Gary Gensler, known for his critical stance on the digital assets industry, has announced his resignation as SEC chair, coinciding with President-elect Donald Trump's inauguration. Since his appointment in 2021, Gensler has taken a stringent approach to regulating crypto, emphasizing the need to protect investors from fraud and misconduct.
Trump's administration is signaling a starkly different approach, advocating for pro-Bitcoin policies. These include proposals to establish a national Bitcoin reserve, a presidential crypto advisory council, and efforts to mine the remaining Bitcoin domestically.
These measures mark a significant departure from Trump's earlier skepticism of cryptocurrencies, where he criticized Bitcoin as a scam and a threat to the U.S. dollar. Read below to understand more about it!
Recent SEC Actions And Future Outlook
The SEC's enforcement actions in fiscal year 2024 led to $8.2 billion in fines and investor relief, though the number of cases dropped by 26% compared to the previous year.
The SEC plans to continue monitoring the crypto sector, particularly investment advisers, broker-dealers, and others involved with digital assets or related securities. The focus will be on compliance in offers, sales, trading, and recommendations involving crypto assets.
Anticipated Changes In Crypto Regulation
With crypto advocates like Scott Bessent and Howard Lutnick in key cabinet positions, market analysts expect shifts in regulatory strategies. Stuart Alderoty, Ripple's chief legal officer, has outlined priorities for the Trump administration, including the ones below:
- Ending non-fraud crypto litigation.
- Retaining crypto-friendly SEC commissioners Mark Uyeda and Hester Peirce.
- Providing regulatory clarity through safe harbors, sandboxes, and collaboration with Congress.
- Rescinding outdated frameworks like the SEC's 2019 guidance on digital assets.
Former CFTC director Dorothy DeWitt predicts a principles-based regulatory approach, targeting high-risk areas such as fraud and national security concerns. She also foresees measures like mandatory exchange registration and enhanced disclosure standards, though these changes may take over a year to implement.
Market Implications
Since Trump's electoral victory, Bitcoin prices have surged, nearing $100,000. The rally has also boosted other digital assets, signaling market optimism about a more crypto-friendly regulatory environment. The industry is waiting for concrete policy shifts; however, stakeholders are preparing for a significant but gradual transformation in the U.S. crypto landscape.
