Donald Trump seems to be getting ready to dramatically reshape the federal government’s approach when it comes to the crypto industry.

His incoming administration appears to be filled with appointees, advisors, and characters who support the sector’s growth and he seems to be already laying the groundwork to make changes to the leadership of financial agencies.

These plans align with his promises to the sector as Trump vowed to make America the “crypto capital of the planet.”

Among the most critical transitions that we may witness after January, Trump could ask for the resignation of the current leaders of the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and the appointment of a new head for the Treasury Department.

The List of Crypto-Friendly Candidates is Quite Long

At the top of the list of potential position-fillers is Scott Bessent, the founder of Key Square Group and a former C-level officer at Soros Fund Management. Bessent is considered the frontrunner for a critical job in Trump’s cabinet and for his economic agenda as he may be the country’s next Treasury Secretary.

Bessent is considered a “pro-crypto” candidate and his recent statements following Trump’s win indicate that this is the case. He recently stated that “crypto is about freedom, and the crypto economy is here to stay.”

 

John Paulson has also been mentioned among the candidates that could take over this role. However, he has not been explicitly supportive of the crypto sector and has even criticized Bitcoin investments, citing concerns about the cryptocurrency’s lack of intrinsic value.

Trump may opt to overlook these comments the two are well-acquainted and the president elect has made it clear that he wants droves of Wall Street figures in his government. Paulsen has lead a successful hedge fund for years and was close to Trump in 2016 when he served as his economic adviser.

Beyond the Treasury Department, Trump’s cabinet may also include a number of pro-crypto figures who have previously served at the SEC. These include:

  • Daniel Gallagher, a former SEC official who now works at the financial technology firm Robinhood, which offers crypto trading capabilities. Gallagher has criticized the agency’s “scorched earth” approach to crypto regulation.
  • Hester Peirce and Mark Uyeda, two Republican commissioners at the SEC who have been outspoken critics of the agency’s crackdown on the crypto industry under the Biden administration.
  • Paul Atkins, a former SEC commissioner who aided Trump’s previous transition team, and Chris Giancarlo, a former CFTC commissioner known as “Crypto Dad” for his pro-digital asset stance.

“The commission’s war on crypto must end, including crypto enforcement actions solely based on a failure to register with no allegation of fraud or harm,” Uyeda told Fox Business earlier this month. “President Trump and the American electorate have sent a clear message. Starting in 2025, the SEC’s role is to carry out that mandate.”

The goal, according to those familiar with the transition discussions, is to install regulators who will take a much different approach when it comes to crypto, rolling back enforcement actions and providing the industry with greater regulatory clarity.

“I think it’s clear this is an area they intend to continue to focus on. I think Trump and a bunch of people realize there’s a new set of technologies that are likely to define the next couple of decades,” commented Brad Garlinghouse, the head of the U.S.-based blockchain company Ripple.

Gensler May Be Asked to Resign Soon – Will He Say Yes?

These appointments would probably change the current stance that these agencies have embraced under the leadership of figures like Gary Gensler, who has taken dozens of crypto businesses to court including well-established companies like Coinbase and Kraken.

Trump promised to remove Gensler from office. One of the most controversial arguments made by the agency involved the classification of many cryptocurrencies as securities – a decision that has been criticized by crypto leaders, categorizing the strategy as “regulation by enforcement.”

The incoming administration seeks to be more permissive – at least that’s what Trump sold during the campaign – and executives within the industry expect that they will have much more clarity about regulatory matters.

“A lot of industry, I think a lot of companies, say they want to be regulated when their objective is actually anything but,” said Paul Grewal, the chief legal officer for Coinbase. “There is specific legislation in the Congress right now that we believe would protect investors, and frankly, resolve some of the ambiguities.”

The stakes are high, as the collapse of the popular crypto exchange, FTX, showcased the risks that can emerge from regulatory uncertainty and lax oversight of companies within this sector. Trump’s pro-crypto appointments could aim to strike a balance between fostering and promoting innovation and growth while ensuring the stability of the financial system and the protection of investors’ and consumers’ rights.

