President Trump Positioning Government with Favorable Cryptocurrency Advocates Already
If you were anticipating President-elect Trump wouldn't adhere to his crypto support, you might be disillusioned. The United States is on the brink of becoming the "crypto heaven of the planet" and possibly the center of securities fraud worldwide, as President-elect Trump reportedly reviews pro-crypto applicants for crucial roles in U.S. financial regulatory bodies.
This news surfaces as Bitcoin surged past $86,000 post-Trump's election, and other coins like Dogecoin also hit new heights.
As reported by The Washington Post, Trump's aides are contemplating a mix of current regulators, ex-federal officials, and top brass from the financial sector, all with crypto ties, for top-level positions. Among the key agencies regulating crypto, the Securities and Exchange Commission (SEC) has been singled out, often targeting cryptocurrency companies in recent years. The Post notes:
Some figures under consideration for the SEC and other positions include Daniel Gallagher, a former SEC official now at the fintech firm Robinhood, which offers crypto wallets alongside stock trading; and Hester Peirce and Mark Uyeda, two Republican commissioners at the agency, according to sources.
Previously critical of the SEC's tough stance on crypto, Gallagher served as a Republican donor. Peirce and Uyeda, meanwhile, have criticized the agency's policies and enforcement actions under President Joe Biden. Petra Peirce is projected to be an interim chair of the SEC post-Trump's inauguration, who may later lead a federal task force on crypto policy.
The SEC's current chief, Gary Gensler, has received backlash from crypto advocates for applying existing securities laws to crypto. Companies like Coinbase argue that existing financial regulations need to be updated to accommodate new technology like blockchain. Critics argue that existing securities laws are sufficient and the industry is merely seeking to set its own rules. Blowups similar to FTX, considered one of the largest financial scams in history, have put pressure on regulators to toughen their stance on crypto. Changpeng Zhao, the former CEO of Binance, recently spent four months in prison for dismissing money laundering activities on his platform and allowing unauthorized trading.
Having pumped over $130 million into the recent U.S. elections, the cryptocurrency industry has been a significant backer of President-elect Trump, despite his dismissive attitude towards crypto during his first term, labeling it a "scam." Anyone lavishing enough praise on Trump seems to influence his views. In the run-up to his re-election, Trump was an ardent supporter of Bitcoin and the crypto industry, delivering a speech at Bitcoin 2024 in Nashville and visiting a crypto-themed bar in Manhattan, where he paid for hamburgers using Bitcoin. Trump even has his own NFT trading cards.
Though crypto isn't as seedy as it used to be, it remains an industry with widespread fraud and limited oversight. Besides the FTX collapse, Tether has consistently rejected calls for audits, fearing a run on the bank like the one that brought down FTX. USDT is frequently used in "pig butchering" scams, with organized networks of scammers taking advantage of the currency's loose regulation. The U.S. Treasury Department is considering imposing sanctions on Tether for enabling illicit activity.
However, the money spent on political campaigns across the U.S. appears to have paid off for Tether and USDT:
In anticipation of returning to the White House, Trump has positioned himself with prominent crypto supporters, including Elon Musk, a key tech ally and financier of Trump, and Howard Lutnick, who boasts close relations with troubled cryptocurrency Tether. Lutnick serves as co-chair of the presidential transition process, while Bailey, who introduced Trump to the bitcoin community, remains engaged.
Lutnick's involvement, in particular, has raised concerns about potential conflicts of interest, as he can influence the selection of top federal officials, which in turn could impact his own business as CEO of Cantor Fitzgerald. Tether, for example, has acknowledged that Lutnick manages "many, many of their assets." Tether is potentially facing sanctions from the Treasury Department.
In summary, the crypto industry's investment in political campaigns across the U.S. looks set to pay off, with President-elect Trump surrounding himself with crypto supporters, including Elon Musk and Howard Lutnick. The crypto-proponents' push for investor protection deregulation could lead to legal avenues for exploiting vulnerable investors with new projects like PoopCoin.
In this new tech-driven future, the Securities and Exchange Commission (SEC) might see significant changes with potential figures like Daniel Gallagher, Hester Peirce, and Mark Uyeda, all with crypto ties, under consideration for top positions. The crypto industry's influence on political campaigns, as demonstrated by Trump's proximity to Elon Musk and Howard Lutnick, could potentially shape the regulatory landscape, possibly leading to deregulation that could benefit new projects.
