Here’s what you’ll find in today’s edition:

• How a new SEC crypto task force could spur industry growth.

• Trump signals his tariff plans are still in the works. 

• These Republican lawmakers are trying to change IRS reporting requirements.

What the SEC’s new crypto task force could mean 

If you’ve been reading Forward Guidance, you know the last few days in crypto land have been — to put it mildly — eventful.

Bitcoin surged to a new all-time high the day Donald Trump was sworn in. After a pullback, BTC’s price rebounded yesterday to $107,000. BTC hovered around $104,200 at 1:30 pm ET.

Despite a lack of crypto-specific executive orders, optimism stemmed from word of a new Hester Peirce-led SEC crypto task force.

Those watching the space know Peirce’s name; Wormhole Foundation general counsel Cathy Yoon called it “a relief” that she would guide this unit. 

“She is proactive, engaged and most importantly, rational when it comes to thoughtful regimes concerning digital assets,” Yoon said of the SEC commissioner in a statement.    

Peirce’s crypto-friendly record is clear, and spans years. She first floated a “token safe harbor proposal” in 2020 to spur developer innovation by temporarily exempting builders from securities laws registration provisions. She said US spot bitcoin ETFs should have been approved years before they got the green light in January 2024. 

And in an era marked in part by SEC lawsuits against crypto companies, Peirce said bluntly in 2023 that “litigation is not the most effective way to carry out regulations.” 

Philip Moustakis, a partner at Seward & Kissel LLP and an ex-senior counsel in the SEC’s enforcement division, noted that while former SEC Chair Jay Clayton paired enforcement actions with informal guidance, that essentially stopped under Gary Gensler.

The task force announcement signals the return of valuable informal guidance and potentially more formal direction in the works, Moustakis added. 

“This is not to say the federal securities laws will not apply to crypto offerings or transactions under appropriate facts and circumstances,” he said. “Ideally, however, there will be more clarity with respect to when and how they apply, and they will be applied in a way that lets crypto [be] crypto.”

Arthur Jakoby, co-chair of the securities litigation and enforcement practice at Herrick, Feinstein LLP, said he considers the group creation “a sign that the SEC will review all current crypto-related enforcement actions and likely discontinue existing cases which the new leadership…views as ill-conceived or inconsistent with promoting the growth of the crypto industry in the United States.”

Perhaps some of that will be discussed in this meeting slated for Thursday:

We can’t mention the SEC’s move without noting what it could mean for the growing number of crypto ETF filings in front of them.

After plans for solana, XRP and litecoin ETFs, newer proposals now include funds that would hold DOGE and Trump’s memecoin. 

The industry shouldn’t expect any approvals overnight, many agree. Still, the SEC unit promoting structured disclosure frameworks, practical registration paths and regulator-industry engagement would go a long way, 21Shares crypto research strategist Matt Mena said.  

That, he added, “could create a more transparent approval process, addressing key SEC concerns such as custody, investor protection and market integrity — just as was done for spot bitcoin ETFs.”

— Ben Strack

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The price levels bitcoin could reach, according to BlackRock CEO Larry Fink.

Those numbers came from Fink after he mentioned a sovereign wealth fund that asked him about a 2% or 5% allocation to BTC. 

“If everybody adopted that conversation, it would be $500,000, $600,000, $700,000 per bitcoin,” Fink said.

That is “not my promotion,” Fink quickly clarified. 

But he did note he is a “big believer” in BTC as an instrument to hedge against currency debasement. And you might recall BlackRock executives calling a 1-2% position in BTC “a reasonable range.”

As expected, Donald Trump has backed off a bit on the ambitious tariff goals he touted on the campaign trail. 

“I think we’ll do it Feb. 1,” Trump said during a Monday press conference, referring to tariff increases on Canada, Mexico and China. 

While he did not comment on specific timing or pace of tariffs, based on conversations with Stephen Miran, head of Trump’s council of economic advisors, we expect to see tariffs increase by around 2% to 5% per month. 

The first time Trump proposed 25% tariffs on China was back in 2018. What ended up actually happening was a ~17% effective tariff, which was implemented over the course of a year. 

“The after-tariff dollar-import price of goods coming from China was practically unchanged,” Miran said. 

In Trump’s day 1 trade policy memorandum, he gives various federal agencies until April 1 to turn in reports on “unlawful migration and fentanyl flows” from Canada, Mexico and China. 

He also instructs the secretaries of the Treasury, Commerce and Homeland Security to evaluate how to create the “External Revenue Service,” a new agency Trump wants to task with collecting tariffs. 

“Instead of taxing our citizens to enrich other countries, we will tariff and tax foreign countries to enrich our citizens,” Trump said on Monday.

— Casey Wagner

Congressional Republicans are working to reverse new IRS guidelines that require so-called “custodial brokers” to report transactions. 

Rep. Mike Carey and Sen. Ted Cruz this week introduced corresponding resolutions seeking to “roll back the disastrous IRS broker rule.” 

The legislation comes weeks after a group of crypto lobbying firms sued the IRS over the rule. They claim the requirement “exceeds the agencies’ statutory authority, violates the Administrative Procedure Act (“APA”) and is unconstitutional.” 

As it currently stands, starting in 2025, custodial brokers are required to report gross proceeds. In 2026, they will have to report cost basis for certain transactions. 

The final version of the 1099-DA form was published at the end of last year. While earlier drafts had included a section where brokers had to identify their “type” of business, the final form nixed this box. It’s a small change, but by cutting this section the IRS more or less punted the issue of DeFi actors. 

Even so, those opposed to the rule claim that the rule still imposes unfair reporting obligations on intermediaries and other actors in the crypto space. 

The resolutions have some co-sponsors (Sens. Cynthia Lummis and Tim Sheehy, to name a few), but neither have been scheduled for a markup or vote just yet. This is a hot-button issue in the crypto space though, so we’d expect companies to be directing a significant amount of their lobbying efforts here.

— Casey Wagner

• Danielle Sassoon, lead prosecutor on the SBF case last year, was appointed interim US attorney for the Southern District of New York. Trump has nominated Jay Clayton for the position, but timing on if and when he’d take over from Sassoon is unclear. 

• Bond yields are finally on the decline this week. The 10-year yield dropped below 5.53% for the first time in weeks yesterday before moving back into the 5.6% range today, a far cry from the peak of 5.8% last week. 

• The S&P 500 hit another record high today. The moves are largely thanks to Nvidia and Oracle shares, which soared on optimism that Trump will bring a more AI-friendly regime.