Author | The Washington Post
Translated by | Wu Says 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 lenient stance on cryptocurrency for the U.S. government, focusing on a group of industry-friendly candidates for key positions, while his senior advisors are also discussing potential federal policy changes with cryptocurrency executives.
By seeking a more relaxed regulatory environment, Trump hopes to fulfill his campaign promise to make the U.S. the "global cryptocurrency capital"—a statement that has angered consumer regulators but won strong support from the industry, driving up Bitcoin prices.
Early discussions have centered on a group of financial regulatory agencies, including the U.S. Securities and Exchange Commission (SEC). According to five informed sources, Trump's aides are considering several current regulators, former federal officials, and financial industry executives for important leadership positions, many of whom have publicly expressed support for cryptocurrency. They requested anonymity to discuss the matter and noted that the process is still in its early stages, with the candidate list continually changing.
These appointments are crucial: under Trump's leadership, heads of the SEC and other agencies will have the authority to decide whether cryptocurrency will become a larger, more formal part of the financial system. This choice has significant implications for the global economy, and the risks are high, as evidenced by the collapse of crypto giant FTX in 2022 and the resulting catastrophic spillover risks.
Candidates being considered for the SEC and other positions include Daniel Gallagher, a former SEC official currently at fintech company Robinhood, which offers cryptocurrency wallets and stock trading services; and two Republican commissioners of the agency, Hester Peirce and Mark Uyeda.
Gallagher has been a Republican donor and previously criticized the SEC for its "scorched earth policy" towards cryptocurrency. Peirce and Uyeda have criticized their agency's policies and enforcement actions under President Joe Biden. Peirce is seen as a potential interim chair of the SEC after Trump takes office, and she may later lead a special task force on federal cryptocurrency policy.
"The war on cryptocurrency by the commission must end, including enforcement actions against cryptocurrencies that have no fraud or harm allegations simply for being unregistered," Uyeda said in an interview with Fox Business this month. "President Trump and American voters have sent a clear message. Starting in 2025, the SEC's role will be to execute this mission."
According to informed sources, Trump's aides are also looking at Paul Atkins, a former SEC commissioner who assisted with Trump's last government transition; 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 Bitcoin conference this summer. Under Gensler's leadership, the SEC has aggressively targeted crypto companies, filing fraud charges against FTX leaders and a series of allegations against another trading platform, Binance, regarding its business practices. The agency has also clashed in court with other crypto exchanges, Coinbase and Kraken, as well as Ripple, the company behind the XRP token, accusing them of failing to comply with federal laws requiring registration of their platforms or tokens—allegations all these companies deny.
"His days are numbered," Ripple CEO Brad Garlinghouse said, adding that the company has "been in touch with Trump's transition team." "I think it's clear that this is an area they intend to continue to focus on. I think Trump and many others realize that there are a number of new technologies that could define the coming decades."
Broadly speaking, cryptocurrency supporters believe Gensler has wrongly expanded the law due to his personal aversion to digital assets—they hope his successor will reverse some of the ongoing federal enforcement actions. However, it remains unclear whether Trump can or will actually fire the current SEC chair rather than demote him to commissioner while handing the agency over to new leadership. A full dismissal of Gensler—a Senate-confirmed regulator—could trigger a novel and complex legal battle over presidential powers, some informed sources say.
As for Gensler himself, he has not indicated whether he would resign after a government transition, although senior SEC officials typically do so. A spokesperson declined to comment.
"The American people overwhelmingly re-elected President Trump, giving him the mandate to fulfill his campaign promises," said Karoline Leavitt, a spokesperson for Trump's transition team, in a statement. "He will deliver on that promise."
Regardless of the outcome, early signs suggest a dramatic shift in Washington's attitude toward cryptocurrency, highlighting the industry's rapid rise as a significant donor in American politics—it has helped elect dozens of friendly lawmakers while strongly supporting Trump's presidential campaign.
Industry executives say they primarily seek regulatory clarity, as Congress has failed to pass comprehensive legislation to govern their products and services—such rules would determine when cryptocurrencies are considered securities or currencies, what investor protection measures should apply, and which agency will regulate the industry and its products.
"I think a lot of the industry, a lot of companies say they want to be regulated, but their goals are actually quite the opposite," said Paul Grewal, chief legal officer of Coinbase. Regarding cryptocurrency, he stated the situation is different: "There is specific legislation in Congress right now that we believe will protect investors and, frankly, address some of the ambiguities."
