If you were hoping that President-elect Trump wouldn’t follow through on his crypto support, you may be disappointed. The United States is poised to become the “crypto capital of the planet” and perhaps the securities fraud capital of the world as President-elect Trump has reportedly begun vetting pro-crypto candidates for a series of key roles at US financial regulatory agencies.
The news comes as Bitcoin surged past $86,000 following Trump’s election last week, with other coins including Dogecoin similarly hitting new highs.
The Washington Post published a story today reporting that Trump aides are considering a combination of current regulators, former federal officials, and executives from the financial industry with ties to crypto for senior leadership roles. Among the most important agencies that regulate crypto has been the Securities and Exchange Commission, which has been targeting cryptocurrency companies for the past few years. I Submit you write:
Other names are being considered at the SEC and other positions include Daniel Gallagher, former SEC chief now at financial technology firm Robinhood, which offers crypto wallets and stock trading; and Hester Peirce and Mark Uyeda, the agency’s two Republican commissioners, the people said.
A Republican donor, Gallagher previously faulted the SEC for taking a “scorched earth” approach to crypto. Peirce and Uyeda, meanwhile, criticized their agency’s policy and enforcement actions under President Joe Biden. Peirce is seen as the interim chairman of the SEC, when Trump takes over the White House, who may later lead a federal task force on crypto policy.
Current SEC chief Gary Gensler has received criticism from crypto supporters for implementing existing crypto security regulations. Companies like Coinbase have tried to argue that existing financial regulations need to be modernized and are not compatible with new technologies like blockchain. Critics say existing securities laws are inadequate and the industry wants to play by its own rules instead. Blowups like FTX, which was considered one of the biggest financial frauds in modern history and brought down the web of other companies in the industry, put pressure on regulators to take a tougher stance on crypto. Changpeng Zhao, the former CEO of Binance, recently spent four months in prison for ignoring money laundering activities on his exchange and allowing people to trade they should not have known.
The cryptocurrency industry poured more than $130 million into the recent election across the US and has been a big supporter of President-elect Trump even though he dismissed crypto during his first term and called it a “scam.” If someone pours enough praise on Trump, it seems he will have a change of heart. He was a big supporter of Bitcoin and the crypto industry before his re-election, giving a speech at Bitcoin 2024 in Nashville and visiting a crypto-themed bar in Manhattan, where he paid for hamburgers using Bitcoin. Trump has his own NFT trading cards.
While crypto isn’t as dark as it used to be, it’s still an industry rife with fraud and lax oversight. Despite the collapse of FTX, Tether has long resisted calls to open itself up to audits, which would prove that everything is on track and there won’t be a run on the bank like what happened with FTX. USDT is the preferred payment method to be used in “pig slaughter” scams as organized networks of fraudsters abroad can easily use the currency without inspection. The US Treasury Department is considering sanctions against Tether for allowing illegal activity.
But it looks like all that money spent on political races across the US will pay off for the company and its token:
In preparation for his return to the White House, Trump is surrounded by prominent crypto supporters, including Elon Musk, one of Trump’s closest technology allies and financiers, and Howard Lutnick, who boasts close ties to the cryptocurrency Tether. Lutnick serves as co-chair of the president’s transition process, and Bailey, who helped introduce Trump to the bitcoin community, similarly remains involved.
Lutnick’s involvement in particular has raised concerns about a potential conflict of interest — as he helps select leaders who may hold key government roles that could directly affect his business as CEO of Cantor Fitzgerald, a Wall Street firm. With Tether, for example, Lutnick has publicly acknowledged that he controls “a lot of their assets.” This amount is subject to possible penalties by the Ministry of Finance.
There is one good way to look at all of this. Boomers may be taking over every available house in this country, but if crypto proponents get their way, investor protections will be thrown out the window and you’ll be able to legally bypass the old folks with your promising new crypto project PoopCoin.
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