Crypto Titans Bet On Donald Trump’s Win For SEC Shake-Up

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As a seasoned researcher with extensive experience in financial markets and regulatory policies, I have closely followed the evolving relationship between cryptocurrencies and the Securities and Exchange Commission (SEC) under the current administration. The ongoing regulatory tension between the industry and the SEC, led by Chair Gary Gensler, has been a topic of intense debate and speculation, particularly with the upcoming 2024 US presidential election in mind.

As the 2024 US presidential election draws near, cryptocurrency pioneers are bracing for potential shifts in regulatory supervision should Donald Trump secure another term in the White House. The crypto sector has expressed discontent with the current administration’s rigid stance, spearheaded by the Securities and Exchange Commission (SEC) under Chair Gary Gensler. Consequently, there is growing optimism among crypto supporters that a second Trump presidency might result in a more permissive regulatory landscape.

How Donald Trump’s Win Could Reshape Crypto Regulations

Michael Selig, a partner at Willkie Farr & Gallagher LLP, proposes that a second Trump administration may bring about a change in the Securities and Exchange Commission (SEC)’s cryptocurrency regulatory approach. This shift could result in the resolution of ongoing enforcement actions and investigations started during the Biden administration. The crypto community generally anticipates less regulatory scrutiny under another Trump term.

 

As a researcher studying financial regulations under President Joe Biden’s administration, I have observed an increased focus on the cryptocurrency sector by the Securities and Exchange Commission (SEC). This heightened scrutiny came in the wake of the collapse of FTX exchange towards the end of 2022. The SEC has taken a firm stance against non-compliance with securities laws, leading them to pursue several enforcement actions against exchanges and broker-dealers within this industry.

Gensler, head of the Securities and Exchange Commission (SEC), has stated that several cryptocurrencies meet the definition of securities and are thus obligated to follow SEC registration procedures. This viewpoint has led to debate in the crypto sector.

Significant legal disputes between major cryptocurrency players such as Ripple, Coinbase, Kraken, and Binance continue to be unresolved. The SEC has recently concluded investigations into Ethereum and Binance USD (BUSD), a stablecoin backed by the US dollar issued by Paxos. Yet, the question of whether certain tokens should be considered securities under the law remains a topic of ongoing debate.

The SEC’s legal action against Ripple Labs Inc. is significant because it claims that Ripple illegally sold XRP tokens as unregistered securities, amassing over $1.3 billion in the process.

Last summer, a federal judge decided that XRP sales to regular investors didn’t involve investment contracts. Nevertheless, the final result of this case is still up in the air. Ripple’s CEO, Brad Garlinghouse, has hinted that a conclusion may be imminent, stating, “We anticipate a resolution will come soon.”

SEC Reform After Trump Win?

The possibility of Donald Trump winning the election has sparked discussions about potential changes at the Securities and Exchange Commission (SEC). Austin Campbell, who is a blockchain consultant and an adjunct professor at Columbia Business School, noted that a new administration could quickly bring about new leadership at the SEC.

“Campbell anticipates that a Trump victory in the election would allow the Republicans to appoint a new chair, which could result in a resolution of numerous ongoing cases and bring an end to the unpredictable judgments causing confusion.”

Some experts issue a note of caution, warning against the assumption that a Trump presidency would necessarily bring about substantial changes in enforcement practices. In the perspective of Emily Meyers, General Counsel at Electric Capital, securities enforcement cases are generally considered “apolitical” and not susceptible to major personnel shifts with political transitions.

“Meyers noted in a Bloomberg article that it’s uncommon for legal proceedings currently in progress to be abandoned, especially when they’re being debated in federal court.” Instead, she proposed that a new administration might prioritize distinct types of enforcement cases rather than terminating ongoing ones.

Hester Pierce To Replace Gary Gensler?

Just like Ji Kim, the chief legal and policy officer at the Crypto Council for Innovation, shares this perspective. He thinks that any modifications to the regulatory landscape under the Donald Trump administration are contingent upon the incoming leadership and the SEC commissioners’ makeup.

“Should President Trump be reelected and Chair Gensler resign, there’s a possibility that the current approach to regulation through enforcement might shift,” Kim explained. Yet, he cautioned, “The outcome would hinge on the new leadership and commissioners – nothing is set in stone.”

During a recent interview, Rep. French Hill expressed his belief that Hester Peirce could potentially replace Gary Gensler as chair of the Securities and Exchange Commission (SEC) following a Trump victory in the presidential election. Pierce herself acknowledged the historical trend of the SEC chairman changing with each new presidency. However, she remained cautious about predicting who would take over from Gensler.

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2024-07-20 17:26