Crypto Firms with Trump Links Gain Ground in SEC Discussions

The meetings will focus on tokenized securities and digital asset custody. This signals that the regulator is adopting a much more collaborative posture, especially after the agency dropped several high-profile lawsuits against crypto firms. However, many of these firms are tied to Trump’s political network. Meanwhile, the Federal Reserve recently rescinded restrictive 2022 and 2023 guidance, easing the path for banks to engage in crypto and stablecoin activities. These rollbacks align with President Trump’s push for pro-crypto innovation. Thanks to the easing regulations and attitudes towards crypto, New Hampshire advanced House Bill 302. This bill will allow the treasury to invest 10% of funds in Bitcoin, alongside other crypto-friendly bills. Overall, the United States is in the middle of a big regulatory shift in its approach to cryptocurrencies, which is evident in developments from the SEC, Federal Reserve, and individual states. SEC Crypto Task Force Expands Industry Talks The US Securities and Exchange Commission’s crypto task force, which is now under the leadership of Commissioner Hester Peirce, maintained momentum in its engagement with the digital asset industry and continued to reassess regulation after the departure of former chair Gary Gensler. On April 24, the task force held a private meeting with representatives from Ondo Finance and legal experts from Davis Polk and Wardwell to deliberate on the issuance and sale of wrapped, tokenized versions of publicly traded US securities. Ondo Finance contributed $1 million to Donald Trump’s inauguration fund, and reportedly wanted to address registration and compliance questions related to tokenized securities. The representatives from the company also floated the possibility of establishing a regulatory sandbox for innovation in the sector. The meeting is part of the very noticeable shift in the SEC’s tone as the agency enters a new phase under Paul Atkins. He was appointed by Trump and was sworn in as SEC Chair on April 21. While Atkins has yet to implement his formal crypto agenda, the agency is reaching out to key industry players. On April 25, the task force will hold a roundtable to discuss digital asset custody, featuring input from major firms including Kraken, Anchorage Digital Bank, and WisdomTree. This discussion will happen amid the heightened institutional interest in crypto custody services after the landmark approvals of crypto exchange-traded funds earlier in 2024. Roundtable timeline (Source: SEC ) Despite the growing cooperation between the SEC and the crypto industry, there are still some questions about the agency’s future enforcement direction. Although the SEC affirmed its commitment to pursuing fraud-related cases, it recently dropped its lawsuit against Hex founder Richard Heart on the same day Atkins assumed office. Moreover, the SEC signaled that it will cease investigations or legal action against several prominent crypto firms, including Ripple, Coinbase, and Kraken. Interestingly, all of these companies have links to donations or executive support for Donald Trump’s 2024 presidential campaign or inauguration events. These developments suggest that the agency may be recalibrating its stance toward digital asset regulation, and could potentially usher in a much more collaborative approach with the industry. Federal Reserve Pulls Back Crypto Restrictions The US Federal Reserve also recently took a big step toward easing restrictions on banks engaging with cryptocurrencies and stablecoins by withdrawing previous guidance that discouraged such activities. In a statement that was released on April 24, the Board of Governors announced it is rescinding its 2022 supervisory letter, which required state member banks to notify the Fed in advance of any crypto-related plans or operations. Going forward, the central bank stated that all crypto activities will be evaluated through its standard supervisory process. (Source: Board of Governors of the Federal Reserve System ) The Federal Reserve also withdrew its 2023 guidance that imposed limitations on how state banks could interact with stablecoin ecosystems. Initially, this guidance pointed out various concerns, including the potential for crypto assets to affect financial stability, compromise consumer protection, and introduce systemic risks through mechanisms like destabilizing bank runs or payment system disruptions. It also flagged the use of cryptocurrencies in illicit activities like money laundering and terrorist financing. In a broader regulatory rollback, the Fed, alongside the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, retracted two statements from 2023 that warned banks about working with crypto firms potentially engaged in fraudulent behavior. These earlier joint advisories criticized misleading disclosures from crypto companies, and explained that such practices could cause serious harm to both retail and institutional investors. This move was one of the Federal Reserve’s first major crypto-related actions since President Donald Trump’s return to office and aligns with the broader administrative strategy to position the United States as a global leader in financial innovation. It also follows the Securities and Exchange Commission’s revocation in January of a rule that required banks to treat held crypto assets as liabilities on their balance sheets. This accounting standard was seen as a major barrier to institutional adoption of digital assets. New Hampshire Advances Crypto Investment Bill Thanks to the easing regulations, many US states are making a lot of progress with their own crypto bills. A bill that will allow New Hampshire to invest a portion of its state funds in digital assets and precious metals recently advanced to a full Senate vote after receiving approval from a second committee on April 23 in a 4-1 vote. (Source: General Court of New Hampshire ) The bill is known as House Bill 302, and the legislation was first introduced in January and passed the New Hampshire House earlier this month by a narrow margin of 192–179. If passed by the Senate and signed by the governor, the bill will authorize the state treasury to allocate up to 10% of its general funds into cryptocurrencies with market capitalizations exceeding $500 billion. Currently, this is a category limited only to Bitcoin. The proposal started a debate among lawmakers. Democratic Representative Terry Spahris is very much opposed to the bill, and argued that the bill is redundant and potentially risky. Spahris also suggested that the state treasurer already possesses the necessary authority to manage investments without additional legislation. In contrast, Republican Representative Jordan Ulery expressed support, and stated that the bill could provide a massive return on investment for the state. Beyond HB 302, New Hampshire is also advancing two other blockchain-related bills . HB 639 focuses on dispute resolution and regulatory clarity for blockchain technologies, while HB 310 addresses real-world asset tokenization and stablecoin integration. The state’s legislative momentum mirrors broader crypto trends, with Arizona taking an even more aggressive stance by exploring the creation of a dedicated strategic Bitcoin reserve, potentially making it the first US state to do so.

Source: Coinpaper