Regardless of the outcome of next week's presidential election, the SEC is likely to welcome a new chair. Traditionally, the SEC chair typically resigns when a new president takes office. Thus, whether Harris or Trump wins, the SEC's leadership may face significant changes.
According to (Unchained), supporters of Harris's campaign are pushing her to replace current chairman Gary Gensler and have begun vetting candidates. If a Harris administration were to take office, it might adopt a more crypto-friendly policy than the Biden administration to improve the regulatory environment. However, she remains cautious on key issues such as taxation, Bitcoin mining, and self-custody, and her pro-crypto stance is not as strong as Trump's.
On the other hand, Trump promised at the Bitcoin conference that upon election, he would "fire" Gensler on day one. Although he cannot legally directly fire Gensler, he does have the authority to immediately demote him to commissioner, a position that has led the crypto industry to have high expectations for Trump's regulatory policies.
Review of Trump's pro-crypto policies
The Republican Party consistently emphasizes personal freedom, which aligns well with the decentralized principles of cryptocurrencies. The Republican National Committee has pledged in its platform that Trump will defend Bitcoin mining rights and "ensure that every American has the right to self-custody digital assets and can trade freely without government surveillance." In contrast, the Democratic Party often advocates for increased government power and regulation, which may create ideological friction with the cryptocurrency community.
Related Reading: (What new opportunities will cryptocurrencies and BTCFi have if Trump wins?)
Trump has shown a strong interest in the digital asset industry, claiming his goal is to make the U.S. a "global crypto center and Bitcoin superpower." He supports Bitcoin mining and promises to protect self-custody rights. Additionally, during his campaign, Trump used Bitcoin to buy burgers for restaurant customers and criticized the SEC's tough stance on cryptocurrencies, vowing to appoint a pro-crypto chair if re-elected. Trump even launched his own DeFi project - World Liberty Financial.
Trump proposed a series of crypto policies, including:
· Establish a strategic Bitcoin reserve
Trump stated that the government will "retain all Bitcoin currently held or acquired by the U.S. government" as "the core of a strategic national Bitcoin reserve." As of October 2023, the U.S. government holds Bitcoin worth over $5 billion, primarily seized through criminal investigations. However, it remains unclear how these Bitcoin reserves will be utilized, their feasibility, and whether the crypto industry will widely accept this initiative.
· Establish a Crypto Presidential Advisory Council
Trump promised in Nashville to establish a "Bitcoin and Crypto Presidential Advisory Council," stating that the council would be composed of "industry supporters" rather than "crypto skeptics" to set the rules.
· Prohibit the Federal Reserve from issuing digital currencies
Despite many countries advancing central bank digital currencies, this trend has faced resistance within the U.S. cryptocurrency community. Although the Federal Reserve has yet to decide whether to issue a digital dollar, a report released in January 2022 detailed the potential costs and benefits of CBDCs.
Trump has repeatedly opposed this proposal, calling it a "dangerous threat to freedom." In May 2024, the House passed a bill to prohibit the Federal Reserve from issuing CBDCs, although the bill still needs further advancement to become law. It is worth noting that while Trump supports cryptocurrencies, his tariff policies could create economic uncertainty. The long-term impact of his policies on the market and the crypto industry remains to be seen.
"Crypto Mom" Hester Peirce may not serve as SEC chairman
Given that Gensler may be stepping down, the industry is looking forward to a new crypto chair taking office, with Hester Peirce, a commissioner at the SEC, currently the most vocal candidate. She is also nicknamed "Crypto Mother" within the industry.
Hester Peirce has publicly criticized Gensler's approach to regulating the industry through lawsuits rather than rule-making. On the surface, if Trump were to win the White House, she seems a likely candidate, as she has been the most vocal Republican on the commission under Gensler's leadership and presidents typically nominate chairs from their own party.
When asked in an interview what her top priority would be if she became SEC chair, Peirce's response was "to ensure the vitality of the industry, allow investors to make their own decisions, and ensure that we do not set unnecessary barriers in rule-making."
Related Reading: (Exclusive Interview with "Crypto Mom" Hester Peirce: What are her views on the future direction of SEC regulation?)
