Trump’s Record On Crypto
In the rapidly evolving landscape of cryptocurrencies, the regulatory approach taken by political leaders often plays a crucial role in shaping the industry’s growth and stability; and as the government is beginning to formulate a plan to tackle the industry’s issues head on with vague regulatory oversight, the regulatory approach taken by our elected officials will undoubtedly play a role in this industry’s widespread adoption or its disastrous demise.
With the 2024 campaign for the GOP nomination officially kicking off with the first GOP Presidential Debate and Trump’s record-breaking interview with Tucker Carlson, it is even more crucial to understand the crypto-based policies of the likely nominees of each major political party. With this in mind, The Cardano Times aims to provide an overview of the policies and promises of each viable candidate in the 2024 election. In our first report in this series, we aim to provide an apolitical and comprehensive analysis of the legacy of Former President Donald Trump in terms of his rhetoric, actions, investments, policy decisions, and campaign promises regarding cryptocurrencies during his Presidency and on the Campaign Trail.
Trump’s Rhetoric, Actions, and Investments
Former President Donald Trump has rarely commented on the cryptocurrency industry, reportedly only tweeting one time about cryptocurrencies while in office; stating he was “not a big of Bitcoin and other cryptocurrencies.” Oddly enough, Anthony Scaramucci, Trump’s former communications director; reiterated his belief to Decrypt that President Trump himself did not write the tweet that remains up on his inactive Twitter account.
Trump often shares his perspectives on this rapidly growing industry with responses to questions from reports on the campaign trail or during one-on-one interviews. During the last few years, especially during his administration; President Trump had been consistently vocal in attacking cryptocurrencies, specifically Bitcoin. He shared his thoughts that Bitcoin and other cryptocurrencies hurt the security of the U.S. Dollar and “facilitate” a wide variety of “unlawful behavior.”
One of Former President Trump’s most notable attacks against the industry was in an exclusive interview with Stuart Varney on Fox Business in June of 2021, where Trump stated Bitcoin “just seems like a scam.”
“I don’t like it, because it’s another currency competing against the dollar. I want the dollar to be the currency of the world. That’s what I’ve always said.” — Former President Trump on Fox Business with Stuart Varney, June 7th, 2021
Trump also repeatedly doubled down on his statements over the course of future interviews. In August of 2021, the Former President re-appeared on Stuart Varney’s show on Fox Business where the cable news host once again asked whether or not Trump had invested in any cryptocurrencies and stocks. In response, Trump had this to say on cryptocurrencies;
“I like the currency of the United States, I think [stutters], I think the others are potentially a disaster waiting to happen. I don’t know — [stutters], I feel that it hurts the United States currency. I think we should strengthen — we should be invested in our currency. They may be fake, who knows what they are? But they certainly are currencies — they certainly are something that people don’t know very much about. No I have not been — , I have not been a big fan.” — Former President Trump on Fox Business (8/31/21)
Moreover, the Former President went on for an interview on Fox’s Mornings with Maria; where Trump reiterated his distaste of cryptocurrencies, having this to say about the industry at the time:
“Well, I’ve never loved [cryptocurrencies] because I like to have the dollar. I think the currency should be the dollar, so I was never a big fan. But it’s building up bigger and bigger and nobody’s doing anything about it. [chuckles] I know it so well. Look, I want a currency called the dollar, I don’t want to have all these others. And that could be an explosion someday the likes of which we’ve never seen. It will make the Big Tech explosion look like baby stuff. I think it’s a very dangerous thing.” — Former President Trump on Fox Business’ Mornings with Maria
Oddly enough, the Trump family has seemingly changed their stance dramatically on cryptocurrencies over the past year. Just days before the aforementioned interview on Mornings with Maria, former first-lady Melania Trump announced the release of her Solana-based NFT collection “Head of State” in which the Former President praised her, stating she was going to do “great” due to her great “imagination.”
Additionally, just a few weeks later; the Former President himself announced the release of his own Polygon-based NFT collection, composed of digital trading cards of Trump in a variety of outfits, poses, and unique modifications. The collection was mintable in December of 2022 for a hefty price tag of around $99 per NFT trading card. The President even posted an announcement regarding the NFT collection’s release on his own social media platform, Truth Social; shilling it to millions of followers and gaining widespread media coverage over the promotion.
In an interview with Chanel Rion of One America News back in December of 2022, Former President Trump did clarify that it was not necessarily about the money; but rather that he appreciated the “comic-book art” aspect of the collection, yet also applauded the project’s instant sell-out and floor price action. Trump stated that he was approached by a team who launched the project, and focused on the art collection more so than the fact that they are minted as Non-Fungible-Tokens.
Moreover, per a publicly released financial disclosure form submitted to a federal ethics agency; the Former President disclosed he owns Ethereum wallet(s) containing ETH valued somewhere over $2.8M. These funds are most likely derived from his initial NFT collection’s mint profits given he earned “about $4.9 million in licensing fees” from his NFT collection, but his refusal to sell Ethereum indicates a potential bullish sentiment from the Former President on cryptocurrencies, or at the very least; Ethereum.
