Jesse Powell, co-founder and chairman of cryptocurrency exchange Kraken, recently donated $1 million worth of Ether (ETH) to Donald Trump’s U.S. presidential campaign.

Powell announced the donation on social media X and expressed his appreciation for Trump's support for the cryptocurrency industry.

Powell believes that the United States needs to unite behind a candidate who supports cryptocurrency to maintain its leading position in blockchain technology. At the same time, he criticized local American leaders, including Senator Elizabeth Warren and SEC Chairman Gary Gensler, accusing them of imposing too many restrictions and regulatory pressures on the local cryptocurrency industry.

Regulatory challenges for the U.S. cryptocurrency industry

Senator Warren is a well-known cryptocurrency critic who has taken steps on several occasions to introduce strict legislation to regulate the U.S. cryptocurrency industry.

Just last year, Senator Warren proposed the Digital Asset Anti-Money Laundering Act, which aims to impose strict regulatory measures on the cryptocurrency industry.

If the bill is approved, it will have a profound impact on many aspects of the cryptocurrency industry. Specifically, the bill will expand the scope of the Bank Secrecy Act (BSA) and extend the responsibilities set out therein, including but not limited to Know Your Customer (KYC) requirements, to all types of participants in the cryptocurrency network.

This means that roles such as wallet providers, miners, and validators will need to comply with regulatory standards similar to those of traditional financial institutions. They may need to implement more stringent customer identification and source of funds review procedures to prevent money laundering and other illegal financial activities.

However, such an expansion would significantly increase compliance costs and operational complexity for the cryptocurrency industry. At the same time, it may also have a certain impact on the anonymity and decentralized nature of cryptocurrencies, as more transactions and activities will need to be conducted under a regulatory framework.

However, this could also bring some positive effects, such as improving the overall credibility of the cryptocurrency industry and attracting more institutional investors and users. Through enhanced supervision, consumers can be better protected and risks such as fraud and theft can be reduced.

On the other hand, the SEC, under Gensler’s leadership, has filed lawsuits against multiple cryptocurrency entities, accusing them of offering unregistered securities, including Coinbase, Binance, Ripple, and Kraken’s parent company Payward Ventures.

Nonetheless, the Kraken co-founder said the Biden administration is allowing for “unfettered enforcement” of the cryptocurrency industry despite bipartisan efforts in Congress to create clear rules for the industry. He insisted that this approach undermines U.S. competitiveness because other major economies have clear cryptocurrency laws.

Trump's stance on cryptocurrencies

In contrast, Trump has a positive stance on cryptocurrencies. It has been reported that Trump has promised to protect Bitcoin from attacks by critics such as Warren and said that he would not allow the creation of a central bank digital currency (CBDC) in the United States. This stance has been supported by some important figures in the cryptocurrency community, who hope that Trump's policies will bring a more relaxed development environment to the cryptocurrency industry.

For example, Kraken co-founder Jesse Powell and Gemini co-founders Tyler and Cameron Winklevoss agree with Trump’s position and believe that if Trump wins the next election, it may put an end to the current government’s excessive intervention and hostility towards the cryptocurrency industry.

All three have expressed their support for Trump through donations: Powell donated $1 million worth of Ethereum, while the Winklevoss twins each donated $1 million in Bitcoin to Trump's campaign.

Trump also promised to protect Bitcoin from critics such as Senator Elizabeth Warren and made it clear that the central bank digital currency (CBDC) will not be promoted in the United States. This commitment shows that Trump is willing to provide a more relaxed and friendly development environment for the cryptocurrency industry.

Conclusion:

The development of the cryptocurrency industry is at a critical crossroads, and political stances and regulatory policies may have a profound impact on its future. Jesse Powell and the Winklevoss brothers' support for Trump, as well as Trump's positive attitude towards cryptocurrency, have brought a glimmer of hope for relaxed regulation in the industry. If this trend is realized, it may provide more fertile soil for innovation and growth of cryptocurrency.

At the same time, the industry also needs to make more efforts in self-discipline and compliance to ensure that while pursuing technological progress and market expansion, consumer rights and financial security are not sacrificed. By building a more transparent and responsible industry ecosystem, cryptocurrencies can be better integrated into the mainstream economy and realize their huge potential to change the financial world.
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