Joe Biden will remain president for the rest of his term. The focus now is on who will replace him in the upcoming election against Trump. Biden’s sudden departure from the U.S. presidential race initially caused some panic in the crypto markets. Bitcoin fell by close to $1,500 in under 30 minutes as investors digested the news, uncertain about the new Democratic nominee. However, the downturn was brief as traders began to see potential bullish developments in crypto policy.

Industry leaders have expressed frustration with the Biden administration’s stance on digital assets, claiming it has stifled innovation and harmed consumers. In March 2022, there was initial optimism when Biden signed an executive order on cryptocurrencies, directing government agencies to assess their risks and benefits. At the time, some believed this was a sign that the White House was taking the promise of this technology seriously.

Six months later, Biden released an official framework for crypto regulation, but many in the industry felt it lacked detail and substance. A significant concern was the ambiguity over which agencies should oversee the market, creating a tug of war between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Paul Grewal, chief legal officer at Coinbase, has repeatedly called for action, warning in June 2023 that the U.S. is “falling behind” compared to other countries due to a lack of clear rules and regulations for crypto. He noted, “The U.S. is pushing the technology and the innovators overseas due to lack of clear rules and regulations for crypto. The rest of the world is not waiting for us, and they are taking advantage of our absence.”

“The U.S. is pushing the technology and the innovators overseas due to lack of clear rules and regulations for crypto. The rest of the world is not waiting for us, and they are taking advantage of our absence.”

Grewal praised bipartisan efforts in Congress to create clear regulations for crypto firms, but tangible legislation has yet to emerge. Recently, Biden controversially vetoed a bill that would have scrapped a controversial accounting policy enforced by the SEC, known as SAB 121. Kirstin Smith, CEO of the Blockchain Association, criticized this rule as a punitive measure against digital assets, making it difficult for financial institutions to custody crypto on behalf of customers.

Biden defended his administration’s stance, stating, “My administration will not support measures that jeopardize the wellbeing of consumers and investors. Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of cryptoasset innovation.” Despite expressing eagerness to work with Congress on developing a comprehensive and balanced regulatory framework, such a framework has yet to materialize.

The Biden administration also found itself entangled in one of the biggest scandals in the crypto industry: the collapse of FTX. Disgraced CEO Sam Bankman-Fried (SBF) had donated $5.2 million to Biden’s presidential campaign in 2020, making him the second-largest contributor. SBF also donated tens of millions to Democratic candidates before his empire crumbled, revealing that customer funds had been misappropriated. White House Press Secretary Karine-Jean Pierre faced uncomfortable questions about when this cash would be returned to compensate victims.

As Biden recovers from COVID in Delaware, attention turns to who will become the Democratic nominee. While Vice President Kamala Harris is an early favorite, nothing is guaranteed. Jake Chervinsky, chief legal officer at the Variant Fund, believes the party has a significant opportunity to win back a substantial share of the crypto vote. He calls for the new candidate to:

  • Recognize crypto as an important technology and commit to ensuring it flourishes
  • Accept that the SEC’s approach to regulation has failed
  • Set out policies that balance innovation and consumer protection
  • Outline who would lead key agencies such as the SEC and CFTC
  • Collaborate with entrepreneurs and investors in the crypto industry

In the coming days, it will become clearer who will face Trump in the November election. However, it is unlikely that any Democrat will be as pro-crypto as the Republican ticket. Stay updated with the latest news on Global Crypto News.

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