To be clear since the beginning of 2023, Trump has largely remained silent on the issue of regulating cryptocurrencies, the industry, fraudulent activity, and CBDCs while on the campaign trail. There have been little to no public comments made by Trump campaign officials, no regulatory framework proposed by the campaign, and were unreachable for comment before this story’s publication. Although the Former President has failed to give a clear statement regarding his views on CBDCs, Trump has been specific to say he does not want any digital currency competing against the dollar (which presumably includes stablecoins and CBDCs).
Given Trump’s actions clearly contradict his consistent stance of bashing the cryptocurrency industry, it’s crucial to analyze Trump’s proposed legislative initiatives relating to the industry as well as his past Administration’s achievements to promote growth and innovation within cryptocurrency ecosystems. The most important of all; the crypto-related achievements of the 45th President’s Administration in the four short years Trump served as President in the highest office of the United States.
The Trump Administration’s Crypto Policies & Achievements
The best measure of a President’s stance on certain issues is arguably by analyzing their past legislative achievements and efforts, most notably; their Administration’s efforts. President Trump has a notorious tendency to make contradictory statements that do not align with the policy actions taken by his Administration, so it is even more crucial to comprehend the Trump Administration’s legislative efforts and/or regulatory enforcement actions while he served in the Oval Office.
In response to the Trump Administration’s proposed economic policy initiatives in the early months of his presidency, CNN attributed Bitcoin’s miraculous price performance partially to that of Trump’s Presidency in an article titled “Bitcoin prices are soaring under Trump.”
The author of the article, Paul R. La Monica; stated that there are a variety of reasons for cryptocurrency investors and enthusiasts to remain optimistic about the Trump Administration in regard to regulatory oversight of the cryptocurrency industry, stating that the President had “some known bitcoin bulls in his Administration.” La Monica pointed to Trump’s budget director, former U.S. Representative Mick Mulvaney, which she and many others called the “Bitcoin Congressman;” as well as Vice President Mike Pence’s Chief Economist Mark Calabria, who served as the director of financial regulation studies at the Cato Institute and has repeatedly “given speeches in support of Bitcoin.”
During the beginning years of his Administration, President Trump remained largely silent on the issue of cryptocurrencies while his Administration handled those issues with minimal public attention.
In an opinion piece written by Nikhilesh De, a reporter at CoinDesk; titled “State of Crypto: Unpacking the Trump Presidency’s Crypto Legacy,” De stated that although “Donald Trump may have been anti-crypto,” the officials and regulators he appointed “ushered in a largely industry-friendly regime.”
“The Trump administration was largely friendly toward the industry (with a few notable exceptions), and ushered in a wave of regulations and products that were welcomed by the crypto community.”
Even though De initially praises the Trump Administration for their largely friendly regulatory oversight of the industry, De continues stating that President Trump himself was largely not responsible for these legislative efforts or regulatory actions. Instead, she points towards the cryptocurrency-friendly Trump Officials in his Administration who pushed forward cryptocurrency-friendly regulatory and legislative initiatives.
“ The Trump administration stopped short of actually setting a policy direction, however. Almost all of the crypto-friendly actions were conducted by the regulators he nominated to various posts, and no significant legislation on the crypto space was passed or signed into law.”
It is factually correct that the Trump Administration had failed to ever propose or draft comprehensive legislation to properly regulate the cryptocurrency industry during his four years as President, and it is also factually correct that a lot of the praised efforts of the Trump Administration’s cryptocurrency oversight derive from the guidance and enforcement actions of regulatory agencies such as the CFTC & SEC.
President Trump did surround himself with notable cryptocurrency-friendly advocates, with Steve Bannon; his then-chief strategist, stating publicly that cryptocurrencies “are the future.” Mick Mulvaney, President Trump’s acting Chief of Staff; also shared his support of Bitcoin and other cryptocurrencies from as far back as 2014.
Trump-appointed SEC Commissioner Hester Pierce (nicknamed the “Crypto Mom”) and OCC Chief Operating Officer Brian Brooks (Coinbase’s former Chief Legal Officer) were also vocal advocates for the cryptocurrency industry, often contradicting the Former President’s public dismissals of cryptocurrencies.
However, Trump did not align publicly with his officials in regard to cryptocurrencies; as John Reed Stark puts it, he instead found common ground with his fiercest opponents within the Democratic Party.
“President Trump’s position aligns him most closely with an array of loud and active cryptocurrency critics and skeptics, who also happen to be some of the most virulent anti-Trump Democrats.” — John Reed, “A Roadmap For President Trump’s Crypto Crackdown”
Among these “virulent anti-Trump Democrats include fierce anti-cryptocurrency politicians such as Congresswoman Maxine Waters (D-CA), Senator Elizabeth Warren (D-MA), and Congressman Brad Sherman (D-CA); all of which have fiercely criticized and condemned President Trump publicly. In fact, all of them even voted to impeach the Former President during his Presidency.
