After years of waiting for the government to put in place regulations to govern the industry, crypto and blockchain industry leaders have come together to establish a lobbying group whose goal will be to push for the implementation of these policies. Based in Washington D.C, the group brings together some of the biggest names in the industry, including startups like Coinbase and crypto-focused VC firms like Polychain Capital. Known as The Blockchain Association, the group aims to become the voice of the industry in D.C and to work with the regulators from the inside, helping shed light on the developments in the industry and influencing the policy-making process.
The Inside Man
The crypto industry has for a long time been perceived as anti-government, perhaps largely because of its promise of taking the power away from a few entities and giving it to the people. However, many industry leaders have continuously sought to involve the government in their operations and have called for the implementation of regulations to govern the industry. The Blockchain Association is the latest effort by the industry to work with the government, with the group hiring a former Senate aide, Kristin Smith to lead the charge. Smith was the aide to former Maine Senator, Olympia Snowe, before taking over the blockchain lobbying duties for the bitcoin-friendly online retailer, Overstock.com.
As revealed by The Washington Post on September 11, some of the founding members of the new lobby group are Coinbase, fintech startup Circle and crypto-focused VC firms Digital Currency Group and Polychain Capital. Protocol Labs, the company behind decentralized storage startup Filecoin is also among the founding members.
The industry is not looking to circumvent the set regulations, Coinbase’s Mike Lempres told the Post. Instead, it’s been awaiting regulations for the longest time to weed out the scammers and promote healthy competition, Lempres, who is the chief legal and risk officer stated.
The Blockchain Association is an effort to get the preeminent companies in the space together so policymakers know they’re hearing from companies that welcome regulation when it’s appropriate. We’re not companies looking to game the system, but trying to develop a legal and regulatory system that’ll stand the test of time.
The group’s first priority will be working with regulators and lawmakers to establish regulations that will govern the application of the U.S tax laws to cryptos. This has been one of the most contentious issues in the industry, with the IRS’s current application of the tax law being deemed prohibitive by many crypto users. The contention hasn’t been made any better by the different regulatory authorities that have issued different classifications of cryptos; the IRS as a property, the SEC as a security and the Financial Crimes Enforcement Network as a currency.
Earlier this year, the Winklevoss twins announced an industry initiative to self-regulate which was officially launched a month ago. Known as the Virtual Commodities Association, the body has picked up new members over the last month as more crypto companies seek to become compliant with the set laws and to become actively involved in the formulation of new ones. Among the body’s founding members are crypto exchanges Bitstamp, Bittrex and Bitflyer USA.