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US President Donald Trump gestures at the Bitcoin 2024 event in Nashville, Tennessee. — Reuters/File
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RICHMOND: After pouring record money into the 2024 US election, the cryptocurrency industry is hopeful of a new friendly reception from DC policymakers after a hostile environment in the Biden administration.
Crypto-related interests have poured millions of dollars into campaigns for President Donald Trump and pro-crypto candidates, hoping he and an aide in Congress will avoid dozens of enforcement actions by the Securities and Exchange Commission (SEC) under Biden. After handling will implement industry friendly rules and regulations. .
Among the possible policy priorities are legislation that would provide clarity on crypto’s place in markets, a US-backed ‘strategic bitcoin reserve’ and legislation on stablecoins, which are cryptocurrencies whose value is tied to another asset. is
Even with a Republican majority, Congress may well run out of major new legislation. But crypto advocates still welcome new leadership at key regulatory agencies like the SEC, which they have criticized for being heavy-handed in targeting the industry.
“I think we’re going to see movement both through the executive branch and through Congress,” said Jake Shapiro with the Bitcoin Policy Institute, adding that if at least one or two comprehensive bills don’t pass, he’ll have It will be very surprising.
Fairshake PAC, an outside political group that received large donations from key crypto interests like platform company Coinbase, was the most active of such groups in 2024.
Shapiro notes that “crypto(a) is a political force exerting its influence up and down the ballot in the 2024 election, in what he calls the “surprising influence” of groups like FairShake PAC.
“I think it didn’t escape the notice of the legislators,” he said. For its part, Trump’s team suggested that a new day would dawn in how the industry operates.
“There’s an effort to stifle innovation in the Washington bureaucratic quagmire with more regulation and higher taxes, but Brian Hughes, a spokesman for President Trump’s transition team, is eager to encourage U.S. leadership in crypto and other emerging technologies. We will fulfill our promise.” , told Context just days before Trump was sworn into office.
According to Reuters, Trump is expected to sign an executive order creating a crypto advisory council.
Suppress heresy?
At or near the top of the priority list is a legislative decision on how digital assets are classified. This is an important distinction that can determine whether a token is regulated by an entity such as the Commodity Futures Trading Commission (CFTC) or the SEC.
Crypto enthusiasts have long sought a definition on whether coins and tokens should be classified as commodities, the scope of the CFTC, or securities, which would fall under the SEC and This means stricter reporting and registration requirements.
“Right now if you’re trying to do a registered offering in token form, it’s not really clear where and how those tokens can be traded and what disclosures you need to make,” Shapiro said.
Trump’s allies in Congress and crypto supporters like Sen. Cynthia Limsis of Wyoming are also keen to create a US strategic bitcoin reserve. The idea was revealed during a recent appearance on the New York Stock Exchange.
Supporters say the reserve will help solidify the U.S. as a leader in the sector and help strengthen the country’s finances in the long run.
“Bitcoin is changing not only our country, but the world, becoming the first developed nation to use bitcoin as a savings technology,” Loomis said in a statement.
Another issue is legislation that would provide a regulatory framework for the treatment of stablecoins, or cryptocurrencies whose value is tied to another asset.
How much Congress is able to pass is “very much up in the air and it’s probably subject to some amount of jockeying within the industry based on different preferences of different people,” Shapiro said.
‘Card of Cards’
While the industry may be happy to see Biden-appointed former SEC Chair Gary Gensler turn the page, consumer advocacy groups have warned that a more laissez-faire environment could open the door for scammers to flourish. .
“I’m not apocalyptic, but I lived through this guy’s first administration [Trump]and I’m not optimistic about anything that’s consumer friendly,” said Ira Reingold, executive director of the National Association of Consumer Advocates (NACA).
“I see crypto as a house of cards that the wrong gust of wind will knock over.” Reingold’s group was part of a team that sued the crypto platform Gemini last year, alleging that Gemini’s user agreement violated both federal and D.C. law by limiting damages to its users. was finished
Gemini did not respond to requests for comment on the litigation. “If I were a legitimate cryptocurrency company, I would want regulation because I think regulation actually legitimizes the business and gives people some protection,” Reingold said. Still, he’s not sure how D.C. policymakers will approach things.
