President Donald Trump’s return to the White House has had a bullish start for crypto as the Texas Court lifted OFAC sanctions imposed on Tornado Cash. It coincides with the pardon of Silk Road developer Ross Ulbricht while the US Securities and Exchange Commission (SEC) established a crypto task force.
The crypto world raised concerns over a quiet first day of Trump’s return to the Oval Office. Many anticipated the inclusion of a nod to the digital assets industry as he championed during the Republican campaign. Nonetheless, the day passed without Bitcoin or blockchain mentioned, leaving the contingent disappointed.
Crypto Shift in the US?
As he declared during his campaign trail, the 47th President took the stage with decisive action on Day 2 of Trump’s presidency, suggesting that regulatory clarity is imminent. The Ross Ulbricht pardon proves his pro-crypto agenda is hardly a campaign rhetoric.
A notable development is the appointment of pro-crypto Commissioner Mark Uyeda to head the SEC in an acting capacity following the exit of Gary Gensler on Monday. This regulatory appointment is critical, awaiting former Commissioner Paul Atkins take over the securities watchdog.
The move by the Texas court to lift the controversial sanctions by the Office of Foreign Assets Control (OFAC) signals Trump 2.0 will bring a tectonic shift within the US crypto landscape.
Fulfilling Campaign Promises?
President Trump had the heat of Grand Old Party (GOP) primaries and campaigned on the promises of easing crypto regulations. He vowed to reverse the regulation-by-enforcement approach characterizing Gensler’s tenure at the SEC through a friendlier environment for innovation.
The appointment of Commissioner Uyeda is a gesture of reversing the wrongs orchestrated by Gensler under the Biden administration. The new chair swiftly established a crypto task force within SEC that the pro-crypto Commissioner Hester Peirce will steer.
The task force is tasked with reversing the heavy policies enforced by Gensler and expediting the development of a comprehensive regulatory framework. The unit is to spearhead a collaborative front with the crypto industry leaders and lawmakers.
Trump Pardons Ross Ulbricht
President Trump pulled a dramatic move on the second day by pardoning Ulbricht, who spent over a decade in federal prison. The Silk Road founder was handed two consecutive life sentences for developing the online marketplace that used Bitcoin (BTC) as a means of payment.
The Ulbricht advocates were longing for the pardon, arguing that the punishment was overly excessive given the allegations were non-violent crimes. The pardon attracted applause across the crypto community, with many profiling it as a symbolic gesture of Trump’s commitment to grant digital assets freedom.
Court Overturns OFAC Sanctions on Tornado Cash
The Wednesday decision by the federal appeals court to reverse sanctions on Tornado Cash. The court held that OFAC had excessive authority to sanction the privacy tool. The ruling added momentum to a bullish start for crypto and decentralized technologies.
The court observed that Tornado Cash derived power from immutable smart contracts. Consequently, OFAC erroneously classified such property, thereby subjecting it to sanctions.
The court observed the decentralized nature of the privacy tool and noted that smart contracts are easy to access. One needs an internet connection to operate the tool autonomously without reliance on the central authority.
The decision extinguishes the 2022 ruling by OFAC alleging Tornado Cash aided billions in money laundering. The sanctions attracted widespread criticism from the crypto community, who perceived outrage in the crypto community, as they were seen as an attack on privacy and innovation.
Why This Matter?
The early actions under the Trump administration signal a near era for a policy shift to undo damages orchestrated by years of uncertain regulatory approach under the Biden administration.
The move has won praise from industry leaders, including Ripple Labs legal executive Stuart Alderoty. The pro-crypto attorney considers the crypto task force established by the acting SEC chair to be the step towards fairness and innovation.
Although Trump’s return to the White House is just beginning, the paced crypto-related initiatives reignite optimism within the industry. The executives are optimistic about regulatory clarity and technological freedom that will characterize the new era for the US crypto.
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