PHFintech: Crypto Policy Tracker - December 6, 2024

The 119th Congress is positioned to be the most pro-crypto in history, reflecting a growing acknowledgment of the digital asset industry’s significance. What makes this moment truly remarkable is the unprecedented support of crypto in the incoming executive branch, with President-elect Trump signaling strong support for crypto innovation and acting to appoint key pro-crypto officials to top positions in his administration. This week’s tracker highlights recent administration-personnel announcements, who will play pivotal roles in shaping the future of U.S. digital asset regulation. These developments signal a major milestone in forming the nation’s approach to crypto policy.

Vice President-elect J.D. Vance

• The Vice President-elect has been an advocate for crypto. During his time in the Senate, Senator J.D. Vance (R-OH) promoted pro-crypto legislation, including drafting bills aimed at clarifying the regulatory roles of the SEC and CFTC concerning digital assets.
• Most notably, he proposed the Financial Regulatory Accountability Act of 2023 (S.2335), a bill to protect banks from regulatory pressure to cut ties with crypto platforms, and released a more pro-industry draft of the Financial Innovation and Technology for the 21st Century Act (FIT21) bill. Further, Vance voted to overturn Staff Accounting Bulletin 121, which is guidance from the SEC’s Office of the Chief Accountant that would make it very difficult for U.S. banks subject to SEC jurisdiction to custody crypto assets.
• His pro-crypto stance is expected to significantly influence the incoming administration’s policies, potentially fostering a more favorable climate for crypto adoption and regulation in the United States.

U.S. Securities and Exchange Commission Chair Nominee, Paul Atkins

• Paul Atkins, the nominee for SEC Chair, served as a commissioner of the SEC from July 29, 2002 to 2008 under President George W. Bush.
• Atkins has expressed his concerns about the broad scope of the Dodd-Frank Act, a sweeping financial reform law passed in the aftermath of the 2008 financial crisis. Atkins has advocated for regulatory frameworks that ensure oversight without hindering economic growth or innovation.
• Atkins is the Founder and Chief Executive Officer of Patomak Global Partners, a Washington, D.C.-based consultancy that works with the financial services industry, including some cryptocurrency companies.
• Atkins is the co-founder of the Token Alliance at The Digital Chamber and an advisory board member.
• Both Chair Gensler and Commissioner Lizarraga will be stepping down from the SEC in January. That will leave the SEC with a 2-1 Republican majority until Atkins and an unnamed Democrat commissioner are confirmed by the Senate.
• Current SEC Commissioners Hester Peirce or Mark Uyeda will likely be the acting SEC chair until Atkins is confirmed by the Senate and sworn in, given Chair Gensler’s resignation will be effective as of January 20, 2025. Commissioners Peirce and Uyeda both worked for Atkins when he served at the SEC.

White House Artificial Intelligence and Crypto Czar, David Sacks

• David Sacks has been appointed as White House Artificial Intelligence and Cryptocurrency Advisor, commonly referred to as the “AI and Crypto Czar.” This newly created position sends a strong signal that the White House intends to play a central role in shaping a meaningful crypto policy.
• Sacks served as PayPal’s first chief operating officer and co-founded Craft Ventures, a venture capital firm investing in early-stage technology startups.

U.S. Treasury Secretary Nominee, Scott Bessent

• Scott Bessent has been nominated as the next Secretary of the Department of the Treasury. He currently serves as Chief Executive Officer and Chief Investment Officer of the hedge fund Key Square Capital Management.
• Bessent has expressed interest in financial innovation, including cryptocurrencies, positioning him as a potential advocate for integrating digital assets into the broader economic framework.

Deputy Treasury Secretary Nominee, Michael Faulkender

• Michael Faulkender has been nominated for the position of Deputy Secretary of the Department of the Treasury.
• Faulkender previously served as Assistant Secretary for Economic Policy at the U.S. Department of the Treasury, where he advised on domestic and international economic issues.

Department of Government Efficiency (DOGE), Elon Musk and Vivek Ramaswamy

• Elon Musk, CEO of Tesla and SpaceX, has been appointed to co-lead the newly established Department of Government Efficiency (DOGE) alongside entrepreneur Vivek Ramaswamy.
• During this election cycle, Ramaswamy ran for President of the United States but withdrew during the primaries.
• Musk has been an advocate for cryptocurrencies, including Dogecoin. His engagement with digital currencies reflects a broader interest in financial innovation.
• The establishment of DOGE is anticipated to bring a tech-driven approach to enhancing governmental efficiency.

Secretary of Commerce Nominee, Howard Lutnick

• Howard Lutnick, the CEO of Cantor Fitzgerald and a crypto proponent, has been tapped to lead the Commerce Department, a position with significant influence over technology policy, including crypto and generative AI. The Commerce Department is responsible for matters related to technology.
• Lutnick is an advocate for crypto. This appointment underscores the Trump Administration’s potential impact on emerging technologies.

Small Business Administration Nominee, Kelly Loeffler

• Former U.S. senator Kelly Loeffler (R-GA) has been nominated to lead the Small Business Administration (SBA). Loeffler served in the Senate from 2020 to 2021.
• Loeffler was also the CEO of Bakkt, a digital asset platform. Loeffler’s business background is expected to inform her approach at the SBA, focusing on reducing regulatory burdens and promoting growth and innovation among small businesses.

Director of the National Economic Council, Kevin Hassett

• Kevin Hassett served as chairman of the Council of Economic Advisers (CEA) during Trump’s first term as president, where he played a role in advancing tax reform and trade policies.
• Hassett will work closely with the Secretary of Treasury to implement Trump’s economic policy objectives and coordinate with the other agencies on crypto issues.

Secretary of the Department of Health and Human Services Nominee, Robert F. Kennedy Jr.

• Robert F. Kennedy Jr., the nominee for Secretary of the Department of Health and Human Services, has been an advocate for Bitcoin. Kennedy has also proposed integrating Bitcoin into national financial policies, including establishing a Bitcoin Strategic Reserve to address the national debt crisis.