Will non-fraud cases fall under new SEC chairman? Insights from Amanda Tuminelli

In the Thinking Crypto Podcast, Amanda Tuminelli, Chief Legal Officer of the Defy Education Fund, discusses the IRS and Treasury's recent digital asset transactions. The IRS on Dec. 27 finalized tax reporting rules for Diffie industry participants, which they argue are too broad to be considered brokers within the statutory definition. They filed a lawsuit in federal court against the Blockchain Association and the Tech Texas Blockchain Council to defend their opposition to the law.

Can it be pushed?

TLDR defines a broker as a person who performs the transfer of digital assets on behalf of another person for a monetary consideration. However, the IRS says front-ends are not protected and are helping the consumer complete the transaction. The IRS' logic is that any service that executes a transaction, regardless of the statutory definition, can be considered a broker.

She said the IRS law was intended to take effect in 2025, but is expected to be forward-looking and not impose reporting obligations until Jan. 1, 2027.

But, with the upcoming pro-choice administration, she expects the law could be rolled back or reversed. Congress can exercise its ability to review and veto legislation under the Congressional Review Act, ensuring that it does not take effect before the expiration date.

A bright future with the Trump administration

Tumley also discusses the election of pro-crypto President Donald Trump, who is expected to take the crypto industry seriously. Another significant factor is Gary Gensler's appointment of Paul Atkins, who is known for his hostile approach to crypto. In addition, there are expectations that the new chairman of the SEC will focus on fair rules to avoid some non-fraud cases and to avoid the need for small cases.

In particular, Amanda expects a change in the leadership of the SEC under the new chairman, Paul Atkins, which will lead to more favorable settlements or clearer rules for crypto businesses. She also explores the DOJ's approach to developers, particularly in the Tornado Cash case, citing concerns about excessive criminal liability for creating software tools used by bad actors.

Overall, Amanda is optimistic about the potential for positive change in 2025, hoping for greater regulatory transparency and less litigation for the crypto industry.