Last year, the crypto market saw a significant rebound following Donald Trump’s presidential election win. This boost was driven by Trump’s crypto-friendly behavior and his commitments to position the U.S. as a leader in the crypto industry. Now, as expected, Trump’s newly appointed SEC is gearing up to update cryptocurrency policies, potentially as early as next week.
US Crypto Market Is Set For Clear Regulations
Republican leaders at the U.S. Securities and Exchange Commission (SEC) plan to update their cryptocurrency policies soon, possibly by next week, Reuters reports. This change is set to coincide with Donald Trump’s inauguration as President.
Commissioners Hester Peirce and Mark Uyeda are looking to start a process that might lead to clear rules or guidelines on when a cryptocurrency is considered a security. They also plan to review some ongoing cryptocurrency court cases, according to Reuters.
These expected changes align with the views of Paul Atkins, Trump’s pick for SEC chair. Atkins, who previously served as an SEC commissioner, is known for his favorable views on cryptocurrency. He is expected to relax the strict crypto regulations implemented by President Biden’s Democratic SEC chair, Gary Gensler. Gensler has announced he will resign on January 20, the day Trump takes office.
Under Gensler’s leadership, the SEC tackled concerns about fraud and market manipulation by taking legal action against major cryptocurrency companies like Coinbase and Kraken. The SEC claimed that these crypto tokens are similar to securities and therefore should comply with their regulations. Additionally, some of these cases involved fraud accusations.
Trump’s SEC Will Review Crypto Cases
In the starting days of the new administration, the SEC intends to examine some court cases and may halt those without fraud claims, with the possibility of dismissing some cases later.
Many involved argue that cryptocurrencies are closer to commodities than securities and it’s unclear when SEC regulations should apply. They’ve asked for new SEC rules to define when a token is a security. Commissioners Peirce and Uyeda plan to begin this rule-making by first asking for input from the industry and the public.
The SEC is expected to soon withdraw accounting rules that have made it very expensive for publicly listed companies to hold cryptocurrency tokens for others. Additionally, President Trump, who promised to be a “crypto president” during his campaign and sought cryptocurrency donations, is likely to issue executive orders asking regulators to reassess their cryptocurrency policies, according to Reuters.
Last month, Bitcoin hit a new high, surpassing $108,000, which has made many optimistic about the future of cryptocurrency. Leaders in the crypto industry are hopeful that the new administration will collaborate with them on creating clear rules instead of regulating through enforcement.
The planned nomination of Paul Atkins, a supporter of cryptocurrency, to lead the Securities and Exchange Commission could significantly help achieve this goal.
