Trump’s Potential Return Could Ease SEC’s Stance on Bitcoin and Crypto Regulations

• The cryptocurrency industry is turning its attention to the upcoming U.S. presidential election, hoping for a regulatory shift that could ease enforcement actions and resolve long-standing disputes with the Securities and Exchange Commission (SEC).
• Former President Donald Trump has recently shown an unexpected interest in the $2.5 trillion crypto industry, even preparing to host a Bitcoin-focused fundraising event on July 27.
• Despite Trump’s previous criticisms of cryptocurrencies, his recent statements have been more favorable. Legal experts predict that a Trump victory could lead to a less aggressive stance by the SEC on digital assets.

Discover how the upcoming U.S. presidential election could reshape the regulatory landscape for cryptocurrencies, potentially ending years of clashes with the SEC.

Potential Regulatory Shift Under a New Administration

With the U.S. presidential election on the horizon, the cryptocurrency industry is eager to see if a new administration could bring about a more lenient regulatory approach. Former President Donald Trump, who has recently taken a surprisingly supportive stance towards cryptocurrencies, is set to host a Bitcoin-focused fundraising event. This marks a stark contrast to his previous administration’s critical view of digital currencies. Legal experts suggest that Trump’s re-election could lead to a significant shift in the SEC’s enforcement actions against cryptocurrencies.

Implications of a Trump Administration on SEC Policies

Michael Selig, a partner at Willkie Farr & Gallagher LLP, noted, “A Trump administration would likely attempt to reset and re-evaluate the SEC’s regulation policy concerning the crypto industry. Such a reset would naturally include resolving ongoing enforcement actions and investigations initiated by the previous administration.” Under President Joe Biden, the SEC, particularly after the collapse of the crypto exchange FTX in 2022, has intensified its scrutiny of the sector, frequently initiating enforcement actions for regulatory non-compliance.

SEC’s Current Stance and Industry Responses

SEC Chairman Gary Gensler has consistently argued that most cryptocurrencies qualify as securities and should register with the agency. This stance has been contested by numerous crypto companies, which often argue that their tokens do not constitute securities or that the registration requirements are unclear. With experts believing that a change in administration could also lead to a change in the SEC’s leadership, the potential for regulatory policy shifts looms large.

Potential Challenges and Continuity in Enforcement

Austin Campbell, a blockchain advisor and adjunct professor at Columbia Business School, stated, “If Trump is re-elected, Republicans could quickly appoint a new SEC chairman, potentially resolving many of the current cases producing variable decisions that add to market confusion.” However, not all experts share this optimistic outlook. Emily Meyers, general counsel at Electric Capital, cautioned that securities enforcement cases are typically non-partisan and unlikely to be dismissed due to political changes.

Expert Opinions on SEC’s Future Actions

Meyers added, “It’s unlikely that ongoing cases, especially those already in federal court, would be dropped. A new administration might bring fewer or different types of new crypto enforcement actions.” Ji Kim, head of legal and policy at the lobby group Crypto Council for Innovation, echoed this sentiment, suggesting that while leadership and structural changes could alter enforcement norms, guarantees are elusive.

Conclusion

As the U.S. presidential election approaches, the cryptocurrency industry remains hopeful for a more favorable regulatory environment. A potential Trump administration could lead to significant changes in the SEC’s approach to digital assets, yet experts urge caution regarding the continuity of current cases. Ultimately, the election’s outcome will play a crucial role in shaping the future trajectory of crypto regulation in the United States.