In this post:
- In its action against Coinbase, the SEC is requesting further time to react, implying a potential settlement as it concludes its Biden-era crypto crackdown.
- As Congress promotes three new legislation, Tether is collaborating with U.S. lawmakers to create stablecoin regulations with the goal of having one signed by April.
- With new leadership taking over the CFTC and an emphasis on more crypto-friendly monitoring, Trump’s administration is changing its approach to crypto policy.
The SEC’s anti-crypto enforcement campaign from the Biden administration is coming to an end. The agency informed an appeals court in Manhattan on Friday that a settlement in its well-known case against Coinbase might be imminent.
However, the government needs an additional 30 days to address the legal challenge to the transaction before that can occur.
The 2023 lawsuit sought to compel Coinbase to abide by the same regulations as Wall Street brokerages and stock exchanges. Crypto companies retaliated, arguing that digital assets are not covered by traditional financial regulations. The agency is now moving in a different direction under President Trump.
He directed the SEC and all other federal agencies to create a new regulatory framework for cryptocurrencies last month. This direction, according to the agency’s submission, “may assist the potential resolution” of the Coinbase lawsuit.
On Thursday, Coinbase reported a surge in revenue and profits in its Q4 earnings report. Investors are betting on a Trump-fueled crypto boom, and the numbers reflect that.
Congress is drafting stablecoin legislation with Tether’s assistance.
Tether is aggressively working with US lawmakers to influence stablecoin rules while the SEC takes its time. Due to its lack of thorough audits, the business, which holds 60% of the $230 billion stablecoin market, has generated controversy in Washington. Only quarterly reports from the international accounting firm BDO have ever been made available by Tether.
Hard assets, such as US dollars and Treasury bills, serve as the backing for stablecoins like USDT. With $114 billion in short-term Treasuries in its reserves, Tether is also among the biggest holders of U.S. government debt. The business wants a place at the table as new stablecoin laws approach.
Judges at the federal level are also contributing. Coinbase was granted permission by Judge Katherine Polk Failla to submit an interlocutory appeal last month. Whether current securities regulations even apply to cryptocurrency assets traded on the platform will now be determined by the Second Circuit.
Meanwhile, Congress is working quickly. Last Monday, Representative Bryan Steil, Senator Bill Hagerty, and Representative Maxine Waters introduced three additional stablecoin proposals. The objective? By April, get a bill to Trump’s desk.
Paolo Ardoino, the CEO of Tether, affirmed that the company is collaborating directly with legislators. “We will endeavor to provide guidance on each and every one of these field recommendations while adhering to the regulatory framework to ensure that our voice is heard,” he said.
If passed, the new laws would force Tether to undergo full monthly audits from a U.S.-approved accounting firm and maintain 1:1 reserves with assets pre-approved by regulators. But Ardoino made one thing clear: Tether isn’t backing down.
“We are not going to just throw in the towel and let Tether die just for the sake of not adapting to U.S. legislation,” he said. “But there is still a lot of uncertainty over what’s actually going to happen, and we want our voice to be heard in the legislative process.”
Trump is reshaping financial regulators, and the CFTC is changing its leadership.
The SEC isn’t the only agency changing crypto regulations. As the next enforcement head of the Commodity Futures Trading Commission (CFTC), Brian Young will take over. Acting Chair Caroline Pham, who assumed the role following Trump’s election, made the news on Friday.
In a statement, Pham added, “He is a fearless leader who will create an even more remarkable enforcement program that will remain true to the CFTC’s mission to protect the American public from fraudsters and scammers.”
Prior to assuming the top enforcement position, Young, a former DOJ veteran, oversaw the CFTC’s whistleblower unit. Trump’s larger ambition to change financial oversight in support of pro-business, pro-crypto policies includes his appointment.
Meanwhile,rian Quintenz, a former CFTC commissioner and current head of policy at Andreessen Horowitz’s a16z crypto arm, is set to lead the agency.
Quintenz served on the CFTC from 2017 to 2021 and has been one of the biggest advocates for clearer crypto regulations. His return signals a policy shift at the CFTC, where crypto-friendly policies are now back in play.
In her first major decision, Pham reorganized the CFTC’s enforcement division into two parts: complex frauds and retail fraud, wanting to streamline investigations while focusing on major financial crimes.
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