1. Trump's attitude towards cryptocurrency has changed dramatically
1. From viewing cryptocurrency as a scam to promising to build the United States into a “crypto capital”, why did Trump’s attitude change?
There may be many reasons for Trump's change of attitude towards cryptocurrencies. On the one hand, the rapid development and expanding influence of the cryptocurrency market in recent years make it difficult to ignore. As more and more investors and institutions enter the crypto field, its position in the global financial market is gradually improving. Trump may have recognized this trend and realized that he could win the support of some voters by supporting cryptocurrencies.
On the other hand, political considerations may also play an important role. In a competitive election environment, Trump needs to constantly find new support groups. As a group with a certain size and influence, the votes of cryptocurrency enthusiasts may have an important impact on the election results. By promising to build the "crypto capital" of the United States and establish a "national strategic bitcoin reserve", Trump can attract the attention and support of these voters.
In addition, changes in the global economic situation may also prompt Trump to adjust his attitude towards cryptocurrencies. As an emerging financial tool, cryptocurrencies are seen by some as a potential solution to the various challenges facing the traditional financial system. Trump may have seen the potential value of cryptocurrencies in the economic field and thus changed his views.
2. Trump launches a new crypto company in an attempt to win votes from crypto enthusiasts.
Although Trump's new crypto company World Liberty Financial has attracted widespread attention, the move clearly shows his positive attitude towards the cryptocurrency field and aims to win votes from crypto enthusiasts.
According to Fortune magazine, data on the Polymarket platform shows that the crypto market believes that Trump has a 59% chance of winning. This shows that the cryptocurrency community has a high level of support for Trump. Trump's new crypto company may further enhance his influence in this group.
However, this move by Trump has also sparked some controversy. Some people have expressed doubts about the reliability and legitimacy of the new crypto company, believing that Trump's motives may not only be to support the cryptocurrency industry, but also to consider personal interests. For example, there is a view that Trump's launch of a new crypto company may be to gain more financial support in the election.
Despite the controversy, Trump's new crypto company has undoubtedly brought new attention and discussion to the cryptocurrency industry. As the US election approaches in November, the cryptocurrency industry will closely watch Trump's actions, hoping that he can bring a more favorable policy environment to the industry.
2. Differences in encryption policies between the Biden administration and the Trump administration
1. The Biden administration launched a comprehensive crackdown on crypto companies, and the FTX and Binance incidents had far-reaching impacts
The Biden administration has launched a full-scale crackdown on crypto companies in recent years. In March, FTX founder and CEO Sam Bankman-Fried was sentenced to 25 years in prison for fraud, stealing billions of dollars from customers around the world, many of whom are still trying to get their money back. Then in April, Zhao Changpeng, the founder of Binance, the world's largest crypto exchange, was sentenced to four months in prison and the company paid a $4.3 billion (£3.2 billion) fine. He admitted allowing criminals, child abusers and terrorists to register on his platform to launder money, and the case was brought by the US Department of Justice. The US Securities and Exchange Commission (SEC) also filed a case against Binance. Last year, financial regulators took a record 46 enforcement actions against companies trying to profit from the emerging technology.
The collapse of FTX could spark a host of potential issues. The collapse of FTX, one of the world's largest cryptocurrency exchanges, this week has brought back memories of the "Lehman moment" - the collapse of investment bank Lehman Brothers in 2008 that triggered the global financial crisis. Will FTX's collapse trigger a wider market failure, just as the collapse of Lehman Brothers in 2008 did? Are FTX's customers and their funds still protected? Will the regulatory outlook for cryptocurrencies tighten? This series of events has caused a severe blow to the global cryptocurrency market, adding to the turmoil in financial markets already shaken by the uncertainty of the results of the US midterm elections.
2. Trump wants to make the United States the "global cryptocurrency capital", a sharp contrast
Trump has pledged to make the United States the "cryptocurrency capital of the world" and create a "National Strategic Bitcoin Reserve" similar to the U.S. government's gold reserves in an effort to win votes from crypto enthusiasts. Trump's new enthusiasm stands in stark contrast to the Biden administration.
