Trump’s crypto team takes shape but questions remain over who will drive policy

WASHINGTON: US President-elect Donald Trump’s crypto policy is taking shape with the announcement of a White House crypto czar and a new securities watchdog, but questions remain over who will drive policy and whether too many cooks could slow down changes.
Trump on Thursday appeared to make good on his campaign pledge to be a ‘crypto president’, announcing he would make former top PayPal executive and crypto evangelist David Sacks “White House AI & Crypto Czar”. A day earlier, Trump said he would nominate pro-crypto Washington attorney Paul Atkins to head the Securities and Exchange Commission.
While crypto executives cheered the news, saying the pair would end the Biden administration’s crypto crackdown and promote innovation, some Washington analysts said the creation of a crypto czar, a new role, sowed ambiguity over who would drive crypto policy and flagged the potential for policy clashes.
“One big question is whether the policy will be driven by Sacks himself. A czar appointed by Trump is going to want to see changes fairly quickly, but the SEC has processes and you can’t just snap your fingers at the SEC and have new rules,” Ian Katz, managing director of Capital Alpha Partners, said in an email to Reuters. “Personalities will be important,” he added.
A Silicon Valley venture capitalist and friend of Trump billionaire backer Elon Musk, Sacks was an early bitcoin investor. In a 2017 CNBC interview, he said cryptocurrencies were revolutionising the internet, but he acknowledged there were also scammers in the sector.
He does not appear to have any experience writing or leading policy, according to a Reuters review of his background.
Atkins, meanwhile, is a former SEC official and respected veteran of Washington policy circles who has said he supports crypto innovation as way to boost financial services competition, and has helped crypto companies in their dealings with regulators via his consultancy Patomak Global Partners.
“Atkins is kind of a known quantity,” said Lene Powell, senior legal analyst at financial consultancy Wolters Kluwer. Sacks is from “a different sphere”.
Both have called for regulators to be more accommodating of crypto companies, but neither appear to have taken a position on whether and under what circumstances crypto tokens should be considered securities, commodities or utilities -- a core issue that will ultimately decide how the industry is regulated.
“I think we’ll see more constructive regulation. Obviously, that includes some clarification around what is (a) security or not,” said Chen Arad, co-founder of Solidus Labs, a crypto compliance company.
Atkins and Sacks did not immediately respond to requests for comment.
Bitcoin, the world’s largest cryptocurrency, surged past the $100,000 milestone for the first time after Trump announced Atkins as his pick to lead the SEC, buoyed by hopes that the new administration would usher in softer crypto policies.
Under President Joe Biden, the SEC has sued dozens of crypto companies, alleging they broke securities laws, while bank regulators discouraged lenders from dabbling in crypto and Congress failed to pass legislation that would help promote mainstream crypto adoption.
The crypto industry is pushing for an ambitious raft of policies that would promote adoption of digital assets, including the creation of a crypto regulatory framework which would address when tokens can be classified as securities or commodities.
Trump said in a Thursday post on his Truth Social platform that Sacks would “guide” crypto policy and “work on a legal framework so the Crypto industry has ... clarity,” leaving it unclear whether Sacks would lead the incoming administration’s crypto policy.
It was also unclear whether Sacks will lead Trump’s crypto advisory council, which is also expected to play a key role in shaping crypto policy. Reuters previously reported the crypto czar was expected to lead that body and coordinate policy among the various regulatory agencies.
That coordination will be crucial, since a crypto legal framework would need extensive input from the SEC and the Commodity Futures Trading Commission, whose new chair has yet to be announced, and may also require congressional approval, said lawyers.
Regulations on less contentious non-crypto issues such as proprietary bank trading and capital have been snarled up for years by inter-agency squabbles, they noted.
“It definitely would be a lot of cooks,” Powell said.
In an email on Friday, a Trump transition spokesperson reiterated the President-elect’s Thursday announcement in which he said Sacks would guide crypto policy, and did not answer Reuters questions seeking more details on how the role would work.
Some consumer protection advocates have expressed concern that the Trump administration’s crypto agenda might create gaps that would leave investors at risk, a fear the industry has largely dismissed.
“I don’t think there will be under-regulation,” said Anthony Scaramucci, the founder of asset manager SkyBridge, who briefly served in Trump’s first administration. “I don’t think it will create fraud, but I think it will help the United States maintain what it should be, which is our mantle of financial services leadership.”
#DonaldTrump #DavidSacks #USA #cryptomarket #CryptoNews

