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Executive Actions and Their Implications
U.S. President Donald Trump’s inauguration as the 47th President marks a significant shift in governmental direction, particularly concerning cryptocurrency. Following his swearing-in, Trump wasted no time, signing numerous executive orders that will shape the landscape of crypto regulation.
Why This Matters
The actions taken by the Trump administration and Republican lawmakers in the early days of this new Congress set the stage for the future of cryptocurrency policy in the United States. As these initiatives unfold, they will provide insight into how the administration plans to handle this rapidly evolving sector.
Key Developments
While we will explore these developments in detail later, here’s a brief overview of some crucial actions taken by the Trump administration:
Establishment of a Crypto Working Group
One of Trump’s first executive orders specifically focused on cryptocurrency. Among its key provisions are:
– Formation of a working group that includes Cabinet officials and White House advisors, tasked with reviewing existing regulations concerning cryptocurrency and recommending necessary changes. This group will be chaired by David Sacks, a prominent figure in both AI and cryptocurrency sectors.
– The working group will also evaluate the potential for a digital asset stockpile.
– A ban on central bank digital currencies (CBDCs), which are defined broadly under the new order.
– Revocation of former President Joe Biden’s executive order regarding cryptocurrency, which primarily directed various departments to prepare reports on crypto and consumer protections.
In addition to these measures, Sacks was appointed co-chair of the President’s Council of Advisors on Science and Technology.
Securities and Exchange Commission Moves
Under Acting Chair Mark Uyeda, the U.S. Securities and Exchange Commission (SEC) has initiated a crypto-focused task force led by Commissioner Hester Peirce. One of the first significant actions taken by the SEC was the rescindment of Staff Accounting Bulletin 121, which had mandated publicly traded companies to report their crypto holdings on their balance sheets. This change has been welcomed by the crypto industry, which argued that the previous rule hindered banks from offering certain crypto services.
Commodity Futures Trading Commission Updates
The Commodity Futures Trading Commission (CFTC), currently under Acting Chair Caroline Pham, has appointed Senior Policy Advisor Harry Jung as its lead for crypto industry engagement. Trump has yet to nominate a permanent chair for the CFTC.
Pardoning of Ross Ulbricht
In a controversial move, Trump pardoned Silk Road creator Ross Ulbricht, citing support from the Libertarian Movement and a personal appeal from Ulbricht’s mother. Ulbricht had been serving a double life sentence for crimes related to his operation of the dark web marketplace.
Rebranding and International Engagement
Trump announced the rebranding of the U.S. Digital Service to the Department of Government Efficiency, now overseen by Elon Musk. The department’s initial website showcased the Dogecoin logo, indicating a playful nod to crypto culture. Trump also had a conversation with El Salvador’s President Nayib Bukele shortly after signing his crypto executive order, although details of their discussion regarding cryptocurrency were not disclosed.
Senate Developments
In the Senate, significant movements include the establishment of a subcommittee focused on digital assets, chaired by Senator Cynthia Lummis (R-Wyo.). Other members include newly-elected representatives who have garnered substantial financial backing from the crypto sector. The Senate Banking Committee is set to hold a hearing on crypto-related topics on February 5, with details forthcoming.
On another front, Senator Ted Cruz (R-Texas) has introduced a resolution to overturn recent IRS regulations regarding crypto brokers, which have faced backlash for imposing heavy compliance burdens on developers.
House of Representatives Actions
The House Oversight Committee has initiated an investigation into whether banks have de-banked cryptocurrency companies at the behest of the government. Meanwhile, the House Financial Services Committee has scheduled two hearings in February to address banking practices and the future of digital assets.
Additional Developments in Crypto
Coinbase is seeking court intervention to clarify whether on-platform crypto trades are classified as securities. Meanwhile, Ethereum’s core development team is undergoing internal disputes, and Ledger’s co-founder faced a kidnapping incident, highlighting the risks associated with crypto ownership.
Upcoming Events
This week, the 10th Circuit Court of Appeals will hear arguments in Custodia Bank’s case against the Federal Reserve. The outcome could have implications for crypto banking practices moving forward.
Stay Tuned
For further updates, insights, and discussions on the evolving world of cryptocurrency, feel free to reach out or join the conversation on Telegram. Your thoughts and feedback are welcome as we navigate this dynamic landscape together. See you next week!
