Forward the Original Title: Crypto Renaissance: A Closer Look at Trump’s Crypto Strategy

Following Trump’s victory in this year’s U.S. election, the “MAGA” movement has swept the entire crypto market with overwhelming force. Under the America First doctrine, Trump envisions cryptocurrency as a vital component of the U.S. financial system and is initiating plans to establish Bitcoin as a national reserve asset. As the new administration takes shape, numerous crypto-friendly officials have assumed key positions. Meanwhile, the Trump family has entered the blockchain economy through “World Liberty Finance” (WLFI), investing over $75.26 million in crypto-related assets. This article analyzes Trump’s appointments and blockchain investments to outline the emerging roadmap for an American “crypto renaissance” under Trump’s leadership.

New Administration Appointments

The leadership team of Trump’s new administration includes several crypto-friendly figures. Among them, the newly established “Presidential Advisory Committee on Digital Assets” is chaired by “Crypto Czar” David Sacks, a former COO of PayPal, who will also serve as the U.S. government’s AI and crypto chief. Sacks’ personal investment portfolio and his leadership at Craft Ventures are heavily tied to crypto asset management and Bitcoin infrastructure projects, such as BitGo and Bitwise (crypto asset management), and Lightning Labs and Voltage (Lightning Network applications). It is anticipated that under Trump’s administration, compliant crypto custody products will advance further, potentially creating more suitable asset outlets for Bitcoin reserves.

Meanwhile, Bo Hines, a former college football player who graduated from Yale University and Wake Forest University School of Law and twice ran for a North Carolina House seat, will serve as the committee’s executive director. Although Hines lacks direct cryptocurrency experience, his appointment reflects the urgency with which the Trump administration views crypto compliance as a bottleneck that needs to be addressed. The Republican Party’s strong majority across the three branches of government also clears significant hurdles for advancing crypto compliance policies in the U.S. moving forward.

Beyond Trump’s “inner circle”, various government departments are also constantly recruiting crypto-friendly people. For example, in the U.S. Commodity Futures Trading Commission (CFTC), which played an important role in previous crypto compliance cases, popular candidates include Brian Quintenz, head of crypto policy at a16z (playing a supervisory role on U.S. crypto futures contracts), Perianne Boring (a staunch advocate for the Bitcoin mining industry) and Caroline Pham (who proposed a principled framework to regulate digital asset markets and tokenization in 2023), among others.

As for the U.S. Securities and Exchange Commission (SEC), Trump’s decision to dismiss current Chairman Gary Gensler is already a certainty. He also nominated Paul Atkins as the new SEC Chairman on December 4. As CEO of consulting firm Patomak Global Partners, Paul He served as an SEC commissioner during the George W. Bush administration and has extensive experience in the financial and cryptocurrency sectors.

Atkins also co-chaired the crypto advocacy group Token Alliance, where he criticized the current SEC chairman Gary Gensler’s stringent regulatory policies toward the crypto industry. Atkins argued that such policies risk driving the crypto industry out of the U.S. He advocates for reducing regulation, emphasizing the importance of “common-sense regulation” and free markets. Industry leaders hope Atkins will push for a clearer regulatory framework, lower compliance costs, and foster innovation. Trump’s prior phone call with Coinbase CEO Brian Armstrong further highlights his administration’s focus on advancing crypto compliance within the U.S. framework.

Paul Atkins (left) speaks with then-SEC Chairman Christopher Cox during a House Financial Services Committee hearing on Capitol Hill on June 26, 2007, in Washington, DC.

In terms of progress in the related legislation, Trump plans to repeal the SAB 121 accounting bulletin, which requires custodians to treat cryptocurrency assets held by customers as liabilities and report them at fair value on the balance sheet. This regulation has increased the financial burden on custodians, exchanges, and similar entities. Another initiative Trump seeks to terminate is Operation Choke Point 2.0, a U.S. government effort to pressure the cryptocurrency industry by restricting its access to banking services through regulatory actions. This initiative is considered a continuation of the 2013 “Operation Choke Point,” which aimed to indirectly target specific industries via the banking system.

