The cryptocurrency industry is actively courting policymakers in Washington, D.C., as it seeks to shape the regulatory landscape under the new administration. Nearly every major cryptocurrency company has dispatched policy teams to the nation’s capital, aiming to secure a seat at the table with influential groups such as the President’s Working Group on Digital Asset Markets, led by David Sacks, the administration’s point person on crypto and AI. Additionally, firms are vying to influence discussions at the SEC’s new Crypto Task Force, helmed by Commissioner Hester Peirce. This surge in lobbying efforts underscores the industry’s recognition of the critical role that federal regulation will play in determining its future.
A key focus of these efforts has been the Presidential Council of Advisers for Digital Assets, a body initially expected to provide a formal platform for industry leaders to weigh in on crypto policy. However, in a reflection of the fast-paced and often unpredictable nature of changes under the new administration, it now appears that the council will not be established as previously envisioned. Instead, Bo Hines, the 29-year-old leader of the initiative and a former college football player who has twice run unsuccessfully for Congress, has indicated that the administration will instead organize issue-specific roundtables. These roundtables are expected to bring together stakeholders on an ad hoc basis to discuss particular topics, rather than establishing a single, overarching council. A source familiar with the matter noted that Hines explicitly stated, “We’re not having that [the council]; we’re going to do the roundtables. That’s the current thinking at least.”
This shift in approach will likely require companies like Ripple and Coinbase, both major donors to Trump’s inaugural committee, to adapt their strategies. Rather than securing a permanent seat on a council, they will need to participate in ad hoc hearings, similar to those conducted by the Commodity Futures Trading Commission (CFTC), which is now led by newly nominated Chair Brian Quintenz, a former executive at Andreessen Horowitz. Ripple’s CEO, Brad Garlinghouse, had reportedly been lobbying aggressively for a seat on the original council, but those efforts now seem to have come to naught. Ripple, the company behind the XRP Ledger, a blockchain with a current value of $161 billion, has long positioned itself as a revolutionary force in international finance. However, since its establishment in 2012, it has yet to realize many of its ambitious goals.
Meanwhile, at the SEC, Commissioner Hester Peirce is pushing for a fresh start in the agency’s approach to cryptocurrency regulation. In recent days, her team has met with a variety of industry stakeholders, including representatives from the Blockchain Association, Andreessen Horowitz’s AH Capital Management, and Nasdaq. These discussions have covered a wide range of topics, from addressing past regulatory missteps to exploring issues such as staking in exchange-traded products (ETPs) and clarifying the rules governing crypto trading venues. Peirce’s efforts suggest a desire to reset the SEC’s relationship with the crypto industry, which has often been fraught with tension in recent years.
The legal landscape is also undergoing a significant shift, as several high-profile cases involving cryptocurrency companies have been paused or are undergoing reassessment. In a notable development, a federal judge in Washington, D.C., recently halted the SEC’s lawsuit against Binance, one of the world’s largest cryptocurrency exchanges, for 60 days at the request of both parties. The judge suggested that the SEC’s new Crypto Task Force could “impact and facilitate the potential resolution of this case.” Legal experts predict that similar pauses or dismissals may follow in other pending cases, particularly those that hinge on whether certain crypto assets constitute unregistered securities. Arthur Jakoby, a former SEC prosecutor and partner at Herrick Feinstein, notes, “If you look at the pending SEC cases, I would expect that the ones limited to whether there was an offering of a security without proper registration will be dismissed. However, cases like Binance, which involve fraud allegations, may be more complicated.”
The SEC’s newfound approach under the current administration, which appears more sympathetic to the crypto industry, could also lead to further changes in how these cases are handled. Mark Bini, a partner at Reed Smith, observes, “The SEC, like their counterparts at the DOJ, has a great deal of discretion in these cases. I don’t think crypto companies with cases before the SEC will get relief overnight, but they’ll start seeing changes quite quickly, especially given that many of the people who were leading the crypto cases were reassigned. By reassigning personnel, they’ve made it very clear that their priorities have changed a great deal.” For instance, Binance, which settled with the U.S. government for $4.3 billion in November 2023 to resolve charges related to anti-money laundering and sanctions violations, may find itself in a more favorable regulatory environment moving forward. As the situation continues to evolve, industry stakeholders are eagerly awaiting the issuance of interim guidelines from the SEC’s Crypto Task Force, which could provide much-needed clarity on key issues such as what constitutes a crypto security.
In conclusion, the cryptocurrency industry is navigating a period of significant change as it seeks to influence the regulatory landscape in Washington, D.C. The shift from a formal council to issue-specific roundtables, coupled with the SEC’s new approach under Commissioner Peirce, reflects the dynamic and often unpredictable nature of crypto policy under the new administration. While the immediate future remains uncertain
