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Crypto lobby sidelines bitcoin tax reform for stablecoin casino rules

Tuesday, March 17, 2026 · from 3 podcasts, 7 episodes
Bitcoin And | Bitcoin & E…TFTC: A Bitcoin PodcastBitcoin And | Bitcoin & E…Rabbit Hole RecapBitcoin And | Bitcoin & E…Bitcoin And | Bitcoin & E…Bitcoin And | Bitcoin & E…
  • The cryptocurrency lobby led by Coinbase prioritizes market structure for token trading over making bitcoin usable as everyday money through tax reform.
  • Paraguay enacts sweeping financial surveillance requiring annual reporting for crypto transactions over $5,000, with South Korea developing AI-powered tax tracking.
  • The SEC drops charges against a $257 million alleged scammer while pursuing Tornado Cash developers, revealing selective enforcement patterns.

Bitcoin's path to becoming functional money faces sabotage from within.

On TFTC, David Zell detailed how cryptocurrency lobbyists systematically reshuffled legislative priorities. Senator Cynthia Lummis had outlined four key digital asset goals starting with bitcoin reserve strategy and tax reform. The lobby requested they be tackled in reverse order, putting token trading frameworks and stablecoin regulations first.

The de minimis tax exemption has become the litmus test. This reform would eliminate capital gains reporting on small transactions, treating bitcoin like currency. Multiple sources report Coinbase's lobbying team pushing to limit the exemption to stablecoins only, which would preserve bitcoin's status as taxable property. Coinbase denies the claims, but CEO Brian Armstrong hasn't made a definitive public statement.

Meanwhile, Paraguay issued surveillance rules demanding annual reporting for any crypto transaction exceeding $5,000. The scope covers purchases, sales, mining, staking, and even transfers between a person's own wallets. On Bitcoin And, David Bennett called the move "absolutely over the top freaking ridiculous" and "authoritarian." South Korea's National Tax Service is developing an AI-powered platform to monitor digital asset transactions with a 3 billion won budget.

Enforcement shows similar contradictions. The SEC dropped its case against BitClout founder Nader Al-Naji with prejudice, citing evolving crypto regulation. This comes while Tornado Cash developer Roman Storm faces a second trial on money laundering charges that could carry 40 years. Bennett noted the hypocrisy: "Roman, you can just rot in jail, but we're gonna let scammer man go."

Lightning Network data shows billions in monthly volume across millions of transactions, evidence that undercuts arguments that "no one is using bitcoin as money." Block's Miles Suter says if bitcoin just becomes digital gold, "we failed the mission."

The regulatory retreat on scams and the industrial pivot toward surveillance reveal where real pressure is being applied.

David Zell, TFTC:

- The crypto lobby basically came back and said, we think these are all wonderful priorities. - We'd like them in reverse order, please.

BTC MarketsRegulationPaymentsStablecoinsCustody

Entities Mentioned

A16ZCompany
Alex FinnPerson
BasecampProduct
BinanceCompany
Bitcoin Policy InstituteCompany
Cash AppProduct
CoinbaseCompany
Netflixtrending
PolymarketCompany
SAS Miningtrending
search_result blocksTool
TetherCompany
USDCProduct

Source Intelligence

What each podcast actually said

Bitcoin And | Bitcoin & Economic News
Bitcoin And | Bitcoin & Economic News

Milei's Malaise | Bitcoin News • Mar 16

  • The SEC dropped its entire case with prejudice against BitClout founder Nader Al-Naji, who was accused of a $257 million scam, citing the evolving crypto regulatory landscape as the reason.
  • Bitcoin And host David Bennett calls the SEC's dismissal of Al-Naji's case a tactical retreat that spotlights selective enforcement, allowing an accused scammer to walk free while prosecuting privacy tool developers like Tornado Cash's Roman Storm.
  • The SEC cautioned that dropping the Al-Naji case does not set a precedent for other crypto enforcement actions, a move Bennett views as highlighting the regulator's inconsistent application of its own rules.
  • HIVE attributed its strategic pivot away from Sweden to the 'misapplication of existing tax rules' by local authorities, which made its ASIC mining business economically unviable.
  • The HIVE relocation highlights a pressure point where nations can squeeze Bitcoin mining through regulatory harassment while openly welcoming the more energy-intensive AI industry.

