FML partner Justin Wilcox was quoted in an article in Accounting Today about the the changing cryptocurrency landscape and what to expect under the Trump administration. He was the first expert cited in the article, which began by mentioning the launch of the meme coins of President Donald Trump ($TRUMP) and First Lady Melania Trump ($MELANIA).
Industry experts were fairly convinced prior to the mintings that the Trump administration would usher in a more crypto-friendly regulatory environment, and are now more certain of their predictions.
Justin Wilcox, tax and advisory services partner and cryptocurrency practice lead at Connecticut-based accounting firm Fiondella, Milone & LaSaracina LLP, said the coins “signal a crypto-friendly administration versus the prior four years under Biden and [former Securities and Exchange Commission Chair] Gary Gensler.”
“The SEC under the Trump presidency is already establishing a crypto task force, which will focus on a regulatory framework for digital assets,” Wilcox said. “This framework will hopefully result in clear guidelines for founders of cryptocurrencies to understand the relevant legal implications ahead of time.”
Expectations also include “legislation [that] may be pushed forward to establish a ‘strategic reserve’ for bitcoin and potentially other digital assets,” he said.
Justin had some additional thoughts on the challenges brokers and taxpayers will face now that the IRS has released its final regulations on DeFi tax reporting.
The DeFi reporting is a complex web and will likely continue to evolve faster than the IRS can issue regulations or update its policies. Some examples include liquidity pools, liquid staking, collateralized debt and, down the road, the taxation of AI agents (e.g. bots) which may hold cryptocurrencies that are not accessible to a human (even the creators).
Brokers are behind on the implementation of IRS regulations, which resulted in the IRS delaying implementation of the 1099 reporting requirement from 2025 to 2026. Users of cryptocurrency are expected to revamp their method of tracking cost basis for 2025, if they previously tracked basis globally, to a wallet-by-wallet (potential misnomer for “public key pair” as a wallet is a user interface).
The challenge is the disconnect between centralized exchange crypto and DeFi crypto transactions will not go away as a result of these rules. Most heavy crypto users utilize centralized exchanges as a U.S. dollar purchase/sale ramp, and move their cryptocurrency to on-chain addresses.
As for the benefits that crypto may create for the accounting profession as a whole? The accounting records on a public blockchain serve as a permanent, immutable record of history of transactions in a public key account.
Government accounting would benefit greatly from having every dollar in a budget accounted for on a dollar based blockchain ledger. We could see where money really goes.
