Cryptocurrency Industry Anticipates Regulatory Shift Post-Election
The cryptocurrency industry is bracing for potential changes in regulatory enforcement following the upcoming US presidential election. With hopes for a more lenient approach from the White House, industry players are eyeing a possible resolution to ongoing conflicts with Wall Street’s regulatory authority. This anticipation has been fueled in part by former President Donald Trump’s recent expressions of support for the crypto sector, raising expectations of a potential shift in the US Securities and Exchange Commission’s (SEC) strict oversight under a potential Trump administration.
Under President Joe Biden’s leadership, the SEC has ramped up its regulatory actions, particularly in the wake of the FTX cryptocurrency exchange collapse in 2022. The commission has initiated numerous enforcement actions targeting exchanges and broker-dealers for non-compliance with securities regulations. This aggressive stance has led to a contentious debate over the classification of cryptocurrencies, with many crypto firms arguing against their categorization as securities subject to SEC registration, citing regulatory ambiguity.
Ongoing Legal Battles and Industry Expectations
Several high-profile legal battles involving major crypto players such as Kraken, Coinbase, and Binance remain unresolved in the courts. The SEC has also concluded investigations into Ethereum and BUSD, a cryptocurrency associated with Paxos. Of particular note is the lawsuit against Ripple, which alleges the unregistered sale of XRP tokens as securities. This claim was partially disputed by a federal judge who ruled in favor of Ripple last July, leading to optimism from Ripple’s CEO about a forthcoming resolution to the case.
Industry insiders are speculating about a potential shift in the SEC’s enforcement strategy under a renewed Trump administration, foreseeing a possible reduction in regulatory actions. However, experts caution that securities enforcement cases typically operate independently of political influences, suggesting that the election outcome may have minimal impact on ongoing litigations.
Crypto’s Growing Political Influence
The cryptocurrency industry has been flexing its political muscle, notching several wins in the primary season. Political action committees (PACs) supporting crypto interests have funded ads against prominent politicians such as Rep. Katie Porter (D-Calif.) in her Senate bid and Rep. Jamaal Bowman (D-N.Y.) in his reelection primary. This growing political involvement underscores the industry’s determination to shape its regulatory landscape.
Interestingly, crypto-holding voters tend to show a preference for Donald Trump as president. A significant number of American voters view crypto as a major election issue, a figure that political analysts argue cannot be dismissed as marginal. This trend highlights the increasing importance of cryptocurrency policy in the broader political discourse and suggests that candidates’ stances on crypto regulation could play a role in shaping voter preferences in the upcoming election.
