During a Bitcoin conference recently, former U.S. President Donald Trump electrified the crowd by pledging to fire Securities and Exchange Commission (SEC) Chair Gary Gensler if re-elected. Gensler, a known skeptic of cryptocurrencies, has led the SEC’s aggressive enforcement actions against the industry, including major exchanges like Coinbase, Binance, and Kraken. Trump’s promise was met with enthusiastic applause, with the former president expressing surprise at Gensler’s unpopularity.

Trump’s stance represents a significant shift from his previous criticism of cryptocurrencies as a “scam.” Now, he appears to be courting the crypto industry, receiving substantial donations from supporters eager to see an end to Gensler’s crackdown. The current SEC Chair, appointed by President Biden, has argued that most crypto tokens function as securities and should be regulated accordingly, a view supported by lower courts.

A Trump administration could potentially usher in a more crypto-friendly regulatory environment. Industry advocates hope for the appointment of individuals sympathetic to their cause, such as Hester Peirce, a current SEC commissioner known for her pro-crypto stance. Other potential candidates include Brian Brooks and Chris Giancarlo, both of whom served in Trump’s first administration and have expressed support for a more permissive approach to crypto regulation.

One of the industry’s key goals is to overturn SEC guidance that requires public companies to account for crypto assets as liabilities. This rule has been a significant hurdle for banks, which must hold substantial capital against these liabilities. A new SEC chair could also advance proposals for a “safe harbor” that would allow crypto tokens to be issued and traded without the stringent requirements of SEC registration, an idea Peirce has supported.

Giancarlo, nicknamed “Crypto Dad” for his support of the industry, highlighted the need for a pause in enforcement actions, especially in cases without investor harm, manipulation, or fraud. He argued that this would allow time for the development of a more fitting regulatory framework in collaboration with Congress.

However, any changes to SEC policy would depend on the composition of the commission, currently dominated by Gensler and two other Democrats who are also critical of crypto. While Trump could replace Gensler with another commissioner, the remaining members would need to agree on any significant policy shifts. Nonetheless, the former president’s campaign has signaled a willingness to remove “obstacles and unnecessary burdens” for the crypto industry, setting the stage for potentially significant regulatory changes.

(Adapted from Reuters.com)