Trump Regulators Set to Fill Void on Crypto Policy as Congress Stalls

The US crypto industry is bracing for a shift in regulatory policy as Congress's sweeping crypto legislation stalls. President Donald Trump's regulators, particularly the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), are set to fill the void with new rules. The SEC has been working on a rule to exempt certain token offerings from securities rules, which is expected to advance in coming weeks.

Industry executives say that while Trump's regulators have shown support for crypto reform, their efforts may be contentious and vulnerable to reversal by future administrations. The Clarity Act aims to define which tokens qualify as securities versus commodities, but without legislation, regulations will be subject to the shifting political climate and court challenges.

Some executives fear that a future administration could install crypto hawks like former SEC Chair Gary Gensler, who sued dozens of crypto companies under Biden. Josh Riezman, chief legal and strategy officer at GSR, expects the SEC and CFTC to push through ambitious rules, but notes that these may be vulnerable to reversal.

The CFTC has emphasized the importance of creating a durable regulatory framework for cryptocurrencies, while Democrats generally favor tougher safeguards against money laundering, fraud, and conflicts of interest. Traditional Wall Street firms have also expressed opposition to some SEC and CFTC crypto policies, which could lead to litigation and tie up new rules in court.