Despite the heated rhetoric, Trump won’t be able to get rid of Gensler that easily. Same as Jerome Powell, the head of the Federal Reserve, the current leader of the SEC may say “no” if Trump asks for his resignation.

If that happens, it will be nearly two years until his term expires, at which point Trump may have lost the credibility and support of a sector that was critical to his reelection.

Gensler did provide hints that he may be willing to step aside. During a conference in Las Vegas, he stated: “Democracies have consequences, but we’re going to continue to do that which we do well at the SEC until, as I say, the ref calls the whistle.”

He added: “Traditionally, presidents decide who chairs the SEC. That’s a good part of democracy.”

Crypto Industry Invested Hundreds of Millions to Get Pro-Crypto Candidates Elected

The crypto sector became one of the most powerful networks of donors in the 2024 election. It contributed no less than $200 million in donations to make sure their preferred candidates were elected to the US House of Representatives and Senate to advance their legislative agenda.

The results were apparently positive as estimates point to 250 pro-crypto candidates winning their respective seats during the congressional race. House and Senate-level races are generally more sensitive to the influences of donor money than presidential elections and the crypto industry flooded a number of these important races with millions of dollars each.

Some notable wins include Bernie Moreno’s victory over Sherrod Brown in Ohio. His achievement effectively ousted the head of the critical Banking Committee, Sherrod Brown, while Dave McKormick dethroned Bob Casey in Pennsylvania – a member of the Senate’s Committee on Finance.

“Across the ballot and on both sides of the aisle, crypto won this election,” said Faryar Shirzad, Coinbase’s Chief Policy Officer. He added, “With millions of crypto owners casting their ballots, and dozens of high-profile races converging around crypto and financial reform, this new Congress and the incoming Trump administration understand that the crypto voter is real, energized, and ready to demand change from their elected officials.”

The market’s reaction to Trump’s victory highlights the public’s enthusiasm for a more crypto-friendly federal government. Bitcoin has surged past $80,000 per token for the first time in history, while shares of major crypto companies like Coinbase, MicroStrategy, and a group of Bitcoin mining firms have all posted double-digit gains after the election.

“President Trump’s win is particularly advantageous for crypto,” said Chris Giancarlo, the former CFTC chairman and founder of the Digital Dollar Project. “This is now about the return of innovation in America and a return to the American spirit and imagination.”

A Balanced Approach is Needed to Protect Investors and the Public from Fraud

Despite the industry’s electoral triumphs and the prospect of a more accommodating regulatory environment, the sector still needs to overcome a few hurdles.

The incoming Trump administration will still need to tackle real and existing issues concerning investor protection, market manipulation, and the integration of crypto into the traditional financial system. Removing much of the current crypto regulations could be extremely detrimental to investors if their interests aren’t protected.

“This is an industry that is extremely volatile, where people take big losses, where market manipulation by insiders is very prevalent,” warned Patrick Woodall, the managing director for policy at Americans for Financial Reform, a consumer advocacy group.

The Trump team will also have to carefully navigate the legal complexities of dealing with seating leaders of financial regulatory agencies who were all confirmed by the US Senate and who may resist any attempts to remove them.

Moreover, the industry’s legislative agenda, which includes measures to provide more regulatory clarity, may face resistance from Democrats who are concerned that such efforts could leave consumers more vulnerable to fraud and abuse. Given that fraud and abuse is already rampant in the crypto industry, much more work is needed.

Nonetheless, the crypto sector is optimistic that the Trump administration’s approach will advocate for a significant departure from the status quo.

“The environment is there for us to get this done in the first 100 days,” said David Bailey, who organized the Bitcoin Conference where Trump made his pro-crypto pitch to the industry.

As the new administration takes shape, all eyes will be on these important appointments and policy decisions as they will shape the future of cryptocurrencies in the United States.