Under Trump, the SEC Should Be Loyal to the Cryptocurrency Business
After Trump's inauguration, the US SEC will initiate a reform of the cryptocurrency market.
After Trump takes office, the US SEC will launch a reform of the cryptocurrency market. What difficulties could the new Trump administration face in developing a new policy on cryptocurrencies?
Employees of the main regulator of stock exchanges in the US, the Securities and Exchange Commission (SEC), are set to begin reviewing policies on the cryptocurrency market as early as next week, according to sources cited by Reuters. Most of the charges brought by the SEC relate to the fact that the agency equates the activities of cryptocurrency companies with trading in unregistered securities, violating US securities laws. It is expected that shortly after Donald Trump takes office, the agency will formulate clear criteria for interpreting the status of cryptocurrencies, a long-standing demand by crypto industry representatives.
Trump on X
In addition to the change in cryptocurrency policies, the regulator of US stock exchanges will begin reviewing cryptocurrency-related court cases and may suspend some cases unrelated to fraud allegations, according to Reuters sources.
Some of these cases may eventually be dropped. Although it is not known which cases are at issue, at various times the SEC has sent notices of investigation to exchanges such as Coinbase, Kraken and Crypto.com, NFT marketplace OpenSea, broker Robinhood, developers of the Immutable project, administrators of decentralised exchange Uniswap and developers of crypto wallet MetaMask, Consensys.
Cryptocurrency market participants assume that the Trump administration will attempt to revive and rethink cryptocurrency regulatory policy. This particularly concerns the actions of the SEC, which under current President Joe Biden has increased its control over the cryptocurrency market. In addition, SEC chairman Gary Gensler is known for his openly negative stance towards the crypto market: he frequently speaks of the dominance of 'scammers and fraudsters' in this sector.
During the election campaign, speaking at the Bitcoin 2024 conference in Nashville, where more than 20,000 participants had gathered, Trump promised to fire Gensler as his first action in the event of victory. However, at the end of the year, Gensler himself announced his resignation from his leadership role on the day of Trump's inauguration.
Crypto Payments
In recent years, the regulator has initiated dozens of proceedings with allegations aimed at cryptocurrency exchanges, brokers and other cryptocurrency platforms. All of these have been accused of improper registration under securities laws.
Even when the SEC approved the launch of exchange-traded funds (ETF) based on Bitcoin in the US for the first time in ten years, Gensler said his attitude towards the cryptocurrency market had not changed.
Experts believe that, with the arrival of the new administration, the SEC may drop charges against some crypto companies or find solutions for out-of-court settlements, according to Robert Cohen, a partner at law firm Davis Polk. However, Cohen added that the SEC will continue to maintain a tough approach to fraudsters and lawbreakers.
The SEC's Leadership, the Ripple Lawsuit, and the Future of Cryptocurrency Regulation
In mid-January, Gensler said he was satisfied with the commission's work, which was in line with the previous administration's requirements, according to a report by The Block.
Prior to Gensler, the SEC was headed by Jay Clayton, appointed by Trump in 2017. However, it was Clayton who initiated one of the most famous cases against Ripple Labs, the company behind the cryptocurrency XRP. Since 2020, the SEC alleges that the company has been selling unregistered securities under the cover of the XRP cryptocurrency for years.
The @SEC is raging. Ripple defended itself - "agreeing to nothing." The court gave clarity that XRP is not a security. There are no "victims" to compensate. And worst of all for the @SEC, Ripple is thriving. But at least @SEC seems to have abandoned its absurd demand for $2B. https://t.co/KVSkB9OqlH
Ripple Labs denies all SEC allegations. Ripple Labs' CEO, Brad Garlinghouse, said the company will face the SEC and stressed that the agency has not made any allegations of fraud or negligence against Ripple Labs.
As Gensler himself said, under his leadership the commission has launched about 100 investigations into crypto companies, while under Clayton the number was around 80.
The current head of the SEC, Gensler also noted that the cryptocurrency market is driven by sentiment rather than fundamentals, dividing the industry between Bitcoin and "everything else".
"I've been in finance for over four decades, and everything in the markets has always traded based on a mix of fundamentals and sentiment. But I've never seen an industry so heavily focused on sentiment and so little on fundamentals," Gensler wrote.