Despite their extremely visible differences of opinion on a variety of issues, President Trump’s rhetoric regarding cryptocurrencies tended to align with that of the Democratic Party and President Biden; despite his Administration’s contradictory legislative approach.
In their detailed overview of the Trump Presidency, Nikhilesh De noted a few of the Trump Administration’s achievements during his Presidency through the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), and the Office of the Comptroller of the Currency (OCC) as well as some notable appointments in these respective federal agencies.
The Commodity Futures Trading Commission under President Trump:
President Trump’s CFTC oversaw some groundbreaking developments in the cryptocurrency industry, including the approval of the first-ever cryptocurrency derivatives.
To start, the CFTC approved cash-settled bitcoin futures in 2017 under CFTC Chair Chris Giancarlo’s direction, who was dubbed by many in the industry as the “Crypto Dad” (despite his vocal support for CBDCs] during his reign as Chair of the CFTC “because of his advocacy for a light-touch regulatory framework.”
Back in 2019, Chair Giancarlo told CoinDesk back in 2019 that it was his belief that the “approval and introduction of a bitcoin futures market helped pop the 2017 crypto bubble.” In public statements he made in a speech at the San Francisco-based Pantera Summit, Giancarlo stated that “Bitcoin’s dramatic price run-up in December 2017 was the first major bubble following the financial crisis. That’s why the Trump Administration acted in concert to address it in a pro-markets manner.”
“We saw a bubble building [with Bitcoin] and we thought the best way to address it was to allow the market to interact with it,” — CFTC Chair Chris Giancarlo at the 2019 Pantera Summit in San Francisco, California
In support of Giancarlo’s approach to regulating cryptocurrencies, James McDonald, enforcement director of the CFTC; echoed a similar sentiment of avoiding the stifling of innovation and growth within the industry during a panel at CoinDesk’s Consensus Conference in 2018.
“Our mission is to foster financially sound markets, and we understand as a regulator that requires a certain amount of [flexibility] in our approach. We’re doing it in a way that doesn’t hinder innovation and doesn’t interfere with other regulatory priorities.” — James McDonald, former enforcement director of the CFTC at Consensus 2018
Furthermore, the approval of physically settled bitcoin futures in 2019 as well as physically settled ether futures in May of 2022 under the oversight of Chair Heath Tarbert. The CFTC also embraced additional oversight of the cryptocurrency industry, specifically Bitcoin; when U.S. District Judge Jack Weinstein ruled Bitcoin is a commodity back in 2018 and “therefore subject to the CFTC’s enforcement supervision.”
Later in March 2020, the CFTC provided a concrete definition for “‘actual delivery’ for cryptocurrency contracts,” classifying “what it means for a customer to receive Bitcoin earned through margin trading.” Per these additional resources and guidelines, Coinbase; the leading US cryptocurrency exchange, announced the termination of products related to margin contracts without issue.
CFTC Chair Tarbert has also gone further than his predecessor on record stating his belief that Ethereum should be classified as a commodity and subject to the CFTC’s regulatory oversight over the SEC. Although largely remaining silent on the issue that is cryptocurrencies, Tarbert has gone on record adamantly predicting the regulation of Ether through the Commodities Exchange Act as well as derivatives potentially being traded.
“We’ve been very clear on bitcoin: bitcoin is a commodity under the Commodity Exchange Act. We haven’t said anything about ether — until now. It is my view as Chairman of the CFTC that ether is a commodity, and therefore it will be regulated under the CEA. And my guess is that you will see, in the near future, ether-related futures contracts and other derivatives potentially traded” — CFTC Chair Heath Tarbert at the 2019 All Markets Summit
Additionally, under the authorization of the CFTC’s General Counsel, Daniel Davis; CFTC employees have been able to buy, sell, and hold cryptocurrencies from February 2018 onwards, furthering the agency’s acceptance, oversight, and adoption of this industry.
Overall, despite some minimal legal pursuits against confirmed fraudulent bad actors in the industry; the CFTC under the leadership of President Trump, Chair Tarbert, and Chair Giancarlo during the Trump Administration expressed openness to regulate a large portion of the cryptocurrency market as commodities in a manner that promotes innovation, enables market participation, and deters fraudulent activity.
If the Trump Administration had pushed comprehensive legislation regarding cryptocurrencies through Congress that would have further enabled the CFTC, it is unlikely the SEC would have any legal grounds to attack a majority of the cryptocurrencies it has classified as securities.
The CFTC simply did not have the resources or congressional authority to delegate such extravagant powers to its own agency, and it is an unfortunate reality that Trump’s Administration failed at securing comprehensive regulatory clarity for this industry simply due to the lack of acknowledging the necessity for such regulation at the time.
The Securities and Exchange Commission under President Trump:
The SEC has consistently been one of the more active regulatory agencies in the United States attempting to regulate the industry through their legal capabilities, and during the Trump Administration; the SEC made a number of enforcement actions and published a number of reports to provide guidance for industry participants.