Also from this episode:

Mining (1)
  • Public Bitcoin miner HIVE is phasing down operations in Sweden and shifting that capacity to build AI data centers in Canada, citing hostile local tax enforcement and operational uncertainty.
Energy (1)
  • David Bennett points out the hypocrisy in environmental groups remaining silent on AI's massive power consumption after years of campaigning against Bitcoin's energy use.
RegulationMiningETFs

Basel's Basil | Bitcoin Regulation • Mar 13

  • Paraguay enacted a law requiring annual reporting for any cryptocurrency transaction exceeding $5,000, with platforms mandated to report wallet addresses, transaction hashes, and counterparty details. David Bennett called the move "absolutely over the top freaking ridiculous" and "authoritarian."
  • The new Paraguayan law's reporting scope is broad, covering purchases, sales, exchanges, mining, staking, yield farming, airdrops, and transfers between a person's own wallets.
  • David Bennett argues that Paraguay's invasive financial surveillance, while framed as anti-money laundering, is more likely to repel foreign investment than attract it.
  • Paraguay's regulatory push aligns with recommendations from the Financial Action Task Force, which has urged countries toward stringent crypto reporting since 2019.
  • A report from the Global Initiative Against Transnational Organized Crime claims stablecoins like Tether are gaining relevance as a payment method in the illicit Amazon gold trade, particularly in Venezuela for gold smuggled out of Guyana.
  • David Bennett labeled the report linking stablecoins to illicit gold trading as "bullshit," arguing the criminal enterprise has existed for centuries and the narrative aims to tarnish cryptocurrency by association.
  • South Korea's National Tax Service is developing an AI-powered platform to monitor digital asset transactions and identify tax evasion, with a 3 billion won budget.
  • The global regulatory shift is moving beyond legislation toward active, automated enforcement, using advanced technology for comprehensive crypto taxation and oversight.
BTC MarketsRegulationPrivacy

Wholly Unholy Matrimony | Bitcoin News • Mar 12

  • The fight for a Bitcoin de minimis tax exemption is exposing a strategic schism between companies building payment infrastructure, which need Bitcoin treated as money, and those content with its status as a taxable digital asset.
  • Podcaster Marty Bent, citing three sources, accused Coinbase of lobbying to limit the de minimis tax exemption to stablecoins only, an accusation echoed by the Bitcoin Policy Institute's Connor Brown.
  • Bitcoin Policy Institute's Connor Brown confirmed a strong political shift in Washington D.C. toward a stablecoin-only de minimis tax rule in recent months, creating headwinds for a broader Bitcoin exemption.
  • Coinbase Chief Policy Officer Faryar Shirzad called the lobbying accusation a total lie, but CEO Brian Armstrong has not made a definitive public statement, prompting public calls for clarity from Jack Dorsey's Block.
  • Jack Dorsey's Block is campaigning for Bitcoin as everyday money, building Lightning tools for merchants, and argues that a de minimis tax exemption is essential to validate its entire payment infrastructure business model.
  • A powerful faction in Washington D.C. is moving to treat stablecoins as the only viable digital currency for payments, a policy outcome that would cement Bitcoin's status solely as a capital asset.

Also from this episode:

Adoption (1)
  • Block's Miles Suter argues that Bitcoin payments are what validate Bitcoin as money, stating if Bitcoin just becomes digital gold, we failed the mission.
Lightning (2)
  • Lightning Network volume data from November 2025, showing $1.17 billion across over 5 million transactions, provides the strongest evidence against the political argument that no one is using Bitcoin as money.
  • Cash App processed one in four outbound Lightning Network payments in November 2025, demonstrating significant user adoption of Bitcoin for payments.
BTC MarketsAdoptionPaymentsRegulation

Civil AI | Bitcoin News • Mar 11

  • Binance has filed a defamation lawsuit against the Wall Street Journal's publisher, Dow Jones, following a report alleging the DOJ is investigating if Iran used the exchange to circumvent US sanctions.
  • Binance stated it never fired employees for raising compliance concerns and fully cooperated with law enforcement, denying the WSJ report's claims.
  • The lawsuit comes while Binance operates under a US-appointed compliance monitor, who has requested records pertaining to the alleged Iranian transfers.
  • Despite institutional resistance, firms like Mastercard are advancing mainstream crypto adoption through new global partner programs, including with Binance.
  • Binance has a history of legal action against media, having previously sued Forbes in 2020, and pleaded guilty to US AML and sanctions violations in 2023, paying $4.3 billion in penalties.

