This article first appeared in The Guide newsletter on November 11th. You can subscribe here. Edward Robinson is the story editor for DL News, and the views expressed in this editorial are his own.
Greetings, Ed here. Recently, the narrative surrounding cryptocurrency regulations has drastically changed.
The era of “regulation by enforcement” seems to be over, and the industry is rallying for its desired reforms.
Cryptocurrency has garnered approximately $200 million to sway the 2024 US elections, positioning itself for tailored legislation that distinctly classifies cryptocurrencies apart from traditional assets like stocks and bonds. A plan is in motion.
Additionally, indications suggest that the anticipated Trump administration is inclined to maintain the status quo for cryptocurrencies.
Trump and his sons are more than just supporters; they have a vested interest.
Their latest venture, World Liberty Financial, aims to revolutionize finance by breaking the grip of conventional banks.
Essentially, it’s a call for significant change.
Stay updated with the latest stories and developments by joining our community
Seeking Clarity
The cryptocurrency sector has long sought clarity in regulations.
Rather than accommodating calls for regulations that would classify cryptocurrencies as a distinct asset class, the U.S. Securities and Exchange Commission (SEC) opted to enforce 1930s legislation on these innovative markets.
This approach has led to extensive and costly legal disputes.
Industry leaders, including Brian Armstrong from Coinbase, have voiced concerns about America’s standing in the global market.
In the midst of uncertainty, the European Union provided a glimmer of hope.
Understanding MiCA
In 2023, the EU established the Markets in Cryptocurrency Regulation (MiCA), outlining specific regulations for an industry that is often at odds with SEC Chair Gary Gensler’s strategies.
While major players like Coinbase and Circle may have reservations about the new regulations imposed by Brussels, they at least appreciated the clarity that MiCA offers compared to Gensler’s focus on litigation.
Now, with Trump back in office and a Republican Congress, the regulatory dynamics may shift dramatically.
The regulatory future for the now $1.2 trillion cryptocurrency market may rest in the hands of Washington.
Supporters like Wyoming’s Sen. Cynthia Lummis could propose bills that celebrate the unique nature of the cryptocurrency sector, putting MiCA’s more rigid regulations in a less favorable light.
Blueprints for the Future
Historically, the U.S. has favored a more laissez-faire approach to technological regulation, allowing businesses to operate relatively freely until a legal infraction occurs.
Conversely, the EU opts for a prescriptive regulatory framework, with MiCA providing comprehensive guidelines encompassing everything from stablecoins and crypto exchanges to NFTs.
Now, there’s a chance that the U.S. might establish a more lenient regulatory environment, as some officials suggest the time for such a transformation is now.
A New Era?
In a recent address, SEC Commissioner Hester Peirce, a pro-crypto advocate, urged fellow regulators to temper their hesitance towards cryptocurrency discussions.
“Regulatory environments characterized by volatility and fear tend to stifle entrepreneurial ventures,” Peirce emphasized, highlighting the urgent need for a supportive regulatory framework.
As this new chapter begins, cryptocurrency innovators will no longer be bound by restrictive regulations.
They might already have the support they seek.
Political Influence
The cryptocurrency sector has built a formidable political influence, with campaign finance initiatives already amassing over $78 million in donations for the upcoming 2026 midterms. Ripple’s legal chief, Stuart Alderroti, has outlined critical points for the next SEC chairman to consider, reflecting optimism from groups like Coin Center regarding the future of cryptocurrency regulation following the recent elections.
Current Developments
The lobbying apparatus for cryptocurrency is still evolving, and insights on why we’ve raised an additional $78 million are forthcoming.
The crypto sector’s financial lobbying strategy is rapidly expanding, and this is just the beginning. Reports from Ben Weiss and Joanna Wright will reveal what lies ahead.
Noteworthy Updates
Recent announcements indicate that Gensler will resign on January 20, coinciding with Trump’s inauguration. The cryptocurrency community responded with skepticism.
Public Reactions
“I’m a Satoshi, just like you,” developer Peter Todd quipped, referencing the ongoing speculations about Bitcoin’s mysterious creator in a recent HBO documentary—despite him denying being Satoshi Nakamoto. Director Karen Hoback voiced her certainty that Todd embodies the Bitcoin creator.