In the first year of Trump’s Administration, the SEC made a series of efforts to indicate their authority to regulate a multitude of crypto-based companies and blockchains, publishing “its most consequential guidance” in July 2017; the DAO Report, which “concluded federal securities laws might apply to certain cryptocurrencies and sales involving crypto.”
In September of the same year, the SEC established a cyber-crime unit within their agency to combat crimes “committed using cryptocurrencies and the dark web.” In November, the SEC stated celebrities who are paid for promoting cryptocurrency ICO (initial-coin-offerings) without disclosing their compensation are breaking the law and would face consequences.
”Celebrities & others are using social media networks to encourage the public to purchase stocks & other investments. These endorsements may be unlawful if they do not disclose the nature, source, & amount of any compensation paid, directly or indirectly, by the company.” — Official SEC Press Release
In January 2018, the Securities and Exchange Commission requested several companies withdraw their applications for approval of a Bitcoin ETF; to which virtually all complied. The SEC’s Director of Investment Management, Dalia Blass; stated that “valuation, liquidity, custody, arbitrage and market manipulation concerns all need to be addressed before the agency will approve a bitcoin ETF.”
“Until the questions identified above can be addressed satisfactorily, we do not believe that it is appropriate for fund sponsors to initiate registration of funds that intend to invest substantially in cryptocurrency and related products, and we have asked sponsors that have registration statements filed for such products to withdraw them.” — Dalia Blass, SEC Director of Investment Management; on concerns regarding a BTC ETF
The SEC also announced in January they would begin researching “companies that announced blockchain pivots” and take appropriate enforcement action, causing fear amongst companies hoping to incorporate blockchain technology. Additionally in Januar, Heather Pierce; the Trump-appointed Commissioner of the SEC, was sworn into office on January 11th, 2018. The media later called her “Crypto Mom” for her pro-crypto regulatory approach and proposals during her tenure at the SEC.
In June, the Securities and Exchange Commission announced they would appoint Valerie Sczcepanik as the agency’s senior adviser for “digital assets and innovation.” Valerie previously headed the agency’s distributed ledger working group. She was later called by the crypto media the SEC’s appointed “Crypto Czar” heading efforts to regulate the industry.
Per CoinDesk, William Hinman, SEC Director of Corporation Finance; stated “in his view, ether doesn’t look like a security.” In a surprising addition, then SEC Chairman Jay Clayton “endorsed Hinman’s view,” which reportedly laid the foundation for the CFTC to be able to “invite and approve companies looking to create an ether futures product.” However, the SEC still decided to reject nine applications for a Bitcoin ETF in August.
In October of 2018, the SEC announced the establishment of Strategic Hub for Innovation and Financial Technology (FinHub); an enforcement division within the agency “specifically focused on distributed ledger technology and other financial technology products.” The agency stated it launched the division “with the goal of making it simpler for fintech startups — including those launching initial-coin-offerings (ICOs) — to navigate the legal implications of their products.” Sczcepanik, the SEC’s “Crypto Czar;” was announced to head the division:
“SEC staff across the agency have been engaged for some time in efforts to understand emerging technologies, communicate the agency’s stance on new issues, and facilitate beneficial innovations in the securities industry. By launching FinHub, we hope to provide a clear path for entrepreneurs, developers and their advisers to engage with SEC staff, seek input and test ideas.” — Valerie Sczcepanik on the establishment of FinHub
In April of 2019, the regulatory agency published a report detailing a “token framework” and establishing criteria in which the SEC would classify a cryptocurrency as a security. However, CoinDesk reported “industry participants say it leaves many questions unanswered.” However, in that very same month; the SEC “published its first no action letter allowing a company to legally sell” cryptocurrencies.
In February of 2020, SEC Commissioner Pierce released a proposal detailing a regulatory framework in which cryptocurrency-based startups would have “three years to build out their networks before having to address federal securities laws.” Although this proposal largely fell flat in a reportedly divisive federal agency full of conflicting opinions, it did show the SEC’s openness during the Trump Administration. In September of that same year, the SEC stated “some stablecoins” are not securities; but advised issuers of stablecoins to communicate and collaborate with the SEC to “ensure it isn’t in violation of any U.S. laws.”
Finally, the SEC made a series of enforcement actions against celebrities, individuals, and companies during Trump’s Presidency; the most notable of them being their lawsuits against Kik and Telegram for their respective kin and gram token sales, as well as their charges against Zachary Coburn (founder of the EtherDelta DEX) for “operating an unregistered securities platform.”
The SEC also charged celebrities like Steven Seagal (who failed to disclose he was compensated by a cryptocurrency he promoted), Floyd Mayweather (who was compensated over $300,000 from Centra Tech, Stox, and Hubii Network to promote fraudulent cryptocurrencies), and DJ Khaled (who promoted a crypto ICO without disclosing his compensation by the team conducting the ICO).
