Antony Parsons
Today, as the world watches the unfolding of the 2024 U.S. presidential transition, President-elect Donald Trump is making waves in the cryptocurrency community. Trump is preparing the U.S. government to adopt a more permissive stance toward cryptocurrency, eyeing a roster of industry-friendly candidates for key posts. These moves are aimed at fulfilling his campaign promise to transform the United States into the “crypto capital of the planet.”
A Shift in Regulatory Stance
By pursuing a more lenient regulatory environment, Trump aims to fulfill his campaign promise to turn the U.S. into a hub for crypto innovation. This declaration has sent the price of bitcoin soaring, reaching nearly $89,000 by Monday evening. The early discussions have centered on financial regulatory agencies, including the Securities and Exchange Commission (SEC).
Key Candidates Under Consideration
Trump’s aides have considered a mix of current regulators, former federal officials, and financial industry executives for important leadership posts. Some of the names under consideration include:
- Daniel Gallagher: A former SEC official now at the financial technology firm Robinhood, which offers crypto wallets as well as stock trading. Gallagher previously faulted the SEC for taking a “scorched earth” approach to crypto.
- Hester Peirce: A Republican commissioner at the SEC who has criticized the agency for policy and enforcement actions taken under President Joe Biden. Peirce is seen as a potential interim chair of the SEC, who could later lead a federal task force on crypto policy.
- Mark Uyeda: Another Republican commissioner at the SEC, who has also criticized the agency. Uyeda told Fox Business this month, “The commission’s war on crypto must end, including crypto enforcement actions solely based on a failure to register with no allegation of fraud or harm.”
- Paul Atkins: A former SEC commissioner who aided on Trump’s last transition.
- Chris Giancarlo: A former commissioner at the Commodity Futures Trading Commission (CFTC).
These appointments are critical, as they will determine whether crypto will become a larger, more formalized part of the financial system, with vast implications for the global economy.
Replacing Gary Gensler
The candidate selected for the SEC is set to replace its current chairman, Gary Gensler, whom Trump promised to “fire” in an appearance at a major bitcoin conference this summer.
Under Gensler, the SEC has aggressively cracked down on crypto companies, filing fraud charges against the leader of FTX and levying a vast array of allegations against Binance, another trading platform, over its business practices. The agency has also sparred in court with Coinbase and Kraken, two other crypto exchanges, and Ripple, which launched the XRP token, for allegedly failing to adhere to federal law requiring registration of their platforms or tokens — charges they each deny.
Industry Support and Political Influence
Broadly, crypto supporters say Gensler has wrongly stretched the law out of a personal distaste for digital assets — and they expect his successor to reverse course on some of the federal enforcement actions now underway. But it remains unclear if Trump can or will actually fire the sitting SEC chairman, rather than demote him to a commissioner while turning over the agency to a new leader. Fully ousting Gensler — a Senate-confirmed regulator — could trigger a novel and complicated legal battle over the president’s authorities, some of the people familiar with the matter said.
Garlinghouse, the chief executive of Ripple, added, “I think it’s clear this is an area they intend to continue to focus on. I think Trump and a bunch of people realize there’s a new set of technologies that are likely to define the next couple of decades.”
No matter the outcome, the early signs suggest a dramatic change in the way Washington approaches cryptocurrency, a shift that underscores the industry’s rapid ascent into the top ranks of donors in American politics — having helped to elect dozens of friendly candidates to Congress while contributing heavily in support of Trump’s bid for the White House.
Seeking Regulatory Clarity
Industry executives say they mostly seek regulatory clarity, since Congress has failed to pass a single, comprehensive law governing their products and services — rules that would determine, for example, when crypto is a security or a currency, which investor protections should apply, and which agency would regulate the industry and its offerings.
“There is specific legislation in the Congress right now that we believe would protect investors, and frankly, resolve some of the ambiguities,” said Paul Grewal, the chief legal officer for Coinbase.
But the political blitz has troubled some Democrats on Capitol Hill, who say the legislative solutions backed by the crypto industry could actually leave millions of Americans with fewer protections — increasing the risks of loss and fraud, while posing new threats to the financial system.
“It means that people are going to be more vulnerable to an industry that is rife with fraud, abuse, market manipulation, and cyber-breaches,” said Patrick Woodall, the managing director for policy at Americans for Financial Reform, which advocates for stronger financial regulations. “This is an industry that is extremely volatile, where people take big losses, where market manipulation by insiders is very prevalent.”
Trump’s Pro-Crypto Agenda
To win the industry’s favor, Trump appeared in July at a national bitcoin gathering in Nashville, unfurling a pro-crypto agenda he said he would pursue if he returned to the Oval Office. He promised to advance crypto policies “written by people who love your industry” and predicted that bitcoin would surge under his watch.
Trump’s unqualified support marked a stark departure from his first time in office, when he dismissed crypto as a “scam.” But he ultimately came to embrace the industry as it showered him with public praise and financial support, even helping to launch his own crypto venture in the weeks before winning the presidency. A handful of crypto magnates — including Marco Santori, the chief legal officer at Kraken, and David Bailey, who hosted the crypto conference in Nashville, later joined Trump at his election night party in Florida, according to two people familiar with the matter.
Trump’s support for crypto marks a stark departure from his previous skepticism. He has surrounded himself with prominent crypto supporters, including Elon Musk and Howard Lutnick, who are helping to shape the incoming administration’s crypto policy. Trump has also promised to launch a national reserve for cryptocurrency and issue executive orders to clarify regulatory authorities.
Conclusion
The early signs suggest a dramatic shift in Washington’s approach to cryptocurrency, reflecting the industry’s growing influence in American politics. While the specifics of Trump’s crypto policy remain to be seen, the crypto community is optimistic about the potential for a more supportive regulatory environment under his leadership.
