committee would take a "strong position." Hill plans to focus on crypto debanking, market structure and stablecoins, a source familiar with the House Financial Services Committee told The Block.

Hearings around stablecoin and crypto market structure bills could start to crop up closer to March, Hammond said.

Senate Banking Committee Chair Tim Scott (R-S.C.) laid out his committee's priorities on Wednesday. These include bolstering access to capital and creating a regulatory framework for digital assets.

"The committee will also foster an open-minded environment for new, innovative financial technologies and digital asset products, like stablecoins, that promote financial inclusivity," Scott said in a statement.

Both the House Financial Services Committee and the Senate Banking Committee are integral in starting hearings, discussions and potential votes on future crypto legislation.

Nominations

Nominations for Trump's picks to lead key agencies are starting this week and will continue garnering attention.

Hedge fund manager Scott Bessent's nomination hearing to become the U.S. Secretary of Treasury is slated for Thursday. Bessent, tapped by Trump in late November, has spoken positively about crypto. Bessent told Fox Business in July that he was "excited about the president's embrace of crypto."

Trump later picked crypto-friendly former regulator Paul Atkins to lead the SEC. The agency is likely to look very different following a shakeup in leadership and the departure of Chair Gary Gensler, who had a tense relationship with key players in the crypto industry.

The announcement of Atkins' nomination hearing could come in the next few weeks and then take place in March, depending on floor time, Hammond said.

"It's kind of hard to predict," Hammond said