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AboutBitcoin Team January 27, 2025 No comments News permalink

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Trump Administration’s Initial Stance on Crypto

Donald Trump won the US presidential election with strong support from Bitcoin & crypto investors. Trump won millions of votes by making many promises before the election. Now, his administration has been running the show for a week. Let’s look at what actions the new government has taken regarding cryptocurrencies.

Gary Gensler’s resignation

Donald Trump received the biggest applause at the Bitcoin 2024 conference in July when he announced that he would fire Gary Gensler on his first day. Gary Gensler has been the chairman of the US Securities and Exchange Commission (SEC) for the past four years.

The Biden administration, led by Gensler, waged an all-out war on cryptocurrencies. The SEC sued the largest companies in the industry in the United States and even offshore exchanges, such as Binance and KuCoin.

Donald Trump didn’t have to take action on his first day, as Gary Gensler announced his resignation a couple of weeks after Trump’s election victory.

Gensler’s last day at work was Friday, January 17, 2025. Coincidentally or not, Donald Trump launched his meme coin a couple of hours after Gensler had stepped out of the SEC office.

Mark Uyeda will serve as the SEC’s acting chairman until new chairman Paul Atkins takes office. Atkins is seen as a pro-crypto official. The SEC will likely also receive very different guidance from the Trump administration than it has in recent years.

Ross Ulbricht

Ross Ulbricht was one of Donald Trump’s campaign promises aimed explicitly at the Bitcoin community. Trump promised to commute Ulbricht’s prison sentence on his first day in office. The president kept his promise, and Ulbricht left prison late Tuesday night.

Ross Ulbricht is best known as the founder of Silk Road, a dark web marketplace where people could purchase drugs and other illicit goods and services using bitcoins.

Ulbricht was arrested in 2013 and convicted in 2015. His sentence was two life sentences plus 40 years without the possibility of parole. Ulbricht’s sentence has been widely considered excessive for the crimes he committed.

Ulbricht has campaigned with the support of the Bitcoin community throughout his sentence but to no avail. He spent over 11 years in prison before being released. The Bitcoin community is now eagerly awaiting what Ulbricht will do next. In the coming months, he will likely tell his story on popular Bitcoin podcasts.

The executive order on crypto

The Trump administration also issued an executive order regarding crypto in the first week. It was a high-level overview of the crypto sector, meaning the executive order did not contain many details of future actions.

You can get a good summary of its contents from this X-thread:

The following points can be highlighted from the executive order:

  • Crypto wallets: Americans have the right to manage their crypto in self-custody wallets
  • Blockchains: Americans have the right to use open blockchains and perform network validation and mining
  • Stablecoins: The United States supports regulated dollar-based stablecoins
  • Regulation: Regulation about digital assets will be developed in the United States
  • CBDC: The United States will not introduce a central bank digital currency

The executive order also mentions open access to banking services, effectively ending Operation Chokepoint 2.0. This was a process initiated by the previous administration that sought to block companies operating in the crypto sector from accessing banking connections.

It is also worth noting that last week, the SEC repealed the SAB 121 regulation that prevented banks from custoding crypto. This is an important decision that will have long-term impacts on the industry.

Bitcoin reserve

Bitcoin investors have been pinning their hopes on the Bitcoin Reserve in recent months. At the moment, the United States is not launching a Bitcoin Reserve despite the high expectations.

We have repeatedly stated that Donald Trump proposed a type of reserve at the Bitcoin 2024 conference in July. Trump suggested that the United States would not sell bitcoins seized from criminals.

Bitcoin investors have since gone wild over Senator Lummis’s bill, which proposes creating a reserve of one million bitcoins for the United States. This proposal has never received widespread support in the US Congress, and Trump has not publicly supported it.

It’s good to remember that the United States has a terrible problem with a deficit and a mountain of debt. It can’t simultaneously cut spending, lay off government workers, and buy billions of dollars in bitcoin. That decision will never get support in Congress.

The aforementioned executive order also states the following:

The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.

The US is likely to build a crypto reserve from seized cryptocurrencies. This X-post lists all the crypto the US has currently seized.

Summary

Crypto investors can be pretty pleased with the first steps taken by the Trump administration. The president has mostly kept his promises to the community. Gensler has resigned, Ross Ulbricht has been released, and the Trump administration has given clear guidelines for developing pro-crypto regulations.

The most significant irritation has been directed at the Bitcoin reserve or the lack thereof. Bitcoin maximalists have been annoyed by the term digital asset stockpile, which includes other cryptos, not just Bitcoin.

Ripple, in particular, has come under fire from Bitcoin maximalists. This is how well-known Bitcoin maximalist Jack Mallers opened up about the subject.

Bitcoin supporters are irritated by the idea that the United States Bitcoin reserve would include, for example, XRP tokens or other cryptocurrencies.

There was also news over the weekend about Eric Trump’s comments that US cryptos would be tax-free investments in the future. Although the news was on Yahoo Finance, it is worth noting that the Eric Trump comment quoted in it is from mid-December.

The word tax is not found anywhere in the executive order. So far, it is unclear whether “Made in USA” cryptos will receive any benefits from the Trump administration. The question of how to define such cryptocurrencies is also completely open. For example, would Bitcoin be a “USA coin” or not?

We will update you on developments in the US as the Trump administration begins to take its next steps. The real work is just beginning.

AboutBitcoin Team
AboutBitcoin Team

Hey! We're the AboutBitcoin squad, a team of crypto lovers who've been all about cryptocurrency since 2017. Every week, we drop the latest news and cool insights from the crypto world. Come hang with us as we dive into the crazy, ever-changing scene of cryptocurrencies – it's gonna be an awesome adventure!