Dear President-elect Trump,
As co-head of a major law firm’s digital assets practice, I am very excited to hear that you, the nominee for Chair of the Securities and Exchange Commission (SEC), are eagerly awaiting (and have been following for a long time) the way the SEC approaches cryptocurrency market regulation. I hope that they will make some much-needed reforms. In the US.
However, as you know, it will take some time for your nominee to be confirmed as SEC Chairman and for him to develop new SEC guidance and rules for the crypto industry. With that in mind, I would respectfully suggest an executive order that could be issued on the first day of the President’s term to help restore America’s leadership in the burgeoning crypto financial system.
While other countries rush to clarify regulations to allow crypto entrepreneurship to flourish, U.S. lawmakers and regulators have so far been unable to address the number of regulations that were never intended to apply to this breakthrough technology. It refuses to shape and modernize decade-old rules, leaving U.S. market participants adrift at sea. Regulatory ambiguity. Meanwhile, under current Chairman Gary Gensler, the SEC has been banning cryptocurrency companies, projects, and founders based on allegations that they violated these outdated and anachronistic requirements, even in the absence of allegations of fraud or wrongdoing. They have filed lawsuits against a number of people. Actual harm to investors.
It is no surprise that this enforcement-based regulatory approach is driving many of the leading innovators and companies in the digital asset space overseas, jeopardizing America’s leadership position in the global economy.
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The good news is that it’s never too late to turn things around. This moment represents a once-in-a-generation opportunity to make America the crypto capital of the world and harness the transformative potential that digital assets and blockchain technology bring to our country. While many legislative, regulatory, and tax reforms are needed to seize this opportunity, there is one action that can be taken immediately on the first day of office to pave the way for the resurgence of the crypto sector in the United States.
An executive order could be issued on January 20 directing all federal agencies to:
1. Cryptocurrency companies, unless they involve credible allegations of (a) fraud or other intentional wrongdoing that harms investors or other victims, or (b) acts that threaten the nation; Immediately cease all investigations, enforcement actions, and prosecutions against the Project and its Founders. safety.
2. Within 180 days, the relevant authorities will submit a written report to the Office of the President detailing why such proceedings should not be immediately terminated.
3. Immediately end all investigations, enforcement actions, or prosecutions of cryptocurrency companies, projects, or founders that do not warrant continued prosecution.
What the proposed executive order would accomplish
The proposed executive order is based on the chilling effect on the digital asset industry caused by the proliferation of government enforcement lawsuits in recent years, including lawsuits brought against good actors who failed to follow rules that are at best outdated and inapplicable. It will be very important to bring it back. harm one investor. Most notably, the SEC has issued billions of dollars in disgorgement (which should only be applied when an alleged violation of the law results in financial harm to the victim) in a victimless cryptocurrency enforcement case. (a monetary penalty that several courts have determined to be levied).
Many of these lawsuits seek to impose harsh sanctions on legitimate crypto market participants who provide the digital infrastructure necessary for crypto markets to thrive in the United States. It is time to reconsider this debacle approach to law enforcement. The proposed executive order could accomplish this on the president’s first day in office.
To be clear, you have full authority to do this. Article 2 of the Constitution empowers the President to unilaterally issue such executive orders without the enactment of any law or regulatory rule. The Department of Justice’s Office of General Counsel notes that Article II gives the President the authority to compel all federal agencies (including independent regulatory agencies such as the SEC) to comply with executive orders such as the one proposed here. He expressed the opinion that this generally applies to all citizens. Executive agency.
We can make America the center of the world’s crypto economy. The proposed executive order could be the first step toward achieving that goal on the president’s first day in office.
