Donald Trump’s presidency has changed how virtual currencies are regulated. The SEC halts its lawsuits and reevaluates its enforcement strategy.
Reuters reports that the new government will examine the SEC’s approach to cryptocurrency cases without fraud. This is a significant shift from before. Under Gary Gensler, the former SEC chairman, there were over 80 enforcement actions in crypto. A more measured response has replaced his confrontational style.
Paul Atkins, whom Trump has nominated for the SEC chair post, will supposedly lead the shifts. Atkins, pro-crypto, will probably work with the Republican SEC commissioners, Hester Peirce and Mark Uyeda. Both commissioners have been very critical of Gensler’s handling of the agency, which suppressed innovation in the fast-growing digital asset space.
Trump Advocates Clearer Crypto Regulations With SEC Overhaul
It is said that Peirce and Uyeda are considering enhancing the standards that determine whether cryptocurrencies should be deemed securities. They are also considering changing other accounting rules that have prevented firms from storing cryptocurrencies for third parties. Some of these policies could roll out alongside Trump’s inauguration as early as next week.
Among the planned changes in the structure of the SEC is the idea of starting public consultations on how to design new specific rules for cryptocurrencies. Market participants have long demanded higher specificity of the rules, stating that present standards are inadequate and do not correspond to modern decentralized digital assets.
‘The industry requires that kind of disclosure guidance for it to grow,’ a spokesperson who was privy to the alternatives under consideration by the SEC said. “That approach could bring out the right mix needed to spur innovation yet discourage malicious actors.”
Some of these proposed variations have stirred a lot of controversy. Critics have said that freezing or dismissing pending cases can weaken investor safeguards. However, legal pundits have noted that an endeavor to alter existing rules may prove a nightmare, as it could delay enacting the new rules in both the courts and Congress.
There is reason to believe the crypto community will welcome this change in regulators’ approach. Bitcoin prices have skyrocketed to $99000 because of Trump’s perceived friendly policies towards crypto.
During Gensler’s tenure, the SEC acted proactively and pursued an active enforcement campaign based on the proposition that many of the tokens constituted unregistered securities. While some applauded these efforts as necessary to reign in fraud, others accused the agency of going too far.
Market participants expect the new head of SEC to persist with fraud crackdown but be more helpful to firms that seek to adjust to the rules.“This shift could mark the beginning of a new chapter for the crypto industry in the United States,” said a director in a leading crypto company. “This appears to be changing from punishment to partnership.”
When the commission passes from one leadership to another, the American crypto industry prepares for a possible change of rules that may reconfigure its further evolution. In the coming months, there might be very drastic changes to how digital assets are regulated and adopted, especially with the support of the Trump administration.
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