Pro-Crypto US President Will Change Policy? | Image: Chip Somodevilla/Getty Images
Key Takeaways
- The SEC’s aggressive stance on crypto under the Biden administration has digital asset community debate.
- Republican candidates and party views on Bitcoin vary, with some strong support for BTC.
- The outcome of the 2024 presidential election will influence the regulatory environment for Bitcoin.
The relationship between the Biden administration and the crypto enforcement action by the Securities and Exchange Commission (SEC) has been fraught with tension.
With Republicans presenting support for Bitcoin at the recent Bitcoin conference in Washington, speculations are abuzz on how the political power of a Republican president might impact Bitcoin.
Coinbase CEO Brian Armstrong’s campaign, I #StandWithCrypto might deepen the political divide on crypto.
The SEC’s Current Approach to Crypto
Since 2022, the SEC has intensified its scrutiny of the cryptocurrency sector. High-profile enforcement actions ended in legal battles with firms like Kraken and Ripple. At the start of April, decentralized exchange Uniswap received a Wells notice from the SEC, warning of the agency’s enforcement action in an attempt to apply existing securities laws to digital assets.
Critics argue that the approach stifles innovation and lacks the clarity needed for the industry to thrive. Uniswap’s chief legal officer, Marvin Ammori, expressed frustration over the lack of guidance, indicating a broader sentiment within the sector. Uniswap Creator Hayden Adams said he is ready to fight.
In response, Coinbase CEO Brian Armstrong started a campaign under I #StandWithCrypto ahead of the 2024 November elections.
The campaign seeks to galvanize support to influence future crypto regulations.
Pro-Crypto Campaign And Elections 2024
The campaign outlines a contrast between political figures based on their stance. On one side, Republicans like Cynthia Lummis, Tom Emmer Jr., and even former President Donald Trump are rated highly (‘A’) for their support of the crypto industry.
They are viewed as allies to keep crypto regulation balanced and innovation-friendly.
On the other side, Democrats such as Joe Biden, Mark Warner, Elizabeth Warren, and Brad Sherman receive lower ratings (‘D’ and ‘F’), indicating a perceived opposition to the crypto industry’s growth due to stricter regulatory perspectives.
Based on the campaign website landing page, at least 80 Republicans are pro-crypto allies. Around half of that number are Democratic supporters. Meanwhile, anti-crypto Republican Senators and Congresspersons come to 4, with names like Congressmen Carlos Gimenez and Matt Rosendale.
The list is longer for Democrats.
It appears that the political divide on cryptocurrency is more anti-administration. Proponents argue that embracing crypto can bolster the economy, create jobs, and maintain the US competitive edge in financial technology. Critics, often citing consumer protection and financial stability concerns, advocate for tighter regulations.
Biden Vs Trump
Biden’s opposition, Donald Trump, is seen as a BTC proponent. He has profited from crypto and NFTs while criticizing the potential of a US Central Bank Digital Currency (CBDC). Pro-crypto supporters have cited it as a Biden-led surveillance tool.
However, determining whether a Republican president could lessen enforcement actions by independent bodies such as the SEC or successfully pass legislation given the mixed support and opposition to the asset class among both Democratic and Republican Senators and Congresspersons is challenging and, to a certain extent, unlikely, considering the SEC commissioners are also often divided.
Senator Cynthia Lummis, a BTC proponent recently suggested that future elections could pivot on the crypto regulation debate. While a more friendly stance could be expected from the Republican candidate, the political debate and litigations will continue to exist.
Looking at the SEC’s enforcement-heavy approach between 2014 and 2024, the SEC has actively engaged in litigation across regimes . Key actions involved high-profile cases against companies and individuals for fraudulent schemes associated with ICOs, such as the charges against BitConnect for orchestrating a Ponzi scheme.
The SEC also addressed the unregistered sale and offer of securities, exemplified by the case against Ripple Labs. In addition to direct actions related to digital assets, the SEC focused on cybersecurity, penalizing firms for failures in safeguarding customer information and addressing insider trading related to cyber hacks.
However, the agency’s actions increased after 2021, when Trump’s tenure ended at the beginning of 2021. So has the size and activity of the crypto market.
Therefore, Bitcoin can be positively impacted by Republican power, but it might not impact the asset class in the medium to long run.
What Will a Republican Candidate Change?
The SEC’s stringent oversight of the cryptocurrency market under the Biden administration has mobilized industry figures like Coinbase CEO Brian Armstrong to campaign for political support. With the Republican party showing more openness to crypto, the upcoming presidential election could be good for the industry.
However, it’s uncertain to what degree a Republican president has the power to get a more favorable approach to digital assets. Considering the Congress and Senators remain divided and so do the SEC commissioners beyond party lines.
But the industry’s future may well hinge on the outcome of the next election in November 2024.
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