Donald Trump’s Crypto Czar David Sacks to Tackle Operation Choke Point 2.0

David Sacks, Trump’s crypto czar, pledges to tackle alleged banking suppression targeting cryptocurrency businesses if Trump is re-elected.
"Operation Choke Point 2.0" reportedly uses banking regulations to limit crypto access; Coinbase and others demand transparency and accountability.
Trump’s pro-crypto appointments aim to foster innovation-friendly policies, making the 2024 election pivotal for crypto regulation.
Donald Trump pledged to end the alleged Operation Choke Point 2.0 if re-elected. Central to this effort is David Sacks, one of the primary appointees serving as “crypto czar” in Trump’s pro-crypto push.
In a recent post on X (Twitter), Sacks vowed to investigate and reverse policies seen as undermining the cryptocurrency sector.
This move aligns with Trump’s commitment to ensuring fair banking practices for digital asset companies.
David Sacks to Tackle Targeted Suppression against Banks
Operation Choke Point 2.0 refers to an alleged US government strategy to curtail cryptocurrency activity by leveraging banking regulations.
The initiative came into focus in 2022 when the Federal Deposit Insurance Corporation (FDIC) reportedly pressured financial institutions to limit services to crypto firms. Sacks says this needs to be addressed.
“There are too many stories of people being hurt by Operation Choke Point 2.0. It needs to be looked at,” he said.
Coinbase recently substantiated these claims by releasing letters showing that the FDIC instructed banks to pause or cease crypto-related banking activities.
Paul Grewal, Coinbase’s Chief Legal Officer, described the findings as evidence that this was not just a conspiracy theory. He committed that Coinbase would continue pursuing transparency through legal means.
“Law-abiding American businesses should be able to access banking services without government interference,” Grewal emphasized.
Meanwhile, one of the most high-profile casualties of these policies was Silvergate Bank, once a cornerstone of crypto banking. Chris Lane, a former executive at Silvergate, described how the bank faced regulatory scrutiny despite its solvency.
Lane accused regulators of abruptly withdrawing support, effectively dismantling the business his team had built over 13 years.
“When FTX went down, Silvergate survived a 70% run on deposits. A typical bank cannot survive 20%. FTX didn’t kill us, our regulators did…Regulators came in sometime in Spring 2023 and severely limited the amount of US dollar deposits we could hold for digital asset clients There went our entire business model,” Lane stated.
The bank’s demise, he claimed, was a direct result of targeted restrictions on its ability to serve cryptocurrency clients. Against this backdrop, David Sacks, Trump’s crypto Czar, has called for a thorough investigation into Operation Choke Point 2.0.
Experts Join Trump’s Crypto-Friendly VisionWith this commitment, Sacks joins others like Charles Hoskinson, founder of Cardano, who urges the crypto industry to unite against regulatory overreach.
Hoskinson announced plans to collaborate with the incoming Trump administration to construct bipartisan policies that balance innovation with accountability.
Bitcoin investor Wayne Vaughn shares Hoskinson’s sentiment, criticizing the weaponization of the banking system.
“The US government shouldn’t weaponize the banking system against its political opponents and people that are deemed otherwise undesirable,” Vaughn asserted.
Trump’s approach to appointing pro-crypto individuals for his incumbent administration aims to deconstruct the current administration’s establishments, which include figures like Brian Deese, the alleged architect of Operation Choke Point 2.0.
By appointing pro-crypto advocates to his transition team, the president-elect aims to foster a regulatory environment conducive to digital innovation.
Crypto analysts and other key figures view the 2024 election as a pivotal moment for the industry. As crypto markets await clarity, Trump’s promises and Sacks’ leadership could reshape the regulatory market in the US for digital assets.
“The incoming administration has the opportunity to reverse so many poor crypto policy decisions. Chief among them is politically motivated regulatory decisions like Operation Choke Point 2.0,” Grewal said.
#DonaldTrump #Czar #davidsacks #cryptomarket #CryptoNews

Trump’s New AI and Crypto Czar Explained

David supported J.D. Vance for the position of Trump’s running mate in the latest US presidential election, giving Vance on his podcast in the process.
It is also speculated that David Sacks may also work closely with the SpaceX CEO, Elon Musk, who is also set to head the Department of Government Efficiency (DOGE).
Musk is constantly in contact with the policymakers of the United States to discuss the plan for supervising radical government cutting costs under the new administration.
On December 5, the newly elected president Donald Trump named David Sacks, ex-PayPal chief operating officer as White House “AI and Crypto Czar.”
The prominent entrepreneur will be responsible for advising the Trump government regarding cryptocurrency and artificial intelligence.
Trump took to a social media platform and posted that David would lead the way for the government in terms of Artificial Intelligence and cryptocurrency. Both areas are considered vital for the future of American competitiveness.
More about David Sacks
The President further went on to add that, David will protect Free Speech online and guide us away from Big Tech bias and censorship. He will also be responsible for leading a presidential council of advisors on science and technology.
It is also said that the entrepreneur is also a part of the “PayPal Mafia” team of influential tech entrepreneurs such as Elon Musk and Peter Thiel.
The team was part of PayPal’s founding era and members leveraged influence behind conservative political parties and candidates.
David supported J.D. Vance for the position of Trump’s running mate in the latest US presidential election, giving Vance on his podcast in the process.
In 2002, PayPal was launched by eBay, and after that Sacks went on to aid other tech firms such as Yammer, introduced by Microsoft.
It is also speculated that David Sacks may also work closely with the SpaceX CEO, Elon Musk, who is also set to head the Department of Government Efficiency (DOGE) in the administration of Donald Trump.
Unveiling Musk’s role
Musk is constantly in contact with the policymakers of the United States to discuss the plan for supervising radical government cutting costs under the new administration.
Trump has also rewarded Musk for backing the time of White House campaign by electing him as head of the newly created Department, DOGE along with Vivek Ramaswamy.
At the time of Trump’s election campaign, Musk promised to cut federal costs by $2 trillion.

This would demonstrate cutting total US spending by a third, almost surely meaning the ruination of social support programs, something that has never gathered strong political support.
The new role of Musk comes with raising the question of political conflict of interest.
Recently, Trump has also nominated Paul Atkins for the position of new Chairman of the Securities and Exchange Commission by replacing Gary Gensler.
He finds Atkins to be the perfect pick for the position. And, the industry is also eagerly waiting for the new appointment.
#GaryGensler #AtkinsForSEC #DonaldTrump #CryptoCzar #CryptoNews