On the marketing campaign path, then-candidate Trump made guarantees that he would prioritize the crypto business. Anticipating these guarantees to be fulfilled, the costs of many notable crypto belongings jumped after his election. Now, President Trump has returned to the White Home, and in his first week, he wielded govt authority in an unprecedented approach. Among the many new administration’s dramatic strikes had been three developments of nice significance for the crypto business. These early strikes counsel a lighter enforcement contact and a recognition of the necessity for regulatory readability. As detailed under, these preliminary strikes lay the groundwork for what may come subsequent from the Trump administration.
SEC 2.0
On its first full day in workplace, the SEC’s Performing Chair promised that change would come. On January 21, 2025, the SEC introduced that it could be forming a activity power led by long-time-crypto-supporter Commissioner Hester Peirce (affectionately referred to within the crypto business as “crypto mother”) to “set the SEC on a wise regulatory path.”[1] The announcement promised that the SEC would depart from what it described because the SEC’s previous method of relying “totally on enforcement actions to control crypto retroactively and reactively” whereas “usually adopting novel and untested authorized interpretations alongside the way in which.” To assist carry concerning the change to SEC 2.0, the duty power will coordinate throughout the federal authorities, together with with the Commodity Futures Buying and selling Fee (CFTC), and with state and worldwide counterparts to design a regulatory framework for crypto belongings “that protects traders, facilitates capital formation, fosters market integrity, and helps innovation.”[2] Lastly, the announcement famous that, whereas the SEC would work underneath the prevailing statutory framework, it could additionally “coordinate the availability of technical help to Congress because it makes modifications to that framework.”
Undoing a Sensible Obstacle to Holding Digital Property: SAB 121 Rescinded
The SEC additionally revoked an accounting rule adopted in the course of the Biden administration that supplied sensible impediments to monetary establishments holding digital belongings. Particularly, on January 23, 2025, the SEC introduced the Workers Accounting Bulletin No. 122 (SAB 122).[3] SAB 122 rescinded SAB 121, which had required on-balance sheet accounting of crypto belongings underneath custody (recording an asset and a legal responsibility on the entities’ stability sheets), which was a vital departure from the therapy of different belongings held underneath custody and made it prohibitively expensive for monetary establishments to carry crypto belongings in gentle of leverage necessities.[4] SAB 122 will enable these establishments extra flexibility in holding crypto belongings by requiring that banks solely observe broader accounting requirements relevant to different belongings in custody. (Commissioner Peirce celebrated this variation on social media.[5] )
Trump’s Govt Order
Lastly, President Trump’s govt order associated to crypto additional signifies his willingness to collaborate with the business. On January 23, 2025, President Trump signed the chief order titled “Strengthening American Management in Digital Monetary Expertise.”[6] The acknowledged goal of this order was to “assist the accountable progress and use of digital belongings, blockchain know-how, and associated applied sciences throughout all sectors of the financial system.”[7] The chief order revoked the Biden Administration’s govt order associated to crypto, established a working group, and prohibited companies from growing central financial institution digital currencies (CBDC).[8] Biden’s govt order additionally requested for reviews from related companies and steered a CBDC could profit america.[9] Opposition to CBDC’s turned a political difficulty within the lead as much as the election, with vocal opposition from many conservatives,[10] and Trump’s govt order notably prohibits improvement of a CBDC.[11]
Just like the SEC activity power, the Trump govt order means that the brand new administration could push for a complete regulatory framework for crypto belongings. It requires a “President’s Working Group on Digital Asset Markets,” together with the Treasury Secretary, Legal professional Common, and different cabinet-level officers, that “shall suggest a Federal regulatory framework governing the issuance and operation of digital belongings, together with stablecoins, in america.”[12]
Trying Forward
If the administration succeeds in adopting such a framework, then it could carry america extra in keeping with the rising worldwide norm towards adopting crypto-specific regulatory methods—such because the European Union’s new MiCA Regulation, which got here into full power on the finish of 2024.[13] Many voices within the crypto business have lengthy referred to as for such an method in america.
Collectively, these three actions symbolize a clear shift in the direction of a extra open and accommodating crypto coverage in america. Nevertheless, none of these actions in themselves present any authorized protections for crypto. Reasonably, they set the stage for what could also be to come back.
Jenner & Block’s Markets and Trading and Fintech and Crypto Assets groups are ready to information market members by means of this growing regulatory panorama.
Footnotes
[1] “SEC Crypto 2.0: Performing Chairman Uyeda Announces Formation of New Crypto Activity Pressure,” (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.
[2] “SEC Crypto 2.0: Performing Chairman Uyeda Announces Formation of New Crypto Activity Pressure,” (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.
[3] SEC, “Workers Accounting Bulletin No. 122,” (Jan. 23, 2025), https://www.sec.gov/rules-regulations/staff-guidance/staff-accounting-bulletins/staff-accounting-bulletin-122.
[4] SEC, “Workers Accounting Bulletin No. 121,” (Mar. 31, 2022), https://www.sec.gov/regulation/staff-interpretations/accounting-bulletins/old/staff-accounting-bulletin-121.
[5] Nikhilesh De, “SEC Withdraws Controversial Crypto Monetary Reporting Bulleting,” (Jan. 24, 2025), https://www.coindesk.com/policy/2025/01/23/sec-withdraws-controversial-crypto-tax-accounting-bulletin.
[6] Exec. Order, Strengthening American Management in Digital Monetary Expertise, (Jan. 23, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/.
[7] Strengthening American Management in Digital Monetary Expertise, § 1(a).
[8] Strengthening American Management in Digital Monetary Expertise, §§ 3–5.
[9] Exec. Order No. 14067, Making certain Accountable Growth of Digital Property. (March 9, 2022), https://www.federalregister.gov/documents/2022/03/14/2022-05471/ensuring-responsible-development-of-digital-assets.
[10] See, e.g., Zachary Warmbrodt, “Conservatives rally in opposition to CBDC,” (Feb. 27, 2024), https://www.politico.com/newsletters/morning-money/2024/02/27/conservatives-rally-against-cbdc-00143465.
[11] Strengthening American Management in Digital Monetary Expertise, § 5.
[12] Strengthening American Management in Digital Monetary Expertise, § 4(c)(i).
[13] European Securities and Markets Authority, “Markets in Crypto-Property Regulation,” https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica.
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