Under this operation, agencies such as the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve issued joint statements or “cease letters,” instructing banks to halt or limit crypto-related business activities. This led to several cryptocurrency companies and founders having their bank accounts closed without cause, and it impacted the crypto acceptance policies of banks like Signature Bank. Trump also plans to advance the implementation of the 21st Century Financial Innovation and Technology Act (FIT 21) during his term. This legislation defines key terms such as “digital assets,” “blockchain systems,” and “decentralized governance systems.” It categorizes digital assets into three types: restricted digital assets (similar to securities), digital commodities, and licensed payment stablecoins. The act delineates the regulatory responsibilities of the SEC and CFTC, strengthens disclosure requirements, and mandates transparent and accurate information from digital asset issuers and exchanges. It also includes consumer protection provisions and dispute resolution mechanisms, underscoring Trump’s intent to lay a strong foundation for the steady compliance of cryptocurrencies during his administration.

For the U.S. crypto market, its development has generally been in line with compliance progress, but the process has not been smooth sailing. Previously, the collapse of the FTX incident and its aftermath had a profound impact on the market, not only shaking investor confidence but also exposing the shortcomings of the regulatory framework. This incident has led to tighter scrutiny of the cryptocurrency industry by regulatory agencies. Many projects have struggled with compliance issues, and overall market progress has been unsatisfactory.

However, as personnel changes and policy adjustments occur at key regulatory agencies like the CFTC and SEC, the market is beginning to see new opportunities. Under this shifting landscape, some tokens have started to operate within a clearer regulatory framework, paving the way for more defined compliance pathways.

For instance, XRP, previously hindered by SEC litigation, has gradually found its footing as the case progresses and the regulatory environment improves, restoring some market confidence in the token. Similarly, other tokens and projects are starting to innovate under clearer rules, reducing compliance costs stemming from regulatory uncertainty and fostering a more sustainable development trajectory.

The “Weather Vane” Role of WLFI

At the end of August this year, Eric Trump, Trump’s second son and current executive vice president of the Trump Organization, announced the official launch of the crypto project WLFI and made frequent moves on the chain. The project had previously been seen as a potential source of campaign funds for the Trump family.

After a series of twists and turns, WLFI secured $20 million in funding during its initial offering. However, its contractual provision granting the Trump family 75% of the profits without liability raised concerns within the crypto community. With Trump’s inauguration, WLFI is expected to serve as a “weather vane” for the U.S. crypto market, showcasing the family’s strategic preferences for cryptocurrency projects.

After delving into WLFI’s portfolio, we can see that it is also inseparable from the relationship between Trump’s team. Taking WBTC as an example, after Justin Sun invested $30 million in WLFI, WLFI’s on-chain Bitcoin reserves were transferred to WBTC (interestingly, David Sacks also invested in WBTC custodian BitGo).

On the other hand, the portfolio and application behind it are also related to an American VC Polychain, and in WLFI, Luke Pearson, the general partner of Polychain Capital, is listed as one of the advisory team members. The Scroll deployed by WLFI itself is one of the L2 investments led by Polychain, and Sandy Peng, one of the founders of Scroll, is also part of WLFI’s advisory board.

As the Trump administration’s crypto policies take shape, WLFI is poised to play an increasingly significant role as a “weather vane” in the crypto market. Its asset allocation strategies and strategic partnerships are expected to continue influencing market trends, with support from professional institutions like Polychain providing ongoing momentum.

In the future, WLFI may continue to focus on investing in high-quality DeFi assets while enhancing its brand value and market influence through collaborations with other projects. In summary, WLFI, leveraging its unique asset allocation, strategic partnerships, and political influence, has already become a pivotal indicator in the U.S. crypto market. Its ongoing development will remain closely watched by the market and provide important reference signals for investors.

Conclusion

Trump’s victory has brought unprecedented development opportunities to the U.S. cryptocurrency industry. By appointing crypto-friendly figures, promoting compliance policies, and actively participating in family projects, the Trump administration is laying out a blueprint for an American-style “crypto renaissance.”

By emphasizing legal compliance and fostering close collaboration with industry leaders, Trump’s crypto strategy aims not only to solidify the United States’ leadership in the global digital economy but also to inject new momentum into the standardization and innovation of the cryptocurrency market.

However, this path to revival is not without challenges. As policies are gradually implemented and the market continues to mature, the U.S., under the MAGA banner, is poised to become the global center of the crypto economy. Whether Trump’s crypto strategy can truly achieve this “renaissance” will not only shape the future of the American financial system but also profoundly influence the dynamics of the cryptocurrency industry. Whether cryptocurrencies will emerge as the ultimate winners alongside the Trump effect or falter as mere pawns in a political chess game remains a question for history to answer.

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