Written by: Pzai, Foresight News
Since Trump won the U.S. election this year, the flag of 'MAGA' has swept through the entire cryptocurrency market with overwhelming force. Under the principle of America First, Trump views cryptocurrency as an important component of the U.S. financial system and has already begun planning to designate Bitcoin as a national reserve asset. Amid the intense preparations of the government team, a large number of cryptocurrency-friendly bureaucrats have taken office. The Trump family is also actively participating in the on-chain economy under the name 'World Liberty Finance' (WLFI) and has purchased over $75.26 million in cryptocurrency-related assets. This article aims to piece together a roadmap for the future 'cryptocurrency renaissance' led by Trump's team from the data of Trump's appointments and on-chain project bets.
Newly appointed official
Among the leadership team of Trump's new administration are many cryptocurrency-friendly individuals. In the newly established 'Presidential Advisory Committee on Digital Assets', chairman 'Crypto Tsar' David Sacks, who previously served as COO at PayPal, will take on the role of AI and cryptocurrency director for the U.S. government. In his personal and Craft Ventures investment history, most projects are related to cryptocurrency asset management and Bitcoin infrastructure (such as cryptocurrency asset management BitGo and Bitwise, Lightning Network applications Lightning Labs, Voltage, etc.). It can be expected that under Trump's administration, cryptocurrency compliance custodial products will advance further, even seeking suitable asset outlets for Bitcoin reserves.
Former college football player Bo Hines, who has run for the North Carolina House of Representatives twice and graduated from Yale University and Wake Forest University School of Law, will become the executive director of the committee. Although Hines has no relevant cryptocurrency experience, such an appointment also indirectly proves that for the Trump administration, cryptocurrency compliance is a bottleneck that needs to be addressed. Moreover, the Republican Party's advantage in the three branches of government in this administration has cleared some obstacles for the future promotion of cryptocurrency compliance policies in the United States.
Beyond the 'direct line', government departments are continuously welcoming cryptocurrency-friendly individuals. For example, among the popular candidates in the Commodity Futures Trading Commission (CFTC), which played an important role in previous cryptocurrency compliance cases, are Brian Quintenz (responsible for overseeing U.S. cryptocurrency futures contracts), Perianne Boring (an advocate for the Bitcoin mining industry), and Caroline Pham (who proposed a principled framework for regulating the digital asset market and tokenization in 2023).
As for the Securities and Exchange Commission (SEC), Trump's dismissal of the current chairman Gary Gensler is already a done deal. He also nominated Paul Atkins as the new chairman of the SEC on December 4, who, as the CEO of consulting firm Patomak Global Partners, previously served as an SEC commissioner during the George W. Bush administration and has extensive experience in finance and cryptocurrency.
He has also served as co-chair of the cryptocurrency advocacy organization Token Alliance, criticizing the current SEC chairman Gary Gensler's tough regulatory policies on the cryptocurrency industry, arguing that these policies may push the cryptocurrency industry out of the United States and advocating for reduced regulation, emphasizing the importance of 'common-sense regulation' and free markets. Industry participants hope that Atkins can promote a clearer regulatory framework, reduce compliance costs, and encourage innovation. Earlier, Trump also communicated with Coinbase CEO Brian Armstrong over the phone, reflecting his efforts in cryptocurrency compliance within the U.S. framework.
On June 26, 2007, Paul Atkins (left) spoke with then-SEC chairman Christopher Cox at a House Financial Services Committee hearing on Capitol Hill in Washington, D.C.
In terms of the progress of relevant legal implementations, Trump plans to repeal the SAB 121 accounting announcement, which requires custodians to treat cryptocurrency assets held by clients as liabilities and list them at fair value on the balance sheet, adding financial burdens to various custodians and exchanges. Another action that Trump emphasized to terminate is Operation Choke Point 2.0, which is the U.S. government's effort through regulatory agencies to impose pressure on the cryptocurrency industry, limiting its access to banking services. This action is seen as a continuation of the 2013 'Operation Choke Point', aimed at indirectly targeting specific industries through the banking system.