However, according to Unchained reports, four insiders who are closely connected to Peirce or frequently communicate with her revealed that Peirce does not wish to serve as SEC chair and plans to leave the commission when her term ends in June 2025. A spokesperson for Peirce's office stated, "The only thing Commissioner Peirce is considering doing after leaving is becoming a beekeeper, but even that she is somewhat hesitant about."
Insiders unanimously believe that Peirce has been making it clear for at least several months that she wishes to leave the SEC, with one insider stating that they heard of her desire to resign as far back as a year ago.
Will Harris continue the Biden administration's regulatory pressure on crypto?
During the Biden administration, the regulation of cryptocurrencies significantly intensified, with the SEC filing charges against several cryptocurrency exchanges. To address the rapid development of the crypto market, Biden signed an important executive order on digital assets, directing government agencies to strike a balance between regulation and development.
This executive order aims to ensure that digital assets find a balance between innovation and security, promoting the healthy development of the cryptocurrency market while reducing its potential systemic risks. Under these measures, the crypto industry faces increased compliance pressure, particularly in ensuring market transparency and investor protection.
In addition to direct regulation, the SEC has implemented stricter information disclosure requirements under the Biden administration, particularly in the areas of environmental, social, and governance (ESG). The new rules require listed companies to provide more information about their operational models and potential risks in response to investor concerns about corporate social responsibility and risk management. This initiative not only affects traditional companies but also indirectly impacts businesses involved with crypto assets, requiring them to disclose more operational details to the public.
Related Reading: (Why does everyone want to regulate Crypto?)
While Harris has limited statements on cryptocurrency policy, she has indicated that her administration will "encourage innovative technologies like AI and digital assets while protecting our consumers and investors." Recently, in response to lower-than-expected support among Black voters, she proposed a series of economic security plans, including a commitment to establish a cryptocurrency regulatory framework aimed at protecting Black men's investments in crypto.
However, this framework targets only Black voters, lacking clear regulatory details or specific policy positions, and is therefore criticized by the cryptocurrency community as hypocritical, believing it is merely a ploy to win votes by leveraging cryptocurrencies. The current Biden-Harris administration has taken a more confrontational regulatory approach towards the crypto industry, engaging in multiple lawsuits, restricting traditional banking services, and vetoing bipartisan legislation.
Harris's "court" is not friendly
Alex Thorn, head of research at Galaxy Research, stated that there is evidence indicating that Harris and her advisory team will continue the Biden administration's approach to cryptocurrencies. "New evidence suggests that Harris will continue to suppress cryptocurrencies; her choice of advisors indicates that she will continue Biden's hostile attitude towards cryptocurrencies, as Harris is collaborating with two key anti-crypto officials in the Biden administration, Brian Deese and Bharat Ramamurti."
To substantiate his analysis, Alex Thorn elaborated on the key evidence against cryptocurrencies presented by Brian Deese and Bharat Ramamurti. He pointed out that Brian Deese had written an article back in January 2023 that, while claiming to support innovation, actually labeled cryptocurrencies as "fraud" and "dangerous." As for Bharat Ramamurti, he has long worked alongside anti-crypto Democratic Congresswoman Elizabeth Warren and provided her with economic policy advice.
On the other hand, both Brian Deese and Bharat Ramamurti have intervened in U.S. stablecoin legislation, advocating for comprehensive regulation of stablecoins by the Federal Reserve and banks. In summary, a series of evidence indicates that both Brian Deese and Bharat Ramamurti are unfriendly towards cryptocurrencies, and Harris's choice to include them in her advisory team may signal disappointment for those in the crypto community if she ultimately wins.
Billionaire investor Mark Cuban also believes that Harris's team tends to oppose an "enforcement-based regulatory" model and seeks to promote the development of the crypto market through a clear regulatory framework. Cuban noted that Harris "prefers clear regulatory provisions rather than relying on litigation," which allows companies to avoid relocating overseas for their applications.
Other industry observers believe that even if Harris replaces Gensler, the enforcement intensity in the cryptocurrency market will not diminish. Analysts from renowned firm Bernstein predict that if Harris wins, Bitcoin's price could see a significant drop by the end of the year, potentially falling by 10%.
Note: This article is based on previous summaries published by BlockBeats.
