- Crypto attorney John Deaton has outlined focus areas for the White House Crypto Council
- Deaton’s most important focus area is the SAB 121 repeal, which integrates crypto into the financial ecosystem.
Crypto Attorney John Deaton has highlighted some key goals for the Trump administration’s Crypto Council. Deaton agrees that repealing the SEC’s (Security and Exchange Commission’s) SAB (Staff Accounting Bulletin) 121 guideline remains the most important priority that will drive the price of Bitcoin and crypto generally.
SAB 121 Repeal Imminent
In his post, Deaton pointed out that repealing SAB 121 is “the most important first step” for the White House Crypto Council. He described it as “foundational” as it enables the total integration of crypto with the traditional financial ecosystem.
The crypto attorney’s post was in response to Blockchain Investment Manager, Eric Weiss’ opinion that the impending repeal of SAB 121 is the “single biggest catalyst” for crypto and Bitcoin price surge. The reason, stated Weiss, is because “Banks ability to custody crypto means you’ll be able to borrow against your crypto.”
Using a mortgage analogy, Weiss explained that bank custody of crypto increases utility and price just as mortgages increase real estate prices as people pay over time, not in cash.
The SEC’s SAB 121 guideline mandates financial institutions offering crypto custody to follow strict and practically untenable accounting standards. These strict requirements are widely viewed as a ploy to discourage banks from providing crypto custody services to customers.
Attempts to repeal SAB 121 fell flat last year after President Biden vetoed the joint Congressional resolution against the guideline. However, Trump’s crypto Czar and his team have reportedly begun the underground work to undo the infamous veto.
Establish Strategic Bitcoin Reserve by Executive Order
Deaton expects President Trump to create a de facto Strategic Bitcoin Reserve (SBR) by Executive Order. The reason is that an actual SBR as proposed by Senator Cynthia Lunmis will require a Congressional Act, which might take some time.
“He could order the creation of a cryptographic escrow locking up the 200K BTC, currently owned by the USG, for 20 years. This serves as a de facto SBR – an asset owned by the USG, with no intent to sell.”
President Trump has yet to make any public mention of an SBR or an executive order to that effect since his inauguration. However, crypto leaders are optimistic about an SBR announcement, especially since states have initiated similar legislation.
Scrap Capital Gains Taxes On Crypto
Attorney Deaton also calls on the Crypto Council to allow people to pay taxes with crypto “without incurring a capital gains tax.” In his proposition, a small fraction of the crypto taxes could feed the Strategic Reserve via a “cryptographic escrow.”
He advocates for a review of the prevalent crypto tax policy in which the IRS (Internal Revenue Service) treats crypto ad property. In essence, changing the tax classification of crypto to allow people to pay for purchases or use it to make down payments without incurring capital gains taxes would be “a game changer.”
