Trump's Crypto Pivot: Promises and Challenges in Regulatory Overhaul
Former President Trump, once critical of cryptocurrencies, now courts the industry with promises of regulatory change. His potential victory could reshape crypto policies, but faces hurdles within the SEC structure.
Donald Trump's recent appearance at a bitcoin conference marked a significant shift in his stance on cryptocurrencies. The former president, who previously dismissed crypto as a "scam," now promises to fire Securities and Exchange Commission (SEC) Chair Gary Gensler if reelected, a move that resonated with the crypto community.
Under Gensler's leadership, the SEC has intensified its regulatory efforts in the crypto space. The commission has initiated numerous enforcement actions against major exchanges like Coinbase, Binance, and Kraken, resulting in substantial fines.
A potential Trump victory could dramatically alter the regulatory landscape. The crypto industry's wishlist includes:
- Appointing crypto-friendly individuals to key positions
- Revising guidance on crypto custody options
- Implementing a safe harbor for new tokens
- Halting certain enforcement actions
Kristin Smith, CEO of the Blockchain Association, emphasized the importance of nominating individuals who understand and appreciate crypto to key positions.
While Gensler's term extends until 2026, Trump could potentially replace him with an acting chair. Hester Peirce, a crypto advocate and Republican commissioner, is considered a likely candidate for this role.
The industry is also promoting Brian Brooks and Chris Giancarlo, both of whom served in Trump's first administration, for the permanent SEC chair position. Giancarlo, known as "Crypto Dad" during his tenure as Commodity Futures Trading Commission chair, suggests creating an interim regulatory regime until Congress acts.
"It would be an excellent place to start a new era of engaging with this innovation."
Immediate policy changes could include rescinding the 2022 SEC guidance requiring public companies to account for crypto assets as liabilities. Cody Carbone, chief policy officer at the Chamber of Digital Commerce, believes this change could happen on "Day One" of a Trump administration.
However, implementing significant changes may face challenges due to the SEC's political structure. The five-member commission, currently dominated by Democrats, votes on major issues. Even with a new chair, the commission could remain evenly divided, potentially constraining immediate policy shifts.
Despite these potential hurdles, the cryptocurrency market, with a capitalization of around $2.5 trillion, remains optimistic about the possibility of more favorable regulations under a Trump administration.
As the debate between treating crypto tokens as securities or commodities continues, the industry eagerly anticipates potential regulatory changes that could shape the future of digital assets in the United States.
