In a bold move signaling a new era for digital assets, President Trump recently issued an Executive Order to establish a Crypto Council, spearheaded by investor and entrepreneur David Sacks. This initiative, combined with the repeal of SAB 121—a previous policy that complicated banks’ ability to custody crypto assets—highlights the administration’s commitment to dismantling obstacles that hinder crypto adoption.
With this council, there lies a significant chance to reverse the detrimental impacts on the crypto industry that occurred during the previous administration. Instead of fostering a climate of regulatory hostility, Trump’s Crypto Council has the potential to pave the way for innovation, responsible oversight, and, most importantly, the protection of retail investors who significantly contributed to his election victory.
The Importance of Retail Investor Representation
Historically, retail investors, often seen as the backbone of the crypto movement, have been sidelined in policymaking discussions. The past four years have witnessed a concerted effort, particularly from figures like Senator Elizabeth Warren and former SEC Chair Gary Gensler, to marginalize these investors while imposing stringent regulations. The coordinated “Chokepoint 2.0” initiative aimed to sever crypto companies from the banking system, depriving them of essential financial services and driving many retail investors to riskier offshore alternatives.
Many retail investors have suffered due to these misguided policies. As a pro bono attorney representing 75,000 XRP holders in the Ripple case, I have seen firsthand the challenges faced by everyday Americans in navigating an uncertain regulatory landscape. The Crypto Council must not allow itself to be dominated by industry elites; it must include advocates who genuinely understand the impact of policy on average investors. It is crucial for those with lived experiences to have a seat at the table, ensuring that the voices of retail investors are heard and considered in decision-making processes.
A Strategic Legislative Agenda for the Future
The current administration has a unique opportunity to enact transformative crypto legislation that promotes growth and safeguards investor rights. As the midterm elections approach, timely action is essential. Several pressing areas need immediate attention:
1. **Stablecoin Legislation**: Develop a framework that encourages the use of U.S. Treasuries and streamlines cross-border payments, making stablecoins reliable tools for global commerce and financial inclusion.
2. **Market Structure Reform**: Clearly define the authority of the Commodity Futures Trading Commission (CFTC) regarding digital assets and establish guidelines for determining when a token should be classified as a security, under SEC jurisdiction.
3. **Centralized Exchange Oversight**: Mandate that centralized exchanges separate customer funds from corporate assets, ensuring that customer funds are legally protected during bankruptcy proceedings. Additionally, exchanges should maintain 100% reserves, prohibit the rehypothecation of customer funds, and implement safeguards for leverage trading to protect retail investors from undue risks.
4. **Tax Policy Reform**: Update outdated tax laws that classify the use of crypto for everyday transactions as taxable events. Small transactions should not trigger capital gains taxes, enabling more fluid usage of digital currencies.
A Call for Inclusive Governance
The effectiveness of the Crypto Council hinges on the diversity of voices it includes. If it becomes an exclusive forum for industry executives and venture capitalists, it risks failing in its mission to create equitable and inclusive policies.
Retail investors, who utilize digital assets for various purposes ranging from payments to investment, deserve representation in this dialogue. They are not just stakeholders but also voters whose support was crucial for the current administration’s success. Their interests must be prioritized alongside those of large institutions.
As an advocate for everyday Americans, I urge David Sacks, Bo Hines, and the administration to ensure that the Crypto Council reflects a broad range of perspectives, not just those of the wealthiest and most influential. By getting this right, we have the potential to position the United States as a leading force in digital asset innovation while protecting the rights of those who drive this industry forward.
Establishing clear and predictable regulations will not only benefit retail investors but also stimulate innovation and bolster economic growth in the U.S. Many promising crypto projects have relocated overseas due to regulatory ambiguity. A well-structured legal framework can attract these innovators back to the U.S., ensuring the country remains at the forefront of financial technology.
This is our moment to create a system that fosters trust, fairness, and economic opportunity while embracing an America First approach. We must seize this opportunity and not let it slip away.
