Will Non-Fraud Cases Be Dropped Under New SEC Chair? Insights from Amanda Tuminelli
In a thoughtful cryptocurrency podcastAmanda Tuminelli, chief legal officer at Defi Education Fund, discusses recent IRS and Treasury rulemaking regarding digital asset transactions. The Internal Revenue Service (IRS) on December 27 finalized tax reporting rules for DeFi industry participants that they believe are too broad to be considered brokers under the statutory definition. They filed suit in federal court against the Blockchain Association and the Texas Tech Blockchain Council to preserve their objections to the rule.
Is there likely to be resistance?
TLDR defines a broker as a person who makes transfers of digital assets on behalf of others for monetary consideration. However, the IRS said the front-end does not host the transaction, but only assists users in completing transactions. The IRS’s logic is that any service that enables a transaction, regardless of the statutory definition, can be considered a broker.
She noted that the IRS rule was originally intended to be implemented in 2025 but is expected to be future-proofed and will not impose reporting obligations until January 1, 2027.
However, with a pro-cryptocurrency government coming into office, she expects the rule may be delayed or withdrawn. Congress can use its ability to review and veto the rule under the Congressional Review Act to ensure that the rule does not take effect before the deadline.
The outlook for the Trump administration is optimistic
Tumeli also discussed the incoming pro-cryptocurrency President Donald Trump, who is expected to take the cryptocurrency industry seriously. Another important factor is the appointment of Paul Atkins, who will replace Gary Gensler, who is known for his hostile attitude towards cryptocurrencies. The SEC under its new chairman is also expected to drop some non-fraud cases and focus on fairness rules to avoid piecemeal litigation.
Notably, Amanda anticipates a shift in SEC leadership under new Chairman Paul Atkins, which could lead to favorable settlements or clearer rules for crypto businesses. She also spoke about the Justice Department’s attitude toward developers, particularly in the case involving Tornado Cash, and expressed concern that criminal liability for creating software tools used by bad actors is too broad.
Overall, Amanda remains cautiously optimistic about the potential for positive change in 2025, hoping for greater regulatory clarity and fewer lawsuits in the crypto industry