The crypto industry has high hopes for Donald Trump's actions, expecting the regulatory environment to improve. Experts point out that the results of the new administration's policies may not be visible immediately, but only by the spring or even summer of 2025.
"However, if investors' hopes are not realised, this could be a catalyst for a market correction. This could happen in the late spring or summer of 2025. By then, it will be clear to what extent the new presidential administration intends to deliver on the promises made by Trump during the election campaign," noted Roman Nekrasov, co-founder of the ENCRY Foundation.
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After Trump takes office, the US SEC will launch a reform of the cryptocurrency market. What difficulties could the new Trump administration face in developing a new policy on cryptocurrencies?
Employees of the main regulator of stock exchanges in the US, the Securities and Exchange Commission (SEC), are set to begin reviewing policies on the cryptocurrency market as early as next week, according to sources cited by Reuters. Most of the charges brought by the SEC relate to the fact that the agency equates the activities of cryptocurrency companies with trading in unregistered securities, violating US securities laws. It is expected that shortly after Donald Trump takes office, the agency will formulate clear criteria for interpreting the status of cryptocurrencies, a long-standing demand by crypto industry representatives.
In addition to the change in cryptocurrency policies, the regulator of US stock exchanges will begin reviewing cryptocurrency-related court cases and may suspend some cases unrelated to fraud allegations, according to Reuters sources.
Some of these cases may eventually be dropped. Although it is not known which cases are at issue, at various times the SEC has sent notices of investigation to exchanges such as Coinbase, Kraken and Crypto.com, NFT marketplace OpenSea, broker Robinhood, developers of the Immutable project, administrators of decentralised exchange Uniswap and developers of crypto wallet MetaMask, Consensys.
Cryptocurrency market participants assume that the Trump administration will attempt to revive and rethink cryptocurrency regulatory policy. This particularly concerns the actions of the SEC, which under current President Joe Biden has increased its control over the cryptocurrency market. In addition, SEC chairman Gary Gensler is known for his openly negative stance towards the crypto market: he frequently speaks of the dominance of 'scammers and fraudsters' in this sector.
During the election campaign, speaking at the Bitcoin 2024 conference in Nashville, where more than 20,000 participants had gathered, Trump promised to fire Gensler as his first action in the event of victory. However, at the end of the year, Gensler himself announced his resignation from his leadership role on the day of Trump's inauguration.
In recent years, the regulator has initiated dozens of proceedings with allegations aimed at cryptocurrency exchanges, brokers and other cryptocurrency platforms. All of these have been accused of improper registration under securities laws.
Even when the SEC approved the launch of exchange-traded funds (ETF) based on Bitcoin in the US for the first time in ten years, Gensler said his attitude towards the cryptocurrency market had not changed.
Experts believe that, with the arrival of the new administration, the SEC may drop charges against some crypto companies or find solutions for out-of-court settlements, according to Robert Cohen, a partner at law firm Davis Polk. However, Cohen added that the SEC will continue to maintain a tough approach to fraudsters and lawbreakers.
The SEC's Leadership, the Ripple Lawsuit, and the Future of Cryptocurrency Regulation
In mid-January, Gensler said he was satisfied with the commission's work, which was in line with the previous administration's requirements, according to a report by The Block.
Prior to Gensler, the SEC was headed by Jay Clayton, appointed by Trump in 2017. However, it was Clayton who initiated one of the most famous cases against Ripple Labs, the company behind the cryptocurrency XRP. Since 2020, the SEC alleges that the company has been selling unregistered securities under the cover of the XRP cryptocurrency for years.
Ripple Labs denies all SEC allegations. Ripple Labs' CEO, Brad Garlinghouse, said the company will face the SEC and stressed that the agency has not made any allegations of fraud or negligence against Ripple Labs.
As Gensler himself said, under his leadership the commission has launched about 100 investigations into crypto companies, while under Clayton the number was around 80.
The current head of the SEC, Gensler also noted that the cryptocurrency market is driven by sentiment rather than fundamentals, dividing the industry between Bitcoin and "everything else".
The crypto industry has high hopes for Donald Trump's actions, expecting the regulatory environment to improve. Experts point out that the results of the new administration's policies may not be visible immediately, but only by the spring or even summer of 2025.
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