Written by: Pzai, Foresight News
Since Trump's victory in this year's U.S. election, the "MAGA" banner has swept through the entire crypto market with tremendous 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 treat Bitcoin as a national reserve asset. Amidst the intense preparations by the government team, a large number of crypto-friendly bureaucrats have taken office. The Trump family is also actively participating in the on-chain economy under the identity of "World Liberty Finance" (WLFI) and has purchased over $75.26 million in crypto-related assets. This article seeks to unravel the data from Trump's appointments and on-chain project bets to piece together a roadmap for the American "crypto renaissance" led by Trump's team in the future.
New official takes office
The leadership team of Trump's new administration includes many crypto-friendly individuals, and in the newly established "Presidential Advisory Committee on Digital Assets," chairman "Crypto Czar" David Sacks, who previously served as COO at PayPal, will take on the role of AI and crypto chief for the U.S. government. In his personal and Craft Ventures' investment history, most projects are related to crypto asset management and Bitcoin infrastructure (such as crypto asset management BitGo and Bitwise, Lightning Labs for the Lightning Network application, Voltage, etc.). It is expected that after Trump's inauguration, crypto compliance custodial products will advance further, even seeking appropriate asset exits for Bitcoin reserves.
Bo Hines, a former college football player who previously ran for a seat in 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 lacks relevant cryptocurrency experience, such an appointment indirectly demonstrates that crypto compliance is a bottleneck that the Trump administration urgently needs to address. Moreover, the Republican Party's advantageous position in both chambers of Congress clears certain obstacles for future U.S. efforts to promote crypto compliance policies.
Beyond the "inner circle," various government departments are also seeing an influx of crypto-friendly individuals. For instance, among the prominent candidates in the U.S. Commodity Futures Trading Commission (CFTC), which played an important role in previous crypto compliance cases, are Brian Quintenz (head of crypto policy at a16z, who supervised U.S. crypto futures contracts), Perianne Boring (a proponent of 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 SEC, it is virtually a done deal that Trump will fire the current chairman Gary Gensler, and he has also nominated Paul Atkins for the new SEC chairman on December 4th. As the CEO of the 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 has also served as co-chair of the crypto industry advocacy organization Token Alliance, criticizing the current SEC Chairman Gary Gensler's tough regulatory policies on the cryptocurrency industry, arguing that such policies could push the crypto industry out of the U.S. He advocates for reduced regulation, emphasizing the importance of "common-sense regulation" and free markets. Industry insiders hope that Atkins will be able to drive a more clear regulatory framework, reduce compliance costs, and encourage innovation. Earlier, Trump also had a phone conversation with Coinbase CEO Brian Armstrong, reflecting his efforts in crypto compliance within the U.S. framework.
On June 26, 2007, Paul Atkins (left) speaks with then-SEC chairman Christopher Cox during a hearing of the House Financial Services Committee at Capitol Hill in Washington, D.C.
In relation to the progress of relevant legal implementations, Trump plans to abolish SAB 121 accounting announcement, which requires custodians to treat customer-held cryptocurrency assets as liabilities and disclose them at fair value on the balance sheet, thereby adding financial burdens to various custodians and exchanges. Another action emphasized by Trump to terminate, Operation Choke Point 2.0, is an effort by the U.S. government through regulatory agencies to exert pressure on the cryptocurrency industry, restricting 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, agencies 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 "cease and desist letters," requiring banks to stop or limit business related to cryptocurrency. Many cryptocurrency companies and their founders had their accounts closed by banks without reason, impacting the crypto 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 definitions for 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 SEC and CFTC regulatory responsibilities while strengthening information disclosure requirements, demanding transparency and accuracy from digital asset issuers and exchanges, and establishing consumer protection clauses and dispute resolution mechanisms. This also reflects Trump's intention to lay the groundwork for steady compliance of cryptocurrencies during this term.
For the U.S. crypto market, its development generally aligns with compliance progress, but this process is not without its challenges. The previous FTX incident and its aftermath had a profound impact on the market, shaking investor confidence and exposing shortcomings in the regulatory framework. This incident led to stricter scrutiny of the cryptocurrency industry by regulatory agencies, making compliance a struggle for many projects, resulting in unsatisfactory overall market progress.
However, with key regulatory agencies such as the CFTC and SEC undergoing personnel changes and policy adjustments, the market is gradually welcoming new opportunities. In this context, some tokens are able to operate under a clearer regulatory framework, with compliance pathways becoming increasingly evident.
Taking XRP as an example, which had previously been hampered by the SEC's lawsuit, it has gradually found its way as the case progresses and the regulatory environment improves, restoring some market confidence. In addition, other tokens and projects are also 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, Trump's second son and current executive vice president of the Trump Organization, announced the official launch of the crypto project WLFI, which has been actively engaging in on-chain activities. This project was previously seen as a potential source of campaign funding for the Trump family.
After a series of twists and turns, WLFI secured $20 million in funding during its initial offering, but the provision in its agreement stating that "the Trump family is not responsible for receiving 75% of the profits" faced some skepticism in the crypto space. Following Trump's inauguration, WLFI is expected to serve as a direct demonstration of his family's choice in crypto assets, aiming to establish itself as the "U.S. crypto barometer."
Upon delving into WLFI's portfolio, it is evident that it is closely related to Trump's team. For instance, after Sun Yuchen invested $30 million in WLFI, WLFI's on-chain Bitcoin reserves were converted to WBTC (interestingly, David Sacks also invested in the WBTC custodian BitGo).
On the other hand, WLFI's portfolio and applications are also somewhat related to a U.S. VC, Polychain. In WLFI, Luke Pearson, a general partner of Polychain Capital, is listed as a member of the advisory team. Additionally, Scroll, which WLFI deployed, is one of the Layer 2 projects 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 crypto policy, WLFI is expected to play a larger "barometer" role in the future crypto market. Its asset allocation and strategic partnerships will continue to influence market trends, while potential support from professional institutions like Polychain will provide ongoing momentum.
In the future, WLFI may continue to invest in high-quality DeFi assets while further enhancing its brand value and market influence through collaboration with other projects. In short, WLFI, with its unique asset allocation, strategic partnerships, and political influence, has become an important barometer in the U.S. crypto market. Its future development will continue to attract widespread market attention and provide significant reference signals for investors.
Conclusion
Trump's election victory has brought unprecedented development opportunities to the U.S. cryptocurrency industry. Through appointing crypto-friendly individuals, promoting compliance policies, and actively involving family projects, the Trump administration is outlining a blueprint for an American "crypto renaissance."
From the perspective of legal compliance to close cooperation with industry leaders, Trump's crypto 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 are gradually implemented and the market matures, the U.S. is following the MAGA banner, becoming the center of the global crypto economy. Whether Trump's crypto 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 crypto industry. Thus, whether cryptocurrencies can ultimately reign under the Trump effect or become the "losers" on the political chessboard remains to be seen as history unfolds.