Written by: Pzai, Foresight News
Since Trump's victory in this year's U.S. election, the banner of 'MAGA' has swept across the entire cryptocurrency market with overwhelming momentum. 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 make Bitcoin a national reserve asset. Amidst the busy 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), having purchased over $75.26 million in cryptocurrency-related assets. This article attempts to weave together a roadmap for the American 'cryptocurrency renaissance' led by Trump's appointed personnel and on-chain project bets.
New officials taking office
The leadership team of Trump's new government is not short of cryptocurrency-friendly individuals, and in the newly established 'Presidential Advisory Committee on Digital Assets', the chair 'Crypto Tsar' David Sacks, who previously served as COO at Paypal, will take on the role of AI and cryptocurrency supervisor 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 like Lightning Labs, Voltage, etc.). It can be 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 a seat in the North Carolina House 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 proves that cryptocurrency compliance is a bottleneck that needs to be addressed for the Trump administration. Furthermore, the Republican Party's advantageous position in the three houses of the current government has also cleared some obstacles for the future promotion of cryptocurrency compliance policies in the United States.
Outside of the 'direct line', various government departments are also continuously welcoming cryptocurrency-friendly individuals. For example, among the key candidates in the U.S. Commodity Futures Trading Commission (CFTC), which played an important role in previous cryptocurrency compliance cases, popular options include Brian Quintenz, head of crypto policy at a16z (who has supervised 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 SEC, Trump's dismissal of current chairman Gary Gensler is already a foregone conclusion. He also nominated Paul Atkins for the new SEC chair on December 4, who, as 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 industry advocacy organization Token Alliance, criticizing the current SEC Chairman Gary Gensler's tough regulatory policies on the cryptocurrency industry, arguing that these policies could push the cryptocurrency industry out of the United States, advocating for reduced regulation and emphasizing the importance of 'common-sense regulation' and free markets. Industry insiders hope 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) spoke with then-SEC Chairman Christopher Cox at a hearing of the House Financial Services Committee on Capitol Hill in Washington, D.C.
In terms of the progress of relevant legal implementations, Trump plans to abolish the SAB 121 accounting announcement, which requires custodians to treat clients' cryptocurrency assets as liabilities and to present them at fair value on the balance sheet, adding financial burdens to various custodians and exchanges. Another action that Trump emphasized the termination of, Operation Choke Point 2.0, is the U.S. government's pressure on the cryptocurrency industry through regulatory agencies to restrict its access to banking services. This action is considered a continuation of the 2013 'Operation Choke Point', aimed at indirectly attacking 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 have issued joint statements or 'pause letters' requiring banks to stop or limit cryptocurrency-related business. Many cryptocurrency companies and their founders had their accounts closed without reason by banks, affecting the cryptocurrency acceptance of 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 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, strengthening information disclosure requirements, and requiring digital asset issuers and exchanges to provide transparent and accurate information, as well as establishing consumer protection provisions and dispute resolution mechanisms. This also reflects Trump's commitment to paving the way for the steady compliance of cryptocurrency during his current term.
For the U.S. cryptocurrency market, its development is largely in sync with compliance progress, but this process has not been smooth. Previously, the outbreak of the FTX incident and its aftermath had a profound impact on the market, shaking investor confidence and exposing the shortcomings of the regulatory framework. This incident led regulators to scrutinize the cryptocurrency industry more strictly, causing many projects to struggle with compliance issues, and overall market progress has been less than satisfactory.
However, with personnel rotations and policy adjustments at key regulatory agencies such as the CFTC and SEC, the market is gradually welcoming a new turning point. Against this backdrop, some tokens are able to operate under a clearer regulatory framework, and compliance paths are becoming clearer.
For example, XRP was previously hindered by the SEC lawsuit, but as the case progressed and the regulatory environment improved, XRP gradually found its way, and market confidence in it also began to recover. In addition, other tokens and projects have started to explore innovation under clearer rules, reducing the compliance costs brought about by regulatory uncertainty.
The 'barometer' role of WLFI
At the end of August this year, Trump's second son and current executive vice president of the Trump Organization, Eric Trump, 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 a series of ups and downs, WLFI secured $20 million in funding during its initial issuance, but its agreement terms that state 'the Trump family is not liable to receive 75% of the profits' have also faced some skepticism in the cryptocurrency field. Following Trump's inauguration, WLFI is expected to serve as a direct demonstration of his family's choices in cryptocurrency targets, achieving the role of 'American cryptocurrency barometer'.
Upon delving into WLFI's portfolio, it is evident that its connections to Trump's team are also significant. Taking WBTC as an example, after Sun Yuchen invested $30 million into 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 an American VC, Polychain, and within WLFI, Luke Pearson, a general partner of 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 the founders of Scroll, Sandy Peng, is also on the advisory list.
As Trump's cryptocurrency policies gradually take shape, 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 ongoing momentum.
In the future, WLFI may continue to invest around high-quality DeFi assets while further enhancing its brand value and market voice through collaborations with other projects. In short, WLFI, with its unique asset allocation, strategic partnerships, and political influence, has become an important barometer of the U.S. cryptocurrency market. Its future development will continue to attract broad 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 '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 position 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' 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 thrive under the Trump effect or become 'losers' on the political chessboard remains to be seen in history's answer.
