Trump’s New SEC Aims for Major Crypto Regulatory Overhaul, Aims to Suspend Enforcement

Last year, the crypto market saw a significant rebound following Donald Trump’s victory in the presidential election. This push has been driven by Trump’s pro-crypto behavior and his commitment to positioning the United States as a leader in the crypto industry. Now, as expected, Trump’s newly appointed SEC is preparing to update cryptocurrency policies, potentially as early as next week.

The US crypto market is subject to clear regulations

Republican leaders at the U.S. Securities and Exchange Commission (SEC) plan to update their cryptocurrency policies soon, possibly by next week, Reuters reports. This change is expected to coincide with the inauguration of Donald Trump as president.

Commissioners Hester Peirce and Mark Uyeda are seeking to begin a process that could lead to clear rules or guidelines on when a cryptocurrency is considered a security. They also plan to review some ongoing court cases regarding cryptocurrencies, according to Reuters.

These expected changes align with the views of Paul Atkins, Trump’s pick to chair the SEC. Atkins, who previously served as SEC commissioner, is known for his favorable views on cryptocurrency. He is expected to ease strict crypto regulations implemented by President Biden’s Democratic SEC Chairman Gary Gensler. Gensler announced he would resign on January 20, the day Trump takes office.

Under Gensler’s leadership, the SEC responded to concerns about fraud and market manipulation by taking legal action against major cryptocurrency companies like Coinbase and Kraken. The SEC has claimed that these crypto tokens are similar to securities and therefore should comply with their regulations. Additionally, some of these cases involved accusations of fraud.

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Trump’s SEC to review crypto cases

In the first days of the new administration, the SEC intends to review some court cases and may discontinue those that are not the subject of fraud complaints, with the possibility of dismissing some cases later.

Many involved argue that cryptocurrencies are closer to commodities than securities and it is unclear when SEC regulations should apply. They requested new SEC rules to define when a token is a security. Commissioners Peirce and Uyeda plan to begin this rulemaking by first seeking input from industry and the public.

The SEC is expected to soon remove accounting rules that make it very costly for publicly traded companies to hold cryptocurrency tokens for others. Additionally, according to Reuters, President Trump, who promised to be a “cryptocurrency president” during his campaign and solicited cryptocurrency donations, will likely issue executive orders asking regulators to reevaluate their policies in cryptocurrency matter.

Last month, Bitcoin hit a new high, surpassing $108,000, which made many people optimistic about the future of the cryptocurrency. Crypto industry leaders hope the new administration will work with them to create clear rules instead of regulating through enforcement.

The planned nomination of cryptocurrency proponent Paul Atkins to head the Securities and Exchange Commission could significantly help achieve this goal.