Second Trump Term May Yield ‘Friendlier’ SEC, Says Global Law Firm

Global law firm Ropes & Gray has released a forecast suggesting that a second term for Donald Trump could lead to a more agreeable and supportive Securities and Exchange Commission (SEC). The firm posits that such a shift may foster a regulatory climate that encourages growth in financial markets and innovation, particularly in the cryptocurrency space and among tech startups.

“It seems likely that issuers of digital assets—and asset managers interested in investing in digital assets on behalf of their clients—will face a friendlier SEC than under Chair Gensler,” the forecast read.

Trump has addressed multiple cryptocurrency audiences, asserting his commitment to making the U.S. the “world capital of crypto.” Moreover, current Republican Commissioners Hester Peirce and Mark Uyeda have challenged the SEC’s regulatory tactics concerning digital assets. The SEC may even consider developing a new regulatory framework for digital assets, possibly in conjunction with the Commodity Futures Trading Commission. This initiative is part of the Financial Innovation and Technology for the 21st Century Act, known also as FIT21, a comprehensive 200-page bill that received bipartisan support and passed through the House in May 2024.

FIT21 was designed to establish the regulatory clarity and robust consumer safeguards crucial for the digital asset ecosystem to prosper in the United States. One of its main objectives is to position the U.S. at the forefront of the future financial system and as a center for technological innovation.

Asset Management Firm CEO Predicts SEC Shift Post-Gensler Departure

Meanwhile, Alexander Blume, CEO of Two Prime, an SEC-regulated investment advisor firm specializing in digital asset derivatives, told Alexa Blockchain that he anticipates many SEC lawsuits will be dismissed early in Trump’s term following Gary Gensler’s departure. Peirce, known for her vocal support of the industry and criticism of current SEC crypto regulations and therefore dubbed “Crypto Mom,” is rumored to be a potential replacement.

Blume pointed out that Gensler’s unfair focus on the crypto sector has greatly suppressed financial innovation, which has negatively impacted well-meaning businesses and investors alike. He stated that Gensler’s removal from the SEC signifies the close of a tough chapter for U.S. citizens in crypto. “America has a history of financial innovation leadership that has been choked out by the SEC. That time has come to an end,” he said.

This corresponds with Ropes & Gray’s analysis regarding expectations for asset managers under new SEC leadership. After the confirmation of a new Chair and Division Director, asset managers can anticipate a more lenient approach regarding penalties and the application of innovative legal theories by the Division of Enforcement. Additionally, these new leaders may introduce procedural changes that could have a significant long-term effect.

However, the firm acknowledged that there are several cases in the SEC’s enforcement pipeline that are expected to remain largely unaffected by Trump’s return to office. These may pertain to insider trading, financial fraud, offering fraud, and other clear violations of SEC guidelines.

Malaya has positions in SHIB, ETH, USDT, MATIC, etc. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.

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