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Cryptocurrency moguls heavily backed Donald Trump’s bid for the presidency, and he has already begun to pay them back by deregulating the crypto industry. Combined with Mr. Trump and his family’s own dive into the market, that may enrich him and his circle. But it may also worsen all kinds of criminal activity and risk the health of our financial markets.
In the last several years, the Securities and Exchange Commission was moving to regulate crypto, recognizing its potential to destabilize traditional finance. Historically, the S.E.C.’s enforcement priorities have shifted only slightly from administration to administration. They are rarely, if ever, abandoned altogether.
Mr. Trump has ended this tradition. In little more than three months, the S.E.C. has eliminated its crypto-enforcement program, dismissing, closing or “pausing” nearly every crypto-related lawsuit, appeal and investigation. The S.E.C. has also, among other steps, gutted its Crypto Assets and Cyber Unit, dropping the word “crypto” from its name, slashing its ranks by 40 percent and reassigning its top litigator to the I.T. department.
Meanwhile, Mr. Trump and his family have launched numerous crypto ventures, including starting up their own crypto company and currency, which help investors anonymously fill the Trump coffers. The Trumps have said they will partner with the Singapore-based crypto exchange to introduce a series of crypto-related funds and kicked off $Trump and $Melania memecoins — a risky type of crypto derived from internet memes or trends. (Dogecoin, a memecoin favored by Elon Musk, inspired the name of his Department of Government Efficiency.) In February, the S.E.C. declared that memecoins were entertaining novelties and collectibles, not “securities,” and announced that it would not subject them to oversight.
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