Written by: Pzai, Foresight News
Since Trump's victory in this year's U.S. election, the 'MAGA' banner has swept through the entire cryptocurrency market with overwhelming momentum. Under the broad principle of 'America First,' Trump views cryptocurrencies as an important component of the U.S. financial system and has already begun planning to position Bitcoin as a national reserve asset. In the intense preparation of the government team, a large number of cryptocurrency-friendly bureaucrats are taking office. The Trump family is also actively participating in the on-chain economy under the name 'World Liberty Finance' (WLFI), having purchased over $75.26 million in cryptocurrency-related assets. This article aims to unravel the data from Trump's appointments and on-chain project bets to piece together the roadmap of the American 'cryptocurrency renaissance' led by Trump's team in the future.
New official taking office
In the leadership team of Trump's new government, there are many cryptocurrency-friendly individuals. In the newly established 'President's Advisory Council on Digital Assets,' the chair 'crypto czar' David Sacks, who previously served as COO at PayPal, will take on the role of AI and cryptocurrency chief 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 application Lightning Labs, Voltage, etc.). It is anticipated that under Trump's administration, cryptocurrency compliance custodial products will advance further, even seeking suitable asset exits for Bitcoin reserves.
Bo Hines, a former college football player 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 indirectly demonstrates that cryptocurrency compliance is a bottleneck that urgently needs to be addressed for the Trump administration. Moreover, the Republican advantage in the three branches of government has cleared certain obstacles for the future promotion of cryptocurrency compliance policy in the United States.
Beyond the 'direct line,' various government departments are also continuously welcoming cryptocurrency-friendly individuals. For example, in the U.S. Commodity Futures Trading Commission (CFTC), which played a crucial role in previous cryptocurrency compliance cases, popular candidates include Brian Quintenz, head of a16z’s cryptocurrency policy (who supervised U.S. cryptocurrency futures contracts), Perianne Boring (a proponent of the Bitcoin mining industry), and Caroline Pham (who proposed a principled framework in 2023 to regulate the digital asset market and tokenization).
As for the U.S. Securities and Exchange Commission (SEC), Trump's dismissal of the current chairman Gary Gensler is a foregone conclusion. He also nominated Paul Atkins as the new SEC chairman on December 4. As the CEO of consulting firm Patomak Global Partners, Paul previously served as an SEC commissioner during the George W. Bush administration and has extensive experience in finance and cryptocurrency.
He also served as co-chairman of the cryptocurrency industry advocacy group Token Alliance, criticizing the current SEC Chairman Gary Gensler's stringent regulatory policies towards the cryptocurrency industry, arguing that these policies could push the cryptocurrency industry outside the United States. He advocates for reduced regulation, emphasizing the importance of 'common-sense regulation' and free markets. Industry insiders hope that Atkins can promote a clearer regulatory framework, reduce compliance costs, and encourage innovation. Earlier, Trump also had a phone conversation with Coinbase CEO Brian Armstrong, reflecting his efforts towards cryptocurrency compliance within the U.S. framework.
On June 26, 2007, Paul Atkins (left) converses with then-SEC Chairman Christopher Cox during a House Financial Services Committee hearing on Capitol Hill in Washington, D.C.
Regarding the progress of related legal implementation, Trump plans to abolish the SAB 121 accounting announcement, which requires custodians to treat customer-held cryptocurrency assets as liabilities and report them at fair value on the balance sheet, adding financial burdens to various custodians and exchanges. Another action that Trump emphasizes terminating, Operation Choke Point 2.0, is the U.S. government's action through regulatory agencies to exert pressure on the cryptocurrency industry and restrict its access to banking services. This action is seen as a continuation of the 2013 'Operation Choke Point,' aimed at indirectly attacking specific industries through the banking system.
Under this action, agencies such as the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve released joint statements or 'pause letters,' instructing banks to stop or limit businesses related to cryptocurrencies. Many cryptocurrency companies and their founders had their bank accounts closed without reason, affecting the acceptance of cryptocurrencies by banks like Signature Bank. Additionally, Trump will continue to promote the implementation of the Financial Innovation and Technology Act (FIT 21) during his term, which clearly defines key terms such as 'digital assets,' 'blockchain systems,' and 'decentralized governance systems.' It categorizes 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, demanding digital asset issuers and exchanges to provide transparent and accurate information while establishing consumer protection clauses and dispute resolution mechanisms. This also reflects Trump's commitment to steadily paving the way for cryptocurrency compliance during his current term.
For the U.S. cryptocurrency market, its development generally aligns with compliance progress, but this process has not been smooth. Previously, 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 regulators to scrutinize the cryptocurrency industry more strictly, causing many projects to struggle with compliance issues, and the overall market progress has thus been unsatisfactory.
However, with the personnel changes and policy adjustments in key regulatory agencies such as the U.S. Commodity Futures Trading Commission (CFTC) and the SEC, the market has gradually welcomed a new turning point. In this context, some tokens can operate under a clearer regulatory framework, and compliance pathways are becoming clearer.
Taking XRP as an example, which was previously hindered by the SEC's litigation, it has gradually found a way forward with the progress of the case and improvements in the regulatory environment, restoring market confidence in it. Additionally, other tokens and projects are beginning to explore innovation under clearer rules, reducing compliance costs arising from regulatory uncertainty.
The 'barometer' role of WLFI
At the end of August this year, Eric Trump, the second son of Trump and 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 funds for the Trump family.
After some twists and turns, WLFI secured $20 million in financing during its initial issuance, but its protocol terms stating 'the Trump family is not liable for receiving 75% of the profits' have also faced some skepticism within the cryptocurrency sector. With Trump taking office, WLFI is expected to fulfill the role of 'U.S. cryptocurrency barometer' as a direct showcase of his family's choices in cryptocurrency assets.
Upon delving into WLFI's portfolio, it becomes clear that its connections also involve Trump's circle. For example, after Sun Yuchen invested $30 million in WLFI, WLFI's on-chain Bitcoin reserves were converted to WBTC (Interestingly, David Sacks also previously invested in WBTC custodian BitGo).
On the other hand, its portfolio and applications are also somewhat related to an American VC, Polychain. In WLFI, Luke Pearson, a general partner at Polychain Capital, is listed as one of the advisory team members. WLFI's deployment of Scroll itself is one of the L2s led by Polychain, and one of Scroll's founders, Sandy Peng, is also on the advisory list.
With the gradual implementation of the Trump administration's cryptocurrency policy, WLFI is expected to play a greater 'barometer' role in the future cryptocurrency market. Its asset allocation and strategic cooperation will continue to influence market trends, while potential support from professional institutions like Polychain will provide it with ongoing momentum.
In the future, WLFI may continue to invest in high-quality DeFi assets while further enhancing its brand value and market voice through collaboration with other projects. In short, WLFI, with its unique asset allocation, strategic cooperation, 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 engaging in family projects, the Trump administration is outlining a blueprint for an American 'cryptocurrency renaissance.'
From the perspective of legal compliance to close collaboration with industry leaders, Trump's cryptocurrency strategy aims not only to consolidate the United States' leadership in the global digital economy but also injects 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 are gradually implemented and the market continues to mature, the United States is following the banner of MAGA, becoming the center of the global cryptocurrency economy. Whether Trump's cryptocurrency strategy can truly achieve 'revival' is not only related to the future of the U.S. financial system but will also profoundly impact the landscape of the cryptocurrency industry. Thus, whether cryptocurrencies can ultimately reign supreme or become 'losers' on the political chessboard, we might as well wait and see the answer of history.
