SEC Meets with Trump-Linked Firms on Crypto Regulation
The agency's engagement with companies linked with the president raises concerns about potential bias, as critics question whether regulatory decisions could favour politically connected entities.
The US Securities and Exchange Commission's crypto task force has met with representatives from Ondo Finance and law firm Davis Polk and Wardwell to discuss tokenised securities regulation.
Both firms have ties to US President Donald Trump, with Ondo Finance having donated $1 million to Trump's inauguration fund, while Davis Polk represents Trump's Truth Social in launching crypto-linked ETFs.
The discussions, led by SEC Commissioner Hester Peirce on April 24, focused on registration requirements, compliance frameworks, and the potential for a regulatory sandbox for tokenised assets.
This engagement comes just days after Paul Atkins, a Trump appointee, was sworn in as SEC chair on April 21, replacing Gary Gensler, who had maintained an aggressive enforcement stance towards crypto firms.
The SEC has dropped high-profile lawsuits against major crypto players Ripple, Coinbase, and Kraken. The agency has also ceased investigations, including one against Hex founder Richard Heart, all on the same day Atkins took office.
The closure of these enforcement actions, combined with outreach to Trump-supporting firms, suggests a more industry-friendly approach to crypto regulation under the new administration.
The SEC has scheduled a roundtable on crypto custody for April 25, featuring discussions with exchange Kraken and other market participants. This focus on infrastructure indicates the agency is prioritising frameworks for institutional crypto adoption.
The move towards clearer guidelines for tokenised securities and digital asset custody could provide regulatory certainty that has long been sought by the crypto industry.
While the crypto community may welcome reduced enforcement and clearer rules, the involvement of firms with close ties to Trump raises questions about regulatory impartiality and conflict of interest.
The SEC's apparent favouritism towards Trump-supporting entities could create an uneven playing field in the rapidly evolving crypto market and potentially undermine public trust in the regulatory process.
As the US recalibrates its approach to crypto regulation, other jurisdictions may adjust their frameworks to compete for market share in the growing digital asset space.
The SEC's pivot may provide short-term benefits for the crypto industry, but long-term success will depend on developing transparent, equitable regulation that balances innovation with investor safety—a delicate balance that remains to be seen under the new leadership.