The Office of the Comptroller of the Currency under President Trump:
The OCC has not often been a federal agency at the forefront of regulating the cryptocurrency industry, but after President Trump nominated Brian Brooks for the position of Chief Operating Officer of the OCC for a full term in April 2020; Brooks became so effective at implementing comprehensive regulatory oversight over the cryptocurrency industry that Congressional leaders demanded he prioritize other legislative agendas, with what De describes as “light-speed guidance.”
Just in the last half of 2020 alone, Brooks oversaw massive additions to the OCC’s regulatory guidance and oversight. In July, Brooks proposed a national charter that would enable FinTech firms the ability to bypass state money transmitter license requirements in an effort to empower crypto-based companies so long as they provide “payment services.” The OCC also ruled in July that banking institutions could provide custody for cryptocurrencies and stablecoins, of which Brooks stated he had “heard” reports circulating of banking institutions reaching out to crypto-based companies such as Coinbase and Anchorage.
“Well, what I have heard … a number of big crypto custodians — Anchorage, Coinbase, and a number of others — have been contacted by banks about whether they’d be willing to be like the third-party custody providers for national banks whose customers want to invest in bitcoin.” — Acting Comptroller Brian Brooks on “Unchained”
In September, Brooks oversaw the publication of the OCC’s stablecoin guidance for banking institutions; which is reported to have provided proper guidance and regulatory clarity for banking institutions to properly service and work with stablecoin issuers. Before its publication, banking institutions lacked the regulatory clarity and guidance necessary to feel comfortable enough to take on issuers of stablecoins as clients or business partners. The OCC’s guidance regarding stablecoins changed the overall landscape for the regulation of stablecoins and provided the necessary clarity that would promote innovation and growth in the industry.
In the month of October, the OCC permitted an unprecedented conditional charter to FinTech “lender” SoFi to establish a national bank; which Kevin Reynolds of CoinDesk described as the catalyst that if finalized, “opens the door for the new bank to custody cryptocurrencies.”
In November, Brooks oversaw the gradual implementation of additional regulations for banking institutions; which would “prohibit” these institutions from refusing or denying service to certain clients based on their respective industries, including the cryptocurrency industry. After a grueling and gradual process, the rules were finalized in January of 2021 empowering cryptocurrency-based companies in the United States.
Under Brook’s leadership, the OCC also released “three interpretive letters” with the ultimate aim of providing the necessary additional regulatory guidance and clarity for banking institutions in January of 2021; stating that “banks can use stablecoins for payments, as well as operate nodes on public blockchains” from then onward.
Moreover, the OCC also permitted a “conditional trust charter” to cryptocurrency custodian Anchorage; granting it permission to become the first digital asset bank in the history of the United States.
”In granting this charter, the OCC applied the same rigorous review and standards applied to all charter applications… By bringing this applicant into the federal banking system, the bank and industry will benefit from the OCC’s extensive supervisory experience and expertise.” — OCC Spokesperson on granting Anchorage approval
Overall, President Trump’s appointment of Coinbase’s former Chief Legal Officer as head of the OCC is arguably one of the most historic and monumental decisions for the cryptocurrency industry since its inception. As head of the OCC, Brooks oversaw massive initiatives to provide much-required clarity to banking institutions wary of associating themselves with cryptocurrency-based companies or stablecoin issuers. With his incredible expertise in the industry given his prior work at Coinbase, Brooks utilized the tools of the OCC to create monumental reform beneficial to those operating within the industry as well as outside of it.
Banking institutions have far more confidence in dealing with crypto-based companies (at least from a legal standpoint) due to the regulatory guidance and initiatives the OCC took in the final year of Trump’s Presidency. Although many other federal agencies made limited attempts to truly regulate the cryptocurrency industry, Brooks utilized the massive regulatory capacity of the OCC; which supervises banking institutions, to set forth massive changes that benefit the industry immensely.
Brian Brooks, Former Head of the OCC led the most monumental and historic cryptocurrency-based reform in the United States, unmatched by virtually all government officials and politicians who have attempted to regulate crypto. Although President Trump has rhetorically shown to disprove such approval of cryptocurrencies, his appointment of Brian Brooks ushered in a wave of crypto-friendly policies that benefited banking institutions, stablecoin issuers, and companies operating within the space.
Whether or not the Former President may regret it now in his third election bid, Trump appointed the most effective cryptocurrency-friendly official in the history of the United States without a doubt. In just one year in office, Brooks provided incremental value in the efforts to promote further adoption as well as construct a fair and safe regulatory landscape.
The Department of the Treasury Under President Trump:
In what has now been described as the “Mnuchin Files,” a 250-page report obtained by CoinDesk through a Freedom of Information Act (FOIA) request that detailed the Trump Administration’s approach to regulating and overseeing the cryptocurrency industry; showed the Administration focused their efforts on what a lot of people have described as “anti-cryptocurrency policies” through the Department of the Treasury and its Secretary Steven Mnuchin.
Mnuchin, who initially served as the finance chairman of Trump’s 2016 campaign, was later nominated by the President for the position of the 77th Secretary of the Treasury; being sworn in officially on February 13, 2017.