Trump proposes a national strategic reserve of cryptocurrency: "Never sell your Bitcoin!" He said that it will become the policy of his government to own all the Bitcoin that the US government currently or will acquire in the future, which will actually become the core of the US strategic Bitcoin reserve. He called virtual currency "the steel industry more than 100 years ago" and said that virtual currency will be mined in the United States instead of being manufactured in other countries. He also promised to submit a detailed plan in the coming time to make the United States the "capital of the world's cryptocurrency" and make the United States a Bitcoin superpower.
Trump's full support for the cryptocurrency industry is the opposite of the situation during his presidency, which characterized virtual currencies as "fraud" and viewed them with skepticism. The US media commented that the virtual currency industry, which hopes to relax restrictions, actively sponsored Trump in this election to make him friendly to the industry. The Biden administration has been actively promoting regulation to prevent virtual currencies from being abused in areas such as fraud or illegal financing and to protect consumers. The two have obvious differences in encryption policies.
3. Harris’s ambiguous stance on cryptocurrency
1. Harris has said little about cryptocurrency, but his advisors’ comments have raised industry expectations.
Harris hasn’t said much about cryptocurrencies, leaving the industry confused about her stance. However, one of her advisers said last month that she would “support policies that ensure emerging technologies and the industry can continue to grow.” The statement, while vague, gave cryptocurrency bosses hope for a brighter future no matter who wins in November.
2. Harris team meets with industry executives, bringing hope but position remains unclear.
In the past month, key White House officials held their second meeting with crypto industry executives. Attendees included California Democratic Rep. Ro Khanna, U.S. Treasury Undersecretary Wally Adeyemo, National Economic Council Director Lael Brainard, White House Deputy Chief of Staff Bruce Reed, and other officials, as well as Ripple executives Brad Garlinghouse and Chris Larsen, Uniswap CEO Hayden Adams, Stellar Development Foundation Denelle Dixon, Circle CEO Jeremy Allaire, billionaire Mark Cuban, Coinbase Chief Legal Officer Paul Grewal, and former White House Communications Director Anthony Scaramucci.
There was some "complaint venting" at the meeting, but attendees also discussed use cases and policy outcomes for the crypto industry. Coinbase Chief Legal Officer Paul Grewal called on the White House to support legislation to regulate the cryptocurrency industry and said Harris is a new face in the cryptocurrency field and a perfect candidate to break away from the Democratic Party's harsh policies in the past.
However, despite meetings between Harris’ team and industry executives, her stance on cryptocurrencies remains unclear, and the crypto industry is still waiting for her to make clearer statements and specific policy measures to determine the future direction.
4. Current status and challenges of the cryptocurrency industry
1. The cryptocurrency industry has been accused of being full of fraud, and the SEC chairman has severely criticized it.
The cryptocurrency industry is "full of fraud, charlatans and scammers," Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), told the BBC. He explained that rules forcing companies looking to raise money from the public to "share certain information with them" have been in place since the SEC was founded and are intended to protect investors.
Gensler noted that cryptocurrencies make up only a small portion of U.S. and global capital markets, but they could undermine the trust of ordinary investors in capital markets. For example, the imprisonment of cryptocurrency boss Sam Bankman-Fried reflects the worst of the crypto industry. "This is an area that has developed, and just because they record their crypto assets on a new accounting ledger, they [wrongly] say 'we don't think we want to comply with time-tested laws.'"
SEC Chairman Gensler also said that cryptocurrencies are rife with fraud, abuse and threats to national security. "This asset class is rife with fraud, deception and abuse in certain applications. There is a lot of hype and deception about how crypto assets work. In many cases, investors do not have access to rigorous, balanced and complete information." He is particularly concerned about stablecoins, believing that about 75% of cryptocurrency transactions involve some kind of stablecoin, and that these platforms may help those who seek to circumvent a range of public policy goals, avoid the traditional banking system, anti-money laundering and tax compliance sanctions, thereby threatening U.S. national security.
