Cryptocurrencies Strive for Power in Washington, Yet Potential Positions on the Crypto Council Might Be Invalidated
Crypto's dance with Washington is in full swing, with every major player sending their policy squad to the capital. The goal? To score a place at the table with the President's Digital Asset Markets Working Group, led by tech titan David Sacks, or to influence discussions at the SEC's new Crypto Task Force, helmed by Commissioner Hester Peirce.
The focus has mainly been on landing a spot in the Presidential Digital Assets Council, led by North Carolina native Bo Hines. However, it seems Hines is planning for issue-specific roundtables instead of a single council. According to one source, Hines stated, "We're not having that [the council]; we're going to do the roundtables. That’s the current thinking at least." The Office of Science and Technology Policy backed this up, referring to the president's executive order, which emphasizes holding public hearings and inviting expertise from digital asset leaders.
So, firms like Ripple and Coinbase – both significant Trump donors – will have to settle for on-the-fly hearings to match those run by the CFTC's newly appointed Chair Brian Quintenz. Previous reports suggested Ripple's CEO, Brad Garlinghouse, was lobbying hard for a council seat, but these efforts appear to have fallen flat. Ripple Labs, the company behind the XRP blockchain – valued at $161 billion – has achieved little impact since its 2012 inception.
At the SEC, Commissioner Peirce is pushing for a clean slate. Her team has been meeting with Blockchain Association, Andreessen Horowitz's AH Capital Management, and Nasdaq representatives, among others. Topics range from correcting past blunders to exploring staking in ETPs and clarifying crypto trading venues.
Legal disputes are on pause as well. A D.C. judge halted the SEC's lawsuit against Binance for 60 days, citing the SEC's new task force possibly resolving the case. Arthur Jakoby, former SEC prosecutor, believes that the SEC under its new leadership might find Binance has suffered enough, potentially leading to lighter sanctions.
As Mark Bini from Reed Smith explains, the SEC and DOJ have discretion in these cases, and significant changes are likely to come quickly. Jakoby believes that the SEC will dismiss cases focused on registration violations, but more complex fraud allegations may require more time to resolve.
Enrichment Insights:
- Under the Trump administration, the Presidential Working Group on Digital Asset Markets was established with the aim to establish a federal regulatory framework for digital assets and digital finance, along with a strategic national digital assets stockpile.
- The working group's composition includes the SEC chair, the CFTC chair, and relevant department heads to ensure national security is considered in policy-making.
- Firms like Ripple and Coinbase could potentially benefit from clear regulations and clarifications in the classification of their digital assets under the new framework.
- The SEC's pause in litigation against Binance and Coinbase suggests a shift towards more defined regulations that could help reshape the digital asset market's regulatory landscape.
- Trump's executive order supports the responsible growth and use of digital assets, blockchain technology, and related technologies, differentiating the U.S. from previous regulatory uncertainty.
- Despite Ripple and Coinbase aiming to join the President's Digital Asset Markets Working Group, led by David Sacks, they might need to adjust their strategies due to Bo Hines' plan for issue-specific roundtables instead.
- David Sacks, a tech titan, is leading the President's Digital Asset Markets Working Group, but firms like Coinbase and Ripple might find it challenging to influence discussions as the focus shifts towards roundtables.
- In the absence of a council seat, firms like Ripple and Coinbase, both major crypto players and previous Trump donors, will be eager to participate in the roundtables organized by Bo Hines, hoping for policy changes that benefit digital assets.
- After announcing that he will focus on issue-specific roundtables instead of a single council, Hines moved to invite industry leaders such as Blockchain Association, AH Capital Management, and Nasdaq representatives for discussions on crypto regulation and industry trends.
- David Sacks and Bo Hines, both prominent figures in the crypto realm, will likely have a significant impact on crypto lobbying and policy-making sessions, as their attention turns to the roundtables planned by Hines.