Also from this episode:

Adoption (3)
  • Netflix blocked Bitcoin mining firm SAS Mining and lending platform Ledden from sponsoring a boxer's gear for a live-streamed fight, citing a policy against speculative financial products.
  • Ken Halliburton, CEO of SAS Mining, called Netflix's decision incoherent, noting it approved sponsorships from gambling sites Polymarket and DraftKings, which involve real-money speculation.
  • The reversal forced boxer Justin Cardona to replace custom-embroidered trunks at his own expense just a week before the fight, disrupting his preparation.
BTC MarketsRegulationAdoption

BTC's Golden Ticket | Bitcoin News • Mar 10

  • The Department of Justice is pursuing a second trial against Tornado Cash co-founder Roman Storm on unresolved money laundering charges, which could carry a maximum 40-year sentence.
  • Roman Storm was previously convicted of operating an unlicensed money-transmitting business. Bitcoin & Economic News host argues Storm is being prosecuted for writing open-source code for a protocol he doesn't control, calling him a political martyr.
  • The host characterizes the DOJ's pursuit of a second trial against Storm as political theater, questioning why a potential Trump administration hasn't intervened with a pardon.
  • U.S. authorities are sending conflicting messages, with a DOJ official stating 'writing code is not a crime' and the Treasury acknowledging legitimate privacy uses for mixers, while prosecutors simultaneously push forward with the case against Storm.
  • Coinbase has launched regulated Bitcoin and crypto futures in 26 European countries through its MiFID-registered entity, offering a regulated alternative to offshore platforms.
  • Coinbase's new European futures platform, which includes cash-settled Bitcoin futures and a 'MAG7' crypto-equity index with up to 10x leverage, uses USDC for funding instead of Tether. The host sees this as a regulatory-driven choice.
  • The host frames the dual narratives of the legal battle over code and the race to build regulated financial empires as two sides of the same fight to define the next era of finance.

Also from this episode:

Markets (1)
  • The host speculates Coinbase's European futures launch aligns with its 'exchange for everything' strategy and predicts Elon Musk might attempt to buy the company to integrate it into his 'everything app' vision for X.
PrivacyRegulationETFsCustody
TFTC: A Bitcoin Podcast
TFTC: A Bitcoin Podcast

#727: Orange Pilling The Deep State with David Zell • Mar 16

  • David Zell argues the cryptocurrency industry lobby, led by Coinbase and backed by Ripple and A16Z, is spending its political capital on regulatory frameworks for token trading rather than on Bitcoin-focused tax reforms.
  • Zell claims the lobby successfully reshuffled the legislative priorities of Bitcoin-friendly lawmakers like Senator Cynthia Lummis, pushing for token market structure and stablecoin regulation to take precedence over making Bitcoin usable as currency.
  • A key Bitcoin-specific policy being sidelined, according to Zell, is the de minimis tax exemption, which would treat small Bitcoin transactions as money and remove a barrier to its use as everyday currency.
  • Zell notes that while executives like Coinbase's Brian Armstrong speak in favor of such tax reform, there is little evidence of the crypto lobby spending political capital to advance it, with Coinbase having declined to sign an industry letter supporting the exemption last year.
  • Zell sees the incentive structure as clear, arguing that market structure regulation benefits crypto businesses more directly than removing transaction taxes for Bitcoin users.

Also from this episode:

Adoption (2)
  • The fundamental misalignment, per Zell, is between Bitcoin's monetary use case and the crypto industry's commercial focus on what he calls the 'token casino' and stablecoin yield.
  • The lesson for Bitcoin advocates from this episode, according to Zell, is that political influence for Bitcoin's monetary priorities must be actively defended and cannot be assumed, even from within the broader digital asset industry.
BTC MarketsRegulationETFsAdoptionPayments
Rabbit Hole Recap
Rabbit Hole Recap

RABBIT HOLE RECAP #400: COINBASE FIGHTS BITCOIN • Mar 12

  • According to Matt Odell, citing two sources, Coinbase lobbyists are pushing Washington to prioritize a de minimis tax exemption for stablecoins while sidelining a similar exemption for Bitcoin payments.
  • A de minimis tax exemption would remove a major barrier to Bitcoin as everyday money by eliminating capital gains reporting on small purchases like coffee.
  • Odell argues that seeking a de minimis exemption for stablecoins is redundant, as they are pegged to the dollar and any taxable gain is inherently minimal.
  • Coinbase's product focus, such as its commerce tool supporting only wrapped bitcoin on Ethereum or Base, not native Bitcoin, signals the firm's historical alignment with 'shitcoin land' over Bitcoin-as-money, according to the show.
  • In the broader crypto market structure bill FIT21, the only provision seen as favorable to Bitcoin core principles, the Blockchain Regulatory Certainty Act protecting open-source developers, is reportedly intact due to Senator Lummis's efforts.
  • Odell contends the rest of the FIT21 Act is designed primarily to grease the wheels for token casinos and speculative crypto markets, not to support Bitcoin's foundational use cases.
  • The episode frames this lobbying report as part of a recurring pattern where the broader crypto industry sacrifices Bitcoin user interests, like developer protection and self-custody rights, to prioritize its own speculative agenda.
BTC MarketsPaymentsRegulation

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