On the campaign trail, then-candidate Trump made promises that he would prioritize the crypto industry. Expecting these promises to be fulfilled, the prices of many notable crypto assets jumped after his election. Now, President Trump has returned to the White House, and in his first week, he wielded executive authority in an unprecedented way. Among the new administration's dramatic moves were three developments of great significance for the crypto industry. These early moves suggest a lighter enforcement touch and a recognition of the need for regulatory clarity. As detailed below, these initial moves lay the groundwork for what could come next from the Trump administration.
SEC 2.0
On its first full day in office, the SEC's Acting Chair promised that change would come. On January 21, 2025, the SEC announced that it would be forming a task force led by long-time-crypto-supporter Commissioner Hester Peirce (affectionately referred to in the crypto industry as "crypto mom") to "set the SEC on a sensible regulatory path."1 The announcement promised that the SEC would depart from what it described as the SEC's past approach of relying "primarily on enforcement actions to regulate crypto retroactively and reactively" while "often adopting novel and untested legal interpretations along the way." To help bring about the change to SEC 2.0, the task force will coordinate across the federal government, including with the Commodity Futures Trading Commission (CFTC), and with state and international counterparts to design a regulatory framework for crypto assets "that protects investors, facilitates capital formation, fosters market integrity, and supports innovation."2 Finally, the announcement noted that, while the SEC would work under the existing statutory framework, it would also "coordinate the provision of technical assistance to Congress as it makes changes to that framework."
Undoing a Practical Impediment to Holding Digital Assets: SAB 121 Rescinded
The SEC also revoked an accounting rule adopted during the Biden administration that provided practical impediments to financial institutions holding digital assets. Specifically, on January 23, 2025, the SEC announced the Staff Accounting Bulletin No. 122 (SAB 122).3 SAB 122 rescinded SAB 121, which had required on-balance sheet accounting of crypto assets under custody (recording an asset and a liability on the entities' balance sheets), which was a significant departure from the treatment of other assets held under custody and made it prohibitively costly for financial institutions to hold crypto assets in light of leverage requirements.4 SAB 122 will allow these institutions more flexibility in holding crypto assets by requiring that banks only follow broader accounting standards applicable to other assets in custody. (Commissioner Peirce celebrated this change on social media.5 )
Trump's Executive Order
Finally, President Trump's executive order related to crypto further indicates his willingness to collaborate with the industry. On January 23, 2025, President Trump signed the executive order titled "Strengthening American Leadership in Digital Financial Technology."6 The stated purpose of this order was to "support the responsible growth and use of digital assets, blockchain technology, and related technologies across all sectors of the economy."7 The executive order revoked the Biden Administration's executive order related to crypto, established a working group, and prohibited agencies from developing central bank digital currencies (CBDC).8 Biden's executive order also asked for reports from relevant agencies and suggested a CBDC may benefit the United States.9 Opposition to CBDC's became a political issue in the lead up to the election, with vocal opposition from many conservatives,10 and Trump's executive order notably prohibits development of a CBDC.11
Like the SEC task force, the Trump executive order suggests that the new administration may push for a comprehensive regulatory framework for crypto assets. It calls for a "President's Working Group on Digital Asset Markets," including the Treasury Secretary, Attorney General, and other cabinet-level officials, that "shall propose a Federal regulatory framework governing the issuance and operation of digital assets, including stablecoins, in the United States."12
Looking Ahead
If the administration succeeds in adopting such a framework, then it would bring the United States more in line with the growing international norm toward adopting crypto-specific regulatory systems—such as the European Union's new MiCA Regulation, which came into full force at the end of 2024.13 Many voices in the crypto industry have long called for such an approach in the United States.
Together, these three actions represent a clear shift towards a more open and accommodating crypto policy in the United States. However, none of these actions in themselves provide any legal protections for crypto. Rather, they set the stage for what may be to come.
Footnotes
1. "SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force," (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.
2. "SEC Crypto 2.0: Acting Chairman Uyeda Announces Formation of New Crypto Task Force," (Jan. 21, 2025), https://www.sec.gov/newsroom/press-releases/2025-30.
3. SEC, "Staff Accounting Bulletin No. 122," (Jan. 23, 2025), https://www.sec.gov/rules-regulations/staff-guidance/staff-accounting-bulletins/staff-accounting-bulletin-122.
4. SEC, "Staff Accounting Bulletin No. 121," (Mar. 31, 2022), https://www.sec.gov/regulation/staff-interpretations/accounting-bulletins/old/staff-accounting-bulletin-121.
5. Nikhilesh De, "SEC Withdraws Controversial Crypto Financial Reporting Bulleting," (Jan. 24, 2025), https://www.coindesk.com/policy/2025/01/23/sec-withdraws-controversial-crypto-tax-accounting-bulletin.
6. Exec. Order, Strengthening American Leadership in Digital Financial Technology, (Jan. 23, 2025), https://www.whitehouse.gov/presidential-actions/2025/01/strengthening-american-leadership-in-digital-financial-technology/.
7. Strengthening American Leadership in Digital Financial Technology, § 1(a).
8. Strengthening American Leadership in Digital Financial Technology, §§ 3–5.
9. Exec. Order No. 14067, Ensuring Responsible Development of Digital Assets. (March 9, 2022), https://www.federalregister.gov/documents/2022/03/14/2022-05471/ensuring-responsible-development-of-digital-assets.
10. See, e.g., Zachary Warmbrodt, "Conservatives rally against CBDC," (Feb. 27, 2024), https://www.politico.com/newsletters/morning-money/2024/02/27/conservatives-rally-against-cbdc-00143465.
11. Strengthening American Leadership in Digital Financial Technology, § 5.
12. Strengthening American Leadership in Digital Financial Technology, § 4(c)(i).
13. European Securities and Markets Authority, "Markets in Crypto-Assets Regulation," https://www.esma.europa.eu/esmas-activities/digital-finance-and-innovation/markets-crypto-assets-regulation-mica.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
