Translated by | Wu Blockchain
Original link:
https://www.washingtonpost.com/business/2024/11/11/trump-crypto-regulation-bitcoin/
President-elect Donald Trump is preparing to take a more tolerant stance toward cryptocurrencies in the U.S. government, focusing on appointing a slate of industry-friendly candidates to key positions, while his senior advisers are also discussing potential federal policy changes with crypto executives.
By seeking a more relaxed regulatory environment, Trump hopes to fulfill his campaign promise of making the U.S. the "global capital of cryptocurrencies" — a statement that angered consumer protection agencies but won strong support from the industry and drove up the price of Bit.
Early discussions have centered on a group of financial regulators, including the U.S. Securities and Exchange Commission (SEC). According to five people familiar with the matter, Trump's aides are considering a number of current regulators, former federal officials and financial industry executives, many of whom have publicly expressed support for cryptocurrencies, for key leadership roles. They requested anonymity to discuss the matter, and cautioned that the process is still in the early stages and the list of candidates is constantly changing.
These appointments are crucial: under Trump's leadership, the heads of the SEC and other agencies will have the power to decide whether cryptocurrencies will become a larger, more formal part of the financial system. This choice will have major implications for the global economy, and the risks are high, as evidenced by the collapse of crypto giant FTX in 2022 and the disastrous contagion it triggered.
According to sources, the people being considered for the SEC and other positions include Daniel Gallagher, a former SEC official who now works at financial technology company Robinhood, which offers crypto wallets and stock trading services; and the SEC's two Republican commissioners, Hester Peirce and Mark Uyeda.
Gallagher, a Republican donor, has previously criticized the SEC for taking a "scorched earth policy" toward cryptocurrencies. Peirce and Uyeda have criticized the policies and enforcement actions taken by their agency under President Joe Biden's leadership. Peirce is seen as a potential candidate to serve as the SEC's interim chair under a Trump administration, and could then lead a federal crypto policy task force.
"The commission's war on cryptocurrencies must end, including crypto enforcement actions that are based solely on lack of registration and not on fraud or harm allegations," Uyeda said in an interview with Fox Business Channel this month. "President Trump and the American people have sent a clear message. Starting in 2025, the SEC's role will be to implement this mission."
According to sources, Trump's aides are also looking at Paul Atkins, a former SEC commissioner who assisted with Trump's previous transition team; and Chris Giancarlo, a former Commodity Futures Trading Commission (CFTC) commissioner.
The SEC candidates will replace current chair Gary Gensler, whom Trump promised to "fire" at a major Bit conference this summer. Under Gensler's leadership, the SEC has aggressively cracked down on crypto companies, bringing fraud charges against the FTX leadership and making a series of allegations about the business practices of another exchange, Binance. The agency has also clashed in court with other crypto exchanges like Coinbase and Kraken, as well as Ripple, the company behind the XRP token, accusing them of failing to register their platforms or tokens as required by federal law — allegations they all deny.
"His days are numbered," Ripple CEO Brad Garlinghouse said, adding that the company "has been in touch with the Trump transition team." "I think it's pretty clear this is an area they intend to continue to focus on. I think Trump and many others recognize there's a whole series of new technologies that could define the next several decades."
More broadly, crypto supporters believe Gensler has wrongly expanded the law based on his personal distaste for digital assets — and they hope his successor will reverse some of the ongoing federal enforcement actions. But it's unclear whether Trump will or can actually fire the current SEC chair, rather than demoting him to commissioner while installing new leadership at the agency. A full dismissal of Gensler — a Senate-confirmed regulator — could spark novel and complex legal battles over presidential power, some sources say.
As for Gensler himself, he has not explicitly stated whether he will resign voluntarily after the government transition, though SEC officials typically do so. A spokesperson declined to comment.
"The American people overwhelmingly re-elected President Trump, entrusting him with the mandate to fulfill his campaign promises," Karoline Leavitt, a spokesperson for the Trump transition team, said in a statement. "He will deliver on that promise."
Regardless of the outcome, early signs indicate a dramatic shift in Washington's attitude toward cryptocurrencies, underscoring the industry's rapid rise as a major political donor in the U.S. — helping elect dozens of crypto-friendly members of Congress while also providing strong support for Trump's presidential bid.
Industry executives say they are primarily seeking regulatory clarity, as Congress has failed to pass comprehensive legislation to govern their products and services — such as rules that would determine when cryptocurrencies are considered securities or currencies, what investor protections should apply, and which agency will oversee the industry and its offerings.
