Initial days of the Trump administration saw many moves suggesting that digital assets might not be regulated as securities. However, critics argue that much of it was performative like task forces, executive orders, and pressers without solid policy.
Experts and practitioners are disappointed because there has been no real or solid regulatory changes like new rules or clear guidelines from Trump administration. Nevertheless, the Trump administration has no doubt laid a potential foundation for more meaningful regulatory changes through shifts in enforcement and rulemaking strategies.
During Biden’s administration, ‘Operation Chokepoint 2.0’ was a major scandal which gained major attention. People claimed that the government was pressuring banks to cut off crypto companies. While some officials denied it, many crypto firms lost banking access, which sparked outrage and political debate.
Trump’s Quick Steps
Soon after taking office, Trump’s team took quick steps to fix crypto issues. Firstly, Trump quickly repealed a rule that made it hard for banks to hold digital assets. Then, on March 7, the OCC reversed a rule that forced banks to get special permission for crypto activities like custody and stablecoin reserves. Furthermore, a few weeks later, the FDIC scrapped a Biden-era rule that required banks to report their crypto plans and risks.
Acting FDIC Chair Travis Hill clarified that banks should not be punished just over “Reputational Risk.” While it may take some time to see the effects of these changes, this marks a big shift which could make it much easier for crypto companies to work with banks going forward.
Notably, the SEC has quietly dropped nearly all its ongoing cases against crypto firms. While this doesn’t set any legal precedent for the industry, but it signals that similar activities may not face enforcement at least for now.
SEC Drops Major Cases
The SEC has dropped or settled several big crypto cases, like those against Coinbase, Ripple, Cumberland DRW LLC, Consensys and Kraken, without finding them guilty. This suggests that the SEC may no longer see many crypto activities like token sales, staking, or mining as violating securities laws. While some crypto cases like those against Binance, Tron, and Gemini are still on hold.
While some SEC investigations into crypto firms were active even reaching the stage of Wells notice, but many of these investigations were dropped after Trump took office.
SEC’s recent actions speak volumes by dropping multiple lawsuits and investigations, particularly centered on exchanges, token issuances and staking. However, cases involving fraud and manipulation are still on hold, being more serious claims. But if the assets involved aren’t securities, the SEC may eventually back off there too.
Besides, the SEC also publicly said that meme coins, proof-of-work mining (even when pooled), and stablecoins backed by U.S. dollars don’t fall under its control.
This Could Just Be the Beginning
While Trump’s rapid actions might seem scattered, but together it signals a major shift in US crypto policy. It’s becoming way easier and safer to build in crypto, and this could just be the start.
In a recent move, the DOJ announced that it is officially shuting down its crypto crime unit as part of Trump’s push to make crypto regulations clearer and less strict. With Paul Atkins expected to be confirmed as the SEC Chair within days, this could mark a big shift in how the SEC could approach digital assets.
The Trump administration has taken steps to ease regulatory pressure on the crypto industry. It repealed SEC rules that restricted banks from holding crypto and reversed prior guidance requiring special permissions for crypto-related banking activities.
This was a controversial policy under the Biden administration that allegedly pressured banks to cut off crypto firms. Trump’s team took action to reverse this by removing restrictions and guidance that had created those pressures.