During his initial tenure as Secretary of the Treasury, the department largely remained uninvolved in overseeing the cryptocurrency industry, often merely publishing guidance and suggestions through briefings and press releases.
It wasn’t until May of 2018 when the department began efforts to propose and implement regulatory oversight of the industry, when according to an excerpt from former national security adviser John Bolton’s 2020 book; Trump told Mnuchin it was a priority to “go after Bitcoin” over negotiations of a possible trade agreement with China.
“Don’t be a trade negotiator… Go after bitcoin [for fraud].” — President Trump to then Secretary of the Treasury
In response, Mnuchin obliged and stated that Trump’s “economic team will execute whatever” he desired in regard to China as the Treasury narrows focus on regulating the cryptocurrency industry.
Although largely remaining uninvolved in the regulation of the industry during the last half of 2018, the Treasury ramped up efforts after a reported email-based conversation between Mnuchin and Trump’s senior advisor and son-in-law, Jared Kushner; back in May of 2019, where Kushner advocated for the potential implementation of a digital U.S. Dollar.
“Steven — Would you be open to me bringing a small group of people to have a brainstorm about this topic [stablecoins]? My sense is it could make sense and also be something that could ultimately change the way we pay out entitlements as well saving us a ton in waste fraud and also in transaction costs…” — Jared Kushner to then Secretary of the Treasury Steven Mnuchin
Although there is no confirmation of a meeting between Kushner and Mnuchin taking place on the subject, just months later; Mnuchin gave a White House Press Briefing to the public showcasing the “regulatory issues” the Treasury believes are “associated” with cryptocurrencies as well as the department’s efforts to regulate the industry and protect Americans.
In the press briefing, which was shortly held after Trump’s infamous tweets blasting Bitcoin and Facebook’s plans to develop Libra, Mnuchin echoed the sentiment of the Former President, stating that it is the Treasury’s belief alongside Trump’s that “Bitcoin is highly volatile and based on thin air.” Mnuchin cited the department’s concerns “about the speculative nature [of] Bitcoin” and the ability to “make sure that the U.S. financial system is protected from fraud” in regard to cryptocurrencies.
“Cryptocurrencies, such as Bitcoin, have been exploited to support billions of dollars of illicit activity like cybercrime, tax evasion, extortion, ransomware, illicit drugs, human trafficking. Many players have attempted to use cryptocurrencies to fund their malign behavior. This is indeed a national security issue.”
Mnuchin also shared some of the Treasury’s initiatives to combat the illicit use” of cryptocurrencies, including money laundering and terrorist financing; which Mnuchin stated are part of the Department of the Treasury’s continuously ongoing efforts to “promote national security through the dissemination of financial intelligence.”
To start, Mnuchin highlighted the establishment of the Financial Stability Oversight Council’s Working Group on Digital Assets, which he stated would enable U.S. financial regulators (such as the SEC, CFTC, OCC, etc.) the ability to work together in collaborative efforts to combat the “risks posed by cryptocurrencies.”
“I also recently established the Financial Stability Oversight Council’s Working Group on Digital Assets. This FSOC group enables U.S. financial regulators, such as FinCEN, the Fed, OCC, CFTC, CFPB, SEC, and other key stakeholders to work together to combat risks posed by cryptocurrencies.”
Additionally, the Secretary noted the Administration’s efforts to push such regulation over the industry internationally by working with other nations through the Financial Action Task Force (FATF):
Given the international nature of cryptocurrencies, we are also going to great lengths to ensure that effective regulation does not stop here at the U.S. border. Last month, led by the United States, the Financial Action Task Force, known as FATF, the global standard setter for AML/CFT — adopted comprehensive measures on how countries must regulate and supervise activities and providers in this space. This was a major step towards harmonizing international regulations concerning cryptocurrencies.
Moreover, Mnuchin stated that all “providers of digital financial services” and “cryptocurrency money transmitters” must comply with the “relevant Bank Secrecy Act obligations” and “register with the Financial Crimes Enforcement Network (FinCEN),” asserting the Treasury’s belief that it has “federal regulatory, supervisory, and enforcement authority” of the industry through FinCEN’s enforcement of the Bank Secrecy Act.
“ The rules governing money service providers apply to physical and electronic transactions alike. As money service businesses, cryptocurrency money transmitters are subject to compliance examinations just like every other U.S. bank. To be clear: FinCEN will hold any entity that transacts in Bitcoin, Libra, or any other cryptocurrency to its highest standards.”
To further assist in the process of establishing an international regulatory framework for the industry, Mnuchin also noted the “work” they had done at the G20 and his then-future plans to attend the G7 Finance Minister event in France to “address” the need for international regulation.
“We have also had extensive work at the G20, and I will be addressing this again this week at the G7 Finance Minister in France.”
Throughout the briefing, Mnuchin also took aim at Facebook’s involvement in the development of Libra, stating the department would take proper steps to preserve the security of the United States financial systems from such developments; be it from Facebook or other cryptocurrency ecosystems:
“With respect to Facebook’s Libra and other developments in cryptocurrencies, our overriding goal is to maintain the integrity of our financial system and protect it from abuse. Treasury takes very seriously the role of the U.S. dollar as the world’s reserve currency, and we’ll continue our efforts to protect our country and secure the U.S. and global financial systems.”