"I think a lot of industries, a lot of companies say they want regulation, but their actual goal is the opposite," said Paul Grewal, chief legal officer at Coinbase. When it comes to cryptocurrencies, he said, the situation is different: "There is specific legislation pending in Congress that we believe will protect investors and, frankly, resolve some ambiguities."
But this political push has unsettled some Democrats on Capitol Hill, who argue that the crypto industry's supported legislative solutions may actually leave millions of Americans with less protection — increasing risks of losses and fraud, while posing new threats to the financial system.
"This means people will be more exposed to an industry rife with fraud, abuse, market manipulation and cybersecurity vulnerabilities," said Patrick Woodall, policy director at Americans for Financial Reform, an organization that advocates for stronger financial regulation. "It's an extremely unstable industry where people suffer huge losses, and insider manipulation of markets is very common."
To win the industry's support, Trump attended a national Bit conference in Nashville in July, unveiling a pro-crypto agenda that he said he would push if he returned to the Oval Office. He promised to advance "crypto policies written by people who love your industry," and predicted Bit would surge under his leadership.
Trump's unequivocal support marks a significant shift from his first term, when he had dismissed cryptocurrencies as a "scam." But he ultimately embraced the industry because it provided him with public praise and financial backing, even helping him launch his own crypto project in the final weeks before winning the presidency, according to two people familiar with the matter. Some crypto titans, including Kraken's chief legal officer Marco Santori and David Bailey, who organized the Nashville crypto conference, later attended Trump's election night party in Florida.
Bailey did not respond to a request for comment. Kraken declined to comment, and Santori, as one of the crypto executives discussed as a potential Trump transition team member, also declined to comment.
To prepare for his return to the White House, Trump has surrounded himself with some well-known cryptocurrency supporters, including Elon Musk, one of Trump's closest tech allies and financiers, as well as Howard Lutnick, who has close ties to the troubled cryptocurrency Tether. Lutnick is the co-chair of the presidential transition process, and Bailey, who helped Trump connect with the Bitcoin community, also remains actively involved.
Particularly, Lutnick's involvement has raised concerns about potential conflicts of interest - as he is helping to select potential federal high-level positions that could directly impact his business as CEO of the Wall Street firm Cantor Fitzgerald. For example, Lutnick has openly acknowledged that he manages "many, many assets" of Tether, the currency facing potential sanctions from the U.S. Treasury Department.
According to a person familiar with the crypto plans, Lutnick has engaged in some outreach to the crypto industry along with other Trump aides, including Michael Kratsios, who previously served as the White House's chief technology officer. Officials have spoken with at least one major crypto company about the possibility of joining a new presidential digital currency council that Trump has promised to establish if elected.
Another person believes the incoming administration plans to appoint a top crypto advisor to the White House's key policy shop - the National Economic Council. Beyond that, the government will need to fill several critical roles: in addition to the SEC, Trump must select leaders for the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), all of which regulate certain elements of cryptocurrencies, including their relationship to the banking system.
Some crypto executives say they have also discussed with Trump's aides the possibility of early executive orders or other presidential directives that could aid the industry, such as by clarifying regulatory jurisdictions between federal agencies, or by conducting research to find ways the government can further develop the crypto ecosystem. They liken it to a series of similar orders issued during Trump's first term that outlined the government's approach to financial system oversight under the so-called Dodd-Frank Act.
Some of these conversations can be traced back to the campaign period, and it remains unclear whether Trump will take action as he prepares to govern again. Many observers do expect him to fulfill a pledge to establish a national crypto reserve, preventing the U.S. government from selling off the Bitcoin and other tokens it has seized in past criminal investigations.
"President Trump has the House and the Senate. He has the authority," Bailey said on X last week, though as of Monday the Associated Press had not called a series of House races, leaving the party control of that chamber unclear. "We have the environment to get this done in the first 100 days."
Appendix: Candidate Background Information
According to sources, individuals being considered for roles at the U.S. Securities and Exchange Commission (SEC) and other positions include:
1. Daniel Gallagher: Former SEC commissioner, currently at financial technology company Robinhood, overseeing regulatory affairs. Robinhood offers stock trading and cryptocurrency services, including crypto wallets.
2. Hester Peirce: Current Republican SEC commissioner, known as "Crypto Mom" for her pro-crypto currency stance. She has repeatedly criticized the SEC's overly strict crypto regulation policies and advocated for a clearer regulatory framework to foster the crypto industry's development.
3. Mark Uyeda: Current Republican SEC commissioner, he opposes the SEC's tough stance on the crypto industry, arguing for an end to enforcement actions without fraud or harm allegations. He has expressed support for crypto development in multiple settings, believing the SEC should provide space and clarity for the industry's innovation.
