The crypto business — from top executives to individual holders — likes to think that it provided the margin of victory in Donald Trump’s surprise victory in the November presidential election.
Trump of course courted crypto for votes and money and promised a lighter regulatory touch than the enforcement crackdown imposed by the Securities and Exchange Commission chief Gary Gensler.
Whether it’s true crypto handed Trump his big win is another matter, but crypto leaders want something in return for the tens of millions of dollars and new voters it brought to Team Trump.
It’s the reason so many of them are seen down at Mar-a-Lago these days as Trump prepares to take over the White House on Monday.
One big ask, On The Money has learned, includes no longer having to deal with the heavy hand of regulation by the SEC, also known as Wall Street’s top cop.
That’s not going to happen according to someone who until recently was among the most plugged in members of the federal government’s regulatory apparatus. Patrick McHenry, the former chairman of the House Financial Services Committee, told me during a fire-side chat I was moderating on Tuesday for the private lender Biz2Credit that the SEC really isn’t going anywhere.
Far from being the bit player the crypto types have been advocating for, the SEC and its new chairman, Trump nominee Paul Atkins, are still very much in charge of the $3.5 trillion digital coin market.
And according to McHenry, the industry’s preferred regulator — the Commodity Futures Trading Commission — with its lighter hand will not take over all of crypto regulation.
The reason, he said, is a law that dates back to the Depression. Under the securities legislation, Bitcoin doesn’t qualify for SEC oversight — which includes investor disclosure — because it wasn’t used as part of an offering to build out the blockchain technology used to make transactions that underpins the digital coin.
Not so for other sales of crypto that financed new blockchain platforms; they will have to go through the SEC regulatory and disclosure gauntlet.
“If you’re going to raise capital in America, raising capital is done through our securities laws,” McHenry said. “So what is native to the SEC …that will not change.”
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