In February of 2020, Mnuchin announced the Trump Administration’s ongoing efforts through a multitude of federal agencies to “introduce regulations for cryptocurrencies intended to crack down” on its usage to facilitate illegal activities in what he called a “national security issue.” During a Senate Hearing before the Senate Finance Committee, Mnuchin stated the Treasury’s FinCEN Bureau would be releasing “significant new requirements” for cryptocurrency-based businesses.
“We want to make sure that technology moves forward but, on the other hand, we want to make sure that cryptocurrencies aren’t used for the equivalent of old Swiss secret number bank accounts” — Secretary Mnuchin speaking before the Senate Finance Committee
Kenneth Blanco, then-director of FinCEN; had been echoing a similar sentiment to that of Secretary Mnuchin, stating in an interview at Georgetown University back in October of 2019 that cryptocurrency-based startups “must follow the U.S. anti-money-laundering (AML) laws or else suffer the consequences.” Both the FinCEN bureau and the Department of the Treasury remained united on their belief that “existing regulations cover most forms of crypto transactions, particularly anti-money laundering rules.” However, President Trump vetoed the Anti-Money Laundering Act of 2020 through his veto of the National Defense Authorization Act; which Forbes reported would have been the most “recent expansion of the Bank Secrecy Act Regime,” limiting the powers of the Department of the Treasury quite significantly.
With the expectation President Trump would come out victorious and assume his second term in Office, the Department of the Treasury made minimal efforts until he officially lost the election in November; where Mnuchin began “working overtime” to push several cryptocurrency-based regulations through FinCEN before Biden was sworn in as the 46th President.
Among them include a proposal to require cryptocurrency exchanges “to store records involving transactions over $3,000 sent to any personal wallets” as well as “report users to FinCEN for cumulative transactions worth more than $10,000 in a single day,” and an additional proposal to mandate Americans “report crypto holdings worth more than $10,000 at any foreign service provider” to FinCEN.
Many companies, organizations, and individuals operating within the industry heavily criticized the regulatory proposals; with the Electric Frontier Foundation calling it a “push for more financial surveillance” despite the fact that cryptocurrency investors already have to report their holdings in their taxes to the IRS. The nonprofit organization Coin Center also issued a public statement, saying it would limit American citizens’ “access to decentralized services” and trustless systems.
Members of the House of Representatives and Senate also criticized the Treasury’s sudden push for such wide-ranging regulations, with nine members of Congress issuing a signed letter to the Department warning that such “hasty rulemaking” would “undermine the legitimacy of the process.”
Square Crypto developer Matt Corallo also stated that there were rumors circulating that Secretary Mnuchin was personally pushing this regulatory agenda before he was replaced by incoming Secretary Janet Yellen:
“Political motivations are always hard to discern, but public rumors have consistently indicated this is a personal push by Mnuchin, not further up or down,” — Matt Corallo in his public statements criticizing the Treasury Department
Although Mnuchin was largely unsuccessful in his final days as Secretary of the Treasury to push such an agenda through and has notably stated “‘it’s fine’ to buy bitcoin as a gold substitute” after leaving office, the Treasury Department under his leadership (as well as the direction of President Trump) attempted to usher in an era of widespread regulatory oversight of the industry through FinCEN’s enforcement of the BSA and other AML regulations before Trump’s term officially ended. With this being the only policy directive officially confirmed to be handed down by President Trump himself, it is clear that Trump, his Administration, and his Treasury Department shared a vision to broadly regulate the industry in a way that would essentially establish a digital financial surveillance state.
The Federal Reserve Under President Trump:
The Federal Reserve under President Trump began efforts to research the establishment of a U.S. Digital Dollar in the form of a Central Bank Digital Currency, otherwise known as a CBDC; as well as the Fed’s FedNow payment processor “designed to directly compete with private banks’ processing of electronic payments.”
First and foremost, the recently-released FedNow payment processing service; launched by the Federal Reserve; was initially announced in August of 2019 during its initial development process. During the Trump Administration, the Federal Reserve was accused of “skirt[ing] laws like the Congressional Review Act and the Paperwork Reduction Act” whilst developing the payment processor; but faced no serious setbacks.
Later in February of 2020 during a Stanford Graduate School of Business Conference, Obama-appointed Fed Governor Lael Brainard announced the Federal Reserve’s active efforts in “conducting research and experimentation related to distributed ledger technologies and their potential use case for digital currencies, including the potential for a CBDC [central bank digital currency].”
In addition, the Federal Reserve Bank of Boston announced it had collaborated with the Massachusetts Institute of Technology (MIT) to research digital currency technologies and their potential implications. They later released their “CBDC Research” in a report in 2021.