Under this action, institutions such as the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve issued joint statements or 'pause letters' requesting banks to stop or restrict businesses related to cryptocurrency. Many cryptocurrency companies and their founders had their bank accounts closed without reason, affecting the cryptocurrency acceptance of banks like Signature Bank. Additionally, Trump will continue to promote the implementation of the 21st Century Financial Innovation and Technology Act (FIT 21) during his term, which clarifies the definitions of key terms such as 'digital assets', 'blockchain systems', and 'decentralized governance systems', categorizing digital assets into three types: restricted digital assets (similar to securities), digital commodities, and licensed payment stablecoins, delineating clear boundaries for the regulatory responsibilities of the SEC and CFTC, and strengthening information disclosure requirements, requiring digital asset issuers and exchanges to provide transparent and accurate information and establish consumer protection clauses and dispute resolution mechanisms. This also reflects Trump's determination to lay the groundwork for steady compliance of cryptocurrencies during this term.
For the U.S. cryptocurrency market, its development has generally been in sync with compliance progress, but this process has not been smooth sailing. Previously, the outbreak of the FTX incident and its aftermath had a profound impact on the market, shaking investor confidence and exposing the inadequacies of the regulatory framework. This incident led regulatory agencies to tighten their scrutiny of the cryptocurrency industry, making it difficult for many projects to address compliance issues, and overall market progress has also suffered as a result.
However, with the personnel rotation and policy adjustments of key regulatory agencies such as the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), the market has gradually ushered in a new turning point. Against this backdrop, some tokens are able to operate under a clearer regulatory framework, and compliance pathways are becoming increasingly clear.
Taking XRP as an example, it had previously been hampered by the SEC's lawsuit, but as the case progressed and the regulatory environment improved, XRP gradually found a way out, and market confidence in it was restored. In addition, other tokens and projects began to explore innovation under clearer rules, reducing compliance costs brought about by regulatory uncertainty.
The 'barometer' role of WLFI
At the end of August this year, Trump's second son, Eric Trump, the current executive vice president of the Trump Organization, announced the official launch of the cryptocurrency project WLFI, which has been active on-chain. This project was previously seen as a potential source of campaign funding for the Trump family.
After a series of ups and downs, WLFI secured $20 million in financing during its initial offering, but the clause in its agreement stating 'the Trump family is not liable for 75% of the profits' has also faced some scrutiny within the cryptocurrency field. With Trump's administration, WLFI is expected to serve as a direct display of his family's choice of cryptocurrency targets, anticipated to fulfill the role of 'the American cryptocurrency barometer'.
Upon examining the WLFI Portfolio, it is evident that it is also closely related to Trump's team. Taking WBTC as an example, after Sun Yuchen invested $30 million in WLFI, WLFI's on-chain Bitcoin reserves were converted into WBTC (interestingly, David Sacks also invested in WBTC custodian BitGo).
On the other hand, its Portfolio and applications are also somewhat related to a U.S. VC, Polychain. Within WLFI, Luke Pearson, a general partner at Polychain Capital, is listed as a member of the advisory team. The Scroll deployed by WLFI is one of the Layer 2s led by Polychain, and one of Scroll's founders, Sandy Peng, is also on the advisory list.
As the Trump administration's cryptocurrency policies gradually take shape, WLFI is expected to play a more significant 'barometer' role in the future cryptocurrency market. Its asset allocation and strategic partnerships will continue to influence market trends, and potential support from professional institutions like Polychain will provide it with ongoing momentum.
In the future, WLFI may continue to invest around high-quality DeFi assets while enhancing its brand value and market voice through collaborations with other projects. In summary, WLFI, with its unique asset allocation, strategic partnerships, and political influence, has become an important barometer in the U.S. cryptocurrency market. Its future development will continue to attract widespread market attention and provide important reference signals for investors.
Conclusion
Trump's victory has brought unprecedented development opportunities to the U.S. cryptocurrency industry. By appointing cryptocurrency-friendly individuals, promoting compliance policies, and actively participating in family projects, the Trump administration is outlining a blueprint for an American-style 'cryptocurrency renaissance'.
From the perspective of legal compliance to close cooperation with industry leaders, Trump's cryptocurrency strategy aims not only to consolidate the U.S. leadership in the global digital economy but also to inject new vitality into the standardization and innovation of the cryptocurrency market.
However, this path to revival is not without challenges. In the future, as policies gradually take shape and the market matures, the U.S. is following the MAGA banner to become the center of the global cryptocurrency economy. Whether Trump's cryptocurrency strategy can truly achieve 'revival' not only concerns the future of the U.S. financial system but will also profoundly impact the landscape of the cryptocurrency industry. Therefore, whether cryptocurrencies can ride the Trump effect to eventually reign supreme or become 'losers' on the political chessboard remains to be seen.
