Cryptoverse Might Face ‘More Aggressive’ SEC Under Biden

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American President-elect Joe Biden could be set to unleash the regulatory hounds once he takes power in January – with an expert warning, “There will be a new [regulatory] sheriff in town, and they won’t be friendly to business.”

“When potential candidates start emerging, we are eager to hear whether they would plan to continue his conservative approach on issues such as the approval of a Bitcoin ETF as well as the coordination of a coherent regulatory approach to DeFi, a relatively new vertical that we expect regulators under a Democratic administration to carefully scrutinize,” financial services platform BitOoda said in a note to their clients today, commenting on possible changes in the US Securities and Exchange Commission (SEC).

And while there are no official names announced, speculations are already starting to appear.

Biden’s election could potentially spell a change of the guard for the American financial regulator, the SEC, labeled a “divided agency” whose “chairman [Jay Clayton] and accommodating approach to big business will likely soon be sent packing” by the author of an analysis piece for Law360.

Law 360 quotes Nick Morgan, a partner at Paul Hastings and a former SEC senior trial counsel, as stating that Clayton is likely to be shown the exit door once Biden takes power, perhaps instead looking to appoint Preet Bharara, the former Attorney for the Southern District of New York, labeled the “most dangerous man in bitcoin” (BTC) back in 2014.

In a 2014 interview with Fast Company, Bharara stated,

BitOoda also mentioned that early indications are that Fed Reserve Governor Lael Brainard is the frontrunner for Treasury Secretary.

“We would consider her nomination as bullish for the space, given her strong role in the Fed’s CBDC efforts to date and her understanding of digital assets,” they added.

Also, former Commodity Futures Trading Commission (CFTC) Chair Gary Gensler, who is “pro-crypto and blockchain-savvy,” “is in line for an advisory position overseeing the financial sector.”

Projecting the trajectory

“Biden’s choices for key posts will have a significant impact on the trajectory of the US digital asset regulatory landscape. We have seen the acceleration of regulatory initiatives in the past few months across US agencies and would not expect a reversal of the progress made in areas such as enforcement against unregulated platforms operating in US markets,” according to BitOoda.

Last month, the SEC announced a settlement with Canadian social media startup Kik Interactive and charged John McAfee with violating antifraud provisions of the federal securities laws, among other violations. Also, in May 2020, Telegram and its owner Pavel Durov officially sounded the death knell for the company’s Telegram Open Network (TON) blockchain platform and its Gram token after they lost a battle with the SEC.

However, in June this year, Galaxy Digital founder Mike Novogratz opined that a potential leadership shuffle at the SEC would make a bitcoin-backed exchange-traded fund “more likely” to be approved.

Also in October 2020, another major regulatory agency, the CFTC, charged three owners of major crypto derivatives exchange BitMEX and five related companies with operating an unregistered trading platform and violating multiple regulations.

In a separate article, Law360’s Jon Hill opined,

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