One dominant investing narrative coming out of the nomination of long-time securities lawyer, former SEC commissioner and crypto believer Paul Atkins as Securities and Exchange Commission chair is that he will be great for the $3.5-plus trillion digital-coin business.
President-elect Trump said as much when he announced Atkins as Wall Street’s top cop Wednesday afternoon (of course, after it was reported in the Post two weeks ago, he was the front-runner).
Atkins, Trump posted on Truth Social, “recognizes that digital assets and other innovations are crucial to Making America Greater than Ever Before.”
Following the announcement, Bitcoin rose above $100,000. That’s nearly a 130% increase in just the past year, though much of the spike came amid Trump’s promises both during the campaign and after the election to de-regulate crypto from the crackdown instituted under Joe Biden.
Exuberance around an SEC led by Atkins, who sits on the board of the Digital Chamber of Commerce, a crypto advocacy group, is a major reason for the recent insane run-ups in even niche cryptos.
One such token is XRP, the native coin of payments firm Ripple, which uses blockchain technology to offer cross border payments it touts as cheaper than the traditional banking system. It’s maybe the highest performing asset trading in the crypto market in recent weeks, and maybe in any market during that time.
Yes. I know, Bitcoin is up a lot, but XRP has skyrocketed nearly 400 percent over the past year—much of it in the aftermath of Trump’s Nov 5 presidential victory.
Recall: Trump’s vow to remove SEC chair and crypto enforcer Gary Gensler on “day one” in courting the crypto vote.
One of Trump’s top crypto advisers, Chris Gianacarlo, told me that among the changes he believes the Trump SEC will reverse is Gensler’s heavy hand on the industry.
That could include dropping the regulator’s case against Ripple, which ironically was first brought by Trump SEC chair Jay Clayton during his first Trump term.
The SEC charged Ripple with refusing to come to the agency and disclose financials as it was selling XRP to build out its platform. Gensler kept the case going. The federal courts then issued a weird ruling that said the XRP that was bought by small investors in the secondary market didn’t mandate disclosure, but the large investors who bought it directly from Ripple were due disclosure.
Gensler’s SEC wanted the script flipped for obvious reasons: Disclosure rules are created to protect small investors, give them more rather than less.
So, what will Atkins do? There are people in the securities-bar ecosystem who know Atkins who say the crypto business won’t get a complete regulatory free pass given Atkins’ core beliefs that the SEC is at its best when it functions as a consumer protection agency with a strong disclosure mandate.
He might not drop the Ripple case, they say.
“I can’t see Atkins letting that court precedent stand,” said one securities lawyer who knows Atkins well.
If that’s the case, and Atkins keeps the Ripple case going, the XRP exuberance will fizzle fast, and maybe the Bitcoin rally as well.
Credit: Source link
