U.S. Capitol building in Washington, D.C. June 13, 2018. Photo: Diego M. Radzinschi/ALM

It's hard to comply with regulations that don't exist.

That's one reason cryptocurrency companies have formed the Blockchain Association lobbying group, which launched this week with Coinbase chief legal officer Mike Lempres as president.

The group represents the interests of numerous crypto companies including Coinbase, Circle and Protocol Labs, as well as investors in this space.

Lempres said the group will, in part, push for more regulatory guidance for cryptocurrency companies. Currently, companies face confusion over whether cryptocurrencies are classified as securities or commodities and how they should be taxed.

For companies that want to build sustainable compliance efforts, regulatory clarity is needed now, “not in three years,” according to Lempres.

“The biggest challenge we face, from a regulatory standpoint, is lack of clarity,” he said. “The rules aren't written yet. It leaves companies in a difficult situation. They want to do the right thing but it's sometimes not clear what the right thing is to do.”

The group will also focus on educating policymakers in Washington, D.C.

Lempres said policymakers' lack of crypto knowledge and understanding has been a major challenge in the industry, and one that has played a role in keeping crypto companies in “a box built 100 years ago for a different industry,” as far as regulations go.

Cryptocurrency companies made headlines last year as the price of bitcoin skyrocketed, bringing increased attention from the federal government with it.

Currently, the Blockchain Association has around eight members, a list Lempres said is growing fast, who came together over a desire to have a “responsible voice” representing crypto in D.C. in light of increasing federal involvement in the industry, including scrutiny from the U.S. Securities and Exchange Commission.

So far, the group has taken on one hire to educate and advocate for crypto, Kristin Smith. Smith has previously worked as an aide to former Sen. Olympia Snowe of Maine and as a blockchain lobbyist for Overstock.com. She will be based in Washington, D.C.

Most of the group's members are East or West Coast-based, Lempres said. With Smith also based on the East Coast, Lempres said most communication has been done over video conference. Even if the group isn't meeting in person—which Lempres said he hopes they one day will—there is power in numbers and industry alliances.

That's one reason Circle joined the group, according to head regulatory counsel and chief compliance officer Bob Bench.

“As with early internet innovators, blockchain firms need to partner with the government to effect this technology's full potential. BA is a critical bridge for this partnership,” Bench said in a statement.