But this political push has unsettled some Democrats on Capitol Hill, who argue that the legislative solutions supported by the crypto industry could actually leave millions of Americans with less protection—heightening the risks of losses and fraud while posing new threats to the financial system.
"This means people will be more vulnerable to an industry rife with fraud, abuse, market manipulation, and cyber vulnerabilities," said Patrick Woodall, policy director of the U.S. Financial Reform Organization, which advocates for stronger financial regulation. "This is an extremely unstable industry where people suffer massive losses, and insider trading is very common."
To win the industry's support, Trump attended the National Bitcoin Conference in Nashville in July, announcing an agenda in favor of cryptocurrency, stating he would push this agenda upon re-entering the Oval Office. He promised to advance "cryptocurrency policies written by people who love your industry" and predicted that Bitcoin would soar under his leadership.
Trump's unreserved support marks a significant shift from his first term, when he dismissed cryptocurrency as a "scam." But ultimately, he embraced the industry because it provided him with public acclaim and financial backing, even helping him launch his own cryptocurrency project just weeks before winning the presidency. According to two informed sources, some crypto giants, including Kraken's chief legal officer Marco Santori and David Bailey, who hosted the cryptocurrency conference in Nashville, later attended Trump's election night party in Florida.
Bailey did not respond to requests for comment. Kraken declined to comment, and Santori also refused to comment as one of the cryptocurrency executives potentially discussed for a role in Trump's transition team.
To prepare for his return to the White House, Trump has surrounded himself with several prominent cryptocurrency supporters, including Elon Musk, one of his closest tech allies and financiers, and Howard Lutnick, who has close ties to the troubled cryptocurrency Tether. Lutnick is co-chair of the presidential transition process, and Bailey, who helped Trump connect with the Bitcoin community, remains actively involved.
Lutnick's involvement, in particular, has raised concerns about potential conflicts of interest—since he is helping select leaders for federal positions that could directly impact his business as CEO of Wall Street firm Cantor Fitzgerald. For example, Lutnick has publicly acknowledged that he manages "many, many assets" of Tether, which is facing potential sanctions from the U.S. Treasury.
According to a person familiar with the cryptocurrency plans, Lutnick has engaged in some outreach to the crypto industry alongside other Trump aides, including Michael Kratsios, a former chief technology officer at the White House. Officials have spoken with at least one major cryptocurrency company about the possibility of joining a new presidential digital currency committee, which Trump has promised to establish if elected.
Another source believes the incoming administration intends to appoint a top cryptocurrency advisor in a key policy department at the White House—the National Economic Council. Additionally, the government must fill several key roles: besides the SEC, Trump also needs to 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 cryptocurrency, including its relationship with the banking system.
Some cryptocurrency executives say they have also discussed potential early executive orders or other presidential directives with Trump's aides that could help the industry, such as clarifying regulatory authority among federal agencies or conducting research to find ways for the government to further develop the cryptocurrency ecosystem. They liken it to a series of similar orders issued during Trump's first term that clarified the government's regulatory approach to the financial system under what is known as the Dodd-Frank Act.
Some of these conversations date 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 his promise to establish a national cryptocurrency reserve, preventing the U.S. government from selling the Bitcoin and other tokens it seized during past criminal investigations.
"President Trump has the House and the Senate. He has the mandate," Bailey said last week on X, although as of Monday, the AP had not announced a series of House election results, leaving the partisan control of that chamber unclear. "We have the environment to get this done in the first 100 days."
Appendix: Candidate Backgrounds
According to informed sources, candidates being considered for the U.S. Securities and Exchange Commission (SEC) and other positions include:
Daniel Gallagher: Former SEC commissioner, currently at fintech company Robinhood, responsible for regulatory affairs. Robinhood offers stock trading and cryptocurrency services, including cryptocurrency wallets.
Hester Peirce: Current Republican commissioner at the SEC, known as "Crypto Mom" for her supportive stance on cryptocurrency. She has repeatedly criticized the SEC's overly strict regulatory policies on cryptocurrency and advocates for a clearer regulatory framework to promote the industry's development.
Mark Uyeda: Current Republican commissioner at the SEC, who opposes the SEC's tough stance on the cryptocurrency industry and advocates for ending enforcement actions against registration requirements without fraud or harm allegations. He has expressed support for the development of cryptocurrency on multiple occasions, believing the SEC should provide space and clarity for industry innovation.
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