2. Regulatory developments and challenges of cryptocurrencies in the United States and Europe.
In the U.S., a bill to regulate cryptocurrencies has been passed by the House of Representatives but has yet to be passed by the Senate. Critics argue that it would reduce consumer protections. Coinbase’s Grewal supports the bill and said, “This industry is not shying away from regulation.” He added that the industry simply wants the same standards applied to cryptocurrencies as other assets, “no stricter, but no looser.”
The U.S. crackdown on cryptocurrencies this year has also been echoed in Europe, as the Securities and Exchange Commission (SEC) has been highly critical of some cryptocurrency companies. In April, the European Union agreed on new laws aimed at reducing the risk of cryptocurrencies being exploited by criminals. However, other regulators have been slower to act. The Group of Twenty (G20) is developing minimum standards for cryptocurrencies, but these are not legally binding and implementation has been slow.
The European Union has passed the world's first comprehensive regulation on cryptocurrencies, the Crypto-Asset Market Regulation, which is expected to be implemented in the EU in July 2024. The regulation greatly protects the rights and interests of investors, requiring crypto-asset service providers to protect customers' digital wallets and be responsible for any losses in investors' crypto assets. The regulation also strengthens supervision of crypto-asset transactions to make them more closely aligned with traditional financial practices, thereby playing a role in combating illegal activities such as money laundering.
The cryptocurrency market faces many challenges. Legal supervision is difficult, and the anonymity and cross-border nature of transactions make it easy for it to be used for illegal activities. The security risks are high, and cryptocurrency exchanges, wallets and other systems are vulnerable to hacker attacks. The market is volatile and prices fluctuate violently, and its feasibility as a payment tool is questioned. Technical challenges also restrict market development. Limitations on transaction speed and capacity expansion issues are bottlenecks to market development. In addition, the market lacks unified standards and norms, making it difficult for investors and institutions to make effective comparisons and evaluations.
5. Crypto Industry Actions in Elections
1. The crypto industry made huge donations in an attempt to influence the U.S. elections and elect sympathetic lawmakers.
With the November US elections approaching, the cryptocurrency industry senses an opportunity to elect lawmakers sympathetic to the industry. By last month, the industry had spent a record $119 million on donations. Among them, Coinbase and Ripple became the main donors. According to a report by consumer advocacy group Public Citizen, crypto companies dominated the industry's US political spending in 2024, accounting for 48% of total corporate donations so far this year ($248 million so far). Coinbase alone contributed $50 million, and Ripple donated a total of $49 million.
The crypto industry has pushed for a bill that would limit the SEC's oversight of the industry. It has also lobbied for a bill to create a comprehensive regulatory framework for its assets. Most of the donations went to Fairshake PAC, a nonpartisan political action committee dedicated to electing pro-cryptocurrency candidates and defeating cryptocurrency skeptics. Fairshake PAC has raised $202.9 million, with more than half of the money coming from companies that would benefit from the PAC's efforts, primarily Coinbase and Ripple.
2. The purpose of industry donations has sparked controversy, and consumer rights organizations have raised criticisms.
The purpose of the crypto industry's huge donations has sparked controversy. Rick Claypool, research director of the consumer advocacy group, said the money was used to "help elect candidates who support cryptocurrencies and attack critics of cryptocurrencies, regardless of political affiliation." He added that they spend more on corporate donations than any other industry as they try to get the U.S. Congress to yield to their demands for less regulation and weaken consumer protections.
Public Citizen called the surge in crypto donations "unprecedented," adding that crypto spending is second only to the fossil fuel industry, which has spent $162 million over the past 14 years. Rick Claypool noted that "the fact that crypto companies like Coinbase and Ripple were able to spend over $100 million to silence critics of crypto and boost their supporters exemplifies the disastrous Supreme Court decision in Citizens United. Corporations can't vote, but the only reason crypto is a hot topic this election cycle is because crypto businesses are spending eye-popping amounts of money to make themselves impossible to ignore."
In the case of Citizens United v. Federal Election Commission, the Supreme Court ruled that the government cannot restrict campaign spending by companies and outside groups. Supporters believe that this is in line with the principle of freedom of speech, while opponents believe that this ruling will cause a large amount of money to intervene in campaigns and corrupt democratic politics. The donation behavior of the crypto industry has raised concerns about the fairness of American elections and the democratic system.
