The US Securities and Exchange Commission is said to be signaling a rethink of its policy regarding cryptocurrency in light of plans for D. Trump, U.S. President-elect, to take office next week. A report by Reuters says that this rethink may be a reconsideration of ongoing enforcement actions, including potential scaling down of the strict measures put in during Gary Gensler’s tenure as the outgoing SEC Chair.
SEC Cryptocurrency Policy Shift Under Trump Administration
The expected shift in the SEC comes largely from the outspoken voices of its two Republican commissioners, Hester Peirce and Mark Uyeda, who have called for a more lenient regulation of cryptocurrency. With their eventual majority of politically appointed SEC commissioners, Peirce and Uyeda will now be introducing classifications for cryptocurrencies, as well as when to deem digital assets to be securities.
Under Gensler, the SEC has brought 83 enforcement actions related to crypto, including against Coinbase and Kraken. The agency’s position often treated many tokens as securities, which put them under strict regulatory compliance. However, Peirce and Uyeda have criticized this approach, arguing that many cryptocurrencies function more like commodities than securities.
The new government will probably review any pending enforcement action and even freeze or withdraw cases in which fraud allegations are not involved. This development has been celebrated by all those who have, for a long time, called for more transparent regulations in the space of crypto.
Paul Atkins and the Future of Crypto-Friendly SEC Policies
The keen observer of the change is Paul Atkins, the man who President Trump has nominated as the newest Chairman of the SEC; that’s because Atkins is crypto-friendly. Although the Senate right now hasn’t ratified Atkins’ appointment, his influence is clearly visible in everything. Policy-directionwise, Pier and Uyeda are getting closer. This creates a strong relationship of both commissioners with Atkins, thereby giving a possible impetus to shift to large-scale compliance in the regulation of digital assets.
Rescinding SAB No. 121: Potential Relief for Public Companies
Another important area that the SEC is focusing on under the new administration is rescinding SAB No. 121. This was issued in March 2022, which requires public companies to recognize digital assets held on behalf of customers as liabilities on their balance sheets with corresponding assets of the same amount.
SAB No. 121 may improve transparency and reduce risks concerning digital asset safeguarding; nonetheless, it has received criticisms as it increases operational costs for companies in the crypto custody provision. The industry feels the rescinding of this bulletin would make any forays into the crypto custody sector more attractive for many firms.
Changes in SEC Enforcement Actions Against Cryptocurrency Firms
Most likely, the SEC will get public and industry feedback as it works on shaping new rules. The overall deterrent to finalizing comprehensive regulations will, however, take months or longer. The new administration will probably tend to prioritize undermining other impediments while also contemplating many executive orders around the issue of crypto de-banking.
Conclusion
Potential rule changes at the SEC under President Trump represent a tipping point for crypto regulation across the range of US states. Such possibilities may inspire a more positive attitude toward digital assets while the agency reviews its policy and enforcement. A balance between regulatory relief and investor protection must always remain at the crux of these discussions.
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FAQs
What can we anticipate from the SEC under President Trump?
The agency is expected to reassess its cryptocurrency policies and roll back strict enforcement actions taken under outgoing Chair Gary Gensler.
Who are Hester Peirce and Mark Uyeda?
Hester Peirce and Mark Uyeda are two Republican SEC commissioners known for advocating for a more lenient approach in cryptocurrency regulation.
What was SAB No. 121?
SAB No. 121 raised operating costs for enterprises that provide crypto custody services by requiring public companies to declare digital assets maintained on behalf of clients as liabilities on their balance sheets.
