Quicktake

• Political Frustration: Crypto investors target SEC Chair Gary Gensler’s regulatory approach.
• Trump’s Stance: Trump promises to reduce crypto regulations if re-elected.
• Biden’s Perception: Biden seen as anti-crypto, causing concern among his allies.
• Key Figures: Ripple and Coinbase executives vocal about SEC litigation costs.
• Potential Changes: Crypto industry suggests candidates for SEC positions under a potential Trump administration.

The cryptocurrency industry’s mounting frustration with the regulatory agenda of SEC Chair Gary Gensler has sparked a political battle, as crypto investors seek to increase their influence in Washington, D.C. This year, the tension has taken on a new dimension, with former President Donald Trump positioning himself as a champion for the crypto community, promising to roll back regulations if he wins the presidential election.

In June, a high-profile Republican fundraiser took place in San Francisco at the Pacific Heights mansion of venture capitalist David Sacks. The event, which drew significant attention in one of America’s most progressive cities, featured Trump as the guest of honor. Attendees paid up to $300,000 to hear Trump speak, and his message was clear: if re-elected, he would ease regulatory pressures on the cryptocurrency industry to foster innovation.

Trump’s Promise to the Crypto Industry

During his address, Trump assured the audience that his administration would adopt a more favorable stance towards cryptocurrency, effectively “getting out of the way of innovation.” This pledge resonated with many in the room, including Stuart Alderoty, Chief Legal Officer of Ripple. Alderoty highlighted Ripple’s struggles with the SEC, noting that the company had spent over $100 million defending itself in a lawsuit initiated by the SEC under Gensler’s leadership. The SEC had accused Ripple and its founders of violating securities laws by acting as unregistered brokers of digital currency tokens.

Alderoty’s remarks underscored a broader sentiment within the crypto industry—that Gensler’s regulatory approach has stifled growth and innovation. Paul Grewal, Chief Legal Officer of Coinbase, was also in attendance, representing another major crypto entity embroiled in legal battles with the SEC. In 2023, the SEC filed a complaint against Coinbase, accusing it of operating as an unregistered securities exchange. Both Ripple and Coinbase have denied these allegations, and the cases are ongoing.

The Political Shift in Crypto Regulation

Trump’s recent embrace of the crypto community marks a significant shift from his previous skepticism towards digital currencies. This pivot is gaining him support among crypto enthusiasts, who see him as a potential ally against what they perceive as overly stringent regulatory measures. The growing alignment between Trump and the crypto sector has led some industry leaders to take proactive steps in shaping the future of crypto regulation under a potential Trump administration.