It is also important to note that while the Federal Reserve itself does not have direct regulatory authority over cryptocurrencies like the U.S. Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), it played a role during Trump’s Presidency in coordinating with other regulatory agencies such as the Treasury and OCC to address potential risks and concerns arising from cryptocurrencies; specifically regarding its implications in the banking sector.
Besides its efforts to further research and development of a digital currency and government-run payment processor, the Federal Reserve had little to no involvement in the regulatory oversight of the industry.
The 45th President’s Promises On The Campaign Trail
Oddly enough, Trump has remained largely silent on the issue of regulating cryptocurrencies on the 2024 campaign trail; and the official Trump 2024 Campaign website shows no information whatsoever regarding what a second Trump Administration would attempt to do to properly regulate this rapidly growing and evolving industry.
Despite appearing to be personally more accepting of cryptocurrencies, blockchain technology, and NFTs (given his recent NFT launch and recently disclosed millions in Ethereum holdings); Trump has made little to no political statements whatsoever on how his Administration would regulate the industry and precisely which federal agencies/departments would utilize.
Over the course of 2023, there have been virtually no public statements by the Trump Campaign regarding the subject of regulating cryptocurrencies or Trump’s opinions on the industry, nor have there been public statements by the Former President himself on Truth Social and/or verifiable news reports regarding his potential legislative approach.
Unfortunately, the only indication of what a second Trump Administration would accomplish in regard to establishing a regulatory framework over the industry as well as the potential execution of a CBDC is by simply looking back at the policies of Trump’s Administration during his tenure as the 45th President of the United States.
*Disclaimer: The Cardano Times reached out to Trump’s 2024 Campaign team to get a comment on the Trump campaign’s platform regarding cryptocurrencies as well as how a future Trump Administration would again attempt to properly regulate the cryptocurrency industry, we did receive acknowledgment of our requests but did not actually receive an official response to our questions.*
The Trump Administration has been quite uninvolved in the process of truly regulating cryptocurrencies and blockchain technology, with President Trump largely dictating those efforts to his appointed Secretary of the Treasury, head of the OCC, and Chairs of the Fed, SEC, and OCC. Although the Administration had been largely effective and “crypto-friendly” during his short tenure as President, Trump himself operated in a manner indicating a desire to combat the rise of Bitcoin as well as other cryptocurrencies and preserve the arbitrary strength of the U.S. Dollar.
One notable characteristic of the Trump Administration’s approach to cryptocurrency was its restraint in imposing overarching regulations. Instead of implementing a comprehensive regulatory framework, the administration primarily relied on existing regulatory agencies to address specific issues related to cryptocurrencies, such as the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This approach reflected a belief in allowing market forces to drive innovation.
The Trump Administration even engaged with international partners and allies on matters related to establishing a global regulatory framework for cryptocurrencies. This collaboration was evident through participation in global forums and discussions surrounding the potential need for coordinated regulatory approaches to mitigate risks.
The Administration also recognized the potential national security risks associated with certain aspects of cryptocurrencies, particularly its potential use for illicit activities such as money laundering and terrorism financing; as well as its potential impact on the strength of the U.S. Dollar as the world’s primary reserve currency. Forbes also reported that the Administration was relatively friendly and open to the idea of establishing a digital U.S. Dollar, making a number of efforts through the Federal Reserve to research the concept and develop a potential framework.
However, it is truly important to highlight that the CFTC was nearing the completion of an intricate regulatory framework under their agency for the industry; and that the Trump Administration’s appointment of Brian Brooks to head the OCC implemented some of the most effective and historic cryptocurrency regulations in modern history. Although largely growing desperate towards the end of his term, Mnuchin as Secretary of the Treasury also led relatively lax efforts to establish an expansive framework to properly regulate the industry. Chair Jay Clayton and Commissioner Pierce of the SEC also led relatively pro-crypto policies.
It is also crucial to note that the Trump Administration only served one term of four years, achieving both the plethora of anti/pro-crypto policies and regulations through a number of federal agencies in a relatively efficient and timely manner. Given Trump has only served one term and failed to realize everything his Administration had set out to accomplish as well as the fact that he has been extremely active on the 2024 Campaign Trail; it is vital to also understand what a second Trump Administration would implement in terms of cryptocurrency-based regulations.
*Disclaimer: For those looking to learn more about Trump’s Presidency as it relates to cryptocurrency-based regulations and legislative policies, The Cardano Times refers you to a number of independent sources/reviews. These include the Mercer Law Review of Trump’s Presidency titled “The Trump Administration’s Response to the Blockchain Era, the Competitive Enterprise Institute’s Annual Snapshot of the Federal Regulatory State titled “Ten Thousand Commandments,” and Raymond Yeung’s Book China’s Trump Card, CoinDesk’s opinionated analysis of Trump’s Presidency titled “State of Crypto: Unpacking the Trump Presidency’s Crypto Legacy.” The opinions expressed in this analysis are either from direct quotations or based on objective analysis, they do not serve as an endorsement of Trump’s Candidacy in any form whatsoever. This is merely for educational and informative purposes only, and The Cardano Times is not a political organization advocating for one political party over the other.*