Coinbase Executive Highlights Future Path of Federal Cryptocurrency Regulations Amid 2025 Legislative Shifts
As the United States approaches pivotal moments in cryptocurrency regulation, a Coinbase executive recently outlined the company’s perspective on the future of federal crypto regulations. This comes amid a flurry of legislative and regulatory activity in 2025 aimed at clarifying and streamlining the U.S. digital asset landscape.
Testimony at Senate Hearing Marks Significant Step
On October 1, 2025, Coinbase was represented by Lawrence Zlatkin, Vice President of Tax at Coinbase, during a landmark U.S. Senate Finance Committee hearing dedicated to the complicated realm of cryptocurrency taxation. His testimony underscored the urgent need for clear, consistent regulatory frameworks that adequately address the unique features of digital assets, which continue to expand in adoption and complexity.
The hearing highlighted challenges such as tax compliance burdens faced by users and intermediaries, and the pressing demand for federal guidance that protects consumers while fostering innovation. In conjunction with other experts, Zlatkin’s testimony emphasized collaboration between industry and regulators as crucial to developing sensible crypto tax policies that might serve as a foundation for future legislation.
Push for Federal Preemption to Simplify Regulation
Coinbase has been actively advocating for strong federal preemption provisions to override the patchwork of state laws that currently govern cryptocurrency activities. Specifically, the company has petitioned the U.S. Department of Justice to formally recommend to Congress that any new federal crypto market structure legislation should supersede conflicting state regulations, such as varying “blue sky” securities laws and state licensing regimes.
This stance aims to reduce fragmented regulatory environments that Coinbase and other firms argue impede innovation and raise compliance costs. For instance, Illinois recently enacted comprehensive crypto laws that vest regulatory authority in the state’s Department of Financial and Professional Regulation, exemplifying the kind of state-level legislative divergence that preemption advocates seek to override.
Federal Legislative Advances in 2025
The testimony and advocacy by Coinbase coincide with what many in the industry call a historic year for cryptocurrency legislation. During the so-called “Crypto Week” of 2025, U.S. lawmakers passed three significant bills – the GENIUS Act, the CLARITY Act, and the Anti-CBDC Act – with the GENIUS Act already signed into law. These measures collectively represent the first substantial federal crypto regulatory framework in the U.S., aiming to bring greater clarity and uniformity to the sector.
Senator Bill Hagerty described these developments as vital to maintaining America’s leadership in digital asset innovation. The changes include new rules on how banks and federal savings associations can offer crypto-related products, aiming to balance innovation with consumer protections.
Regulatory Clarifications Benefit Coinbase and Other Custodians
In parallel, the U.S. Securities and Exchange Commission (SEC) issued a no-action letter clarifying that state-chartered trust companies such as Coinbase and Ripple meet the eligibility requirements to act as qualified custodians for crypto assets in registered funds. This clarification resolves previous ambiguities about the definition of “banks” under relevant federal law and allows these firms to serve clients under clearly defined custody standards.
The SEC’s directive requires custodians to have policies protecting against theft or loss and prohibits lending or rehypothecating client assets without consent, providing a strengthened regulatory framework for digital asset custody.
Tax Reporting Changes Affect Crypto Users
Starting January 1, 2025, Coinbase began complying with new IRS rules mandating the reporting of gross proceeds from users’ crypto sales and exchanges on the Form 1099-DA. The IRS also requires brokers like Coinbase to report cost basis for such transactions beginning in 2026, increasing transparency and accuracy in crypto tax reporting.
Coinbase requests users to provide proper tax certification via Form W-9 for U.S. taxpayers or Form W-8 for non-U.S. taxpayers, with backup withholding penalties potentially applying for non-compliance from 2027 onwards. These measures reflect the broader regulatory emphasis on enhancing tax compliance in the rapidly growing crypto ecosystem.
Industry and Legislative Outlook
With Coinbase taking an active role in shaping regulatory reforms, the interplay between federal legislation, SEC guidance, and industry collaboration signals a maturing regulatory environment. Lawmakers, regulators, and crypto firms appear united in advancing policies that sustain innovation while instituting necessary oversight.
This evolving landscape is expected to influence how millions of cryptocurrency users and institutions comply with tax obligations, engage with digital assets, and foster market stability. Observers anticipate that ongoing legislative and regulatory clarifications will accelerate institutional adoption and clarify compliance expectations nationwide.
Industry stakeholders continue to watch developments closely, as 2025 sets a critical precedent for the trajectory of federal cryptocurrency regulations and the balance between innovation, investor protection, and regulatory certainty.