2025 looks increasingly likely to inaugurate a global golden era for digital assets, with the U.S. leading the way. This is less of a prediction and more of a fait accompli if you read mainstream news sources, let alone if you tune into the cryptocurrency trade press.
Much of the optimism is fueled by President Donald Trump’s cabinet nominees and potential advisors, not to mention Trump himself. Eric, his oldest son, promised attendees of a conference in Dubai last month that his father will be “the most pro-crypto president in history”—a pledge the market seemed to believe as Bitcoin soared past $100,000 after Trump’s electoral victory.
The president’s embrace of crypto extends to the launch of $TRUMP and $MELANIA meme coins days before his inauguration, which at the time of writing have a combined market cap north of $8 billion.
While the likelihood of a shift in U.S. policy toward crypto has raised concerns among anti-financial crime professionals, there is reason for hope. Some of crypto’s largest boosters believe the new age can only arrive with comprehensive digital asset legislation and regulation in place.
Despite crypto’s increasing role in the economy—it’s estimated that 70 publicly traded companies now invest in Bitcoin—and growing use by transnational criminals, scam artists, money launderers and terrorists – the U.S. still lacks a consistent framework for regulating it.
Some players in the powerful cryptocurrency lobby say they can live with either the EU’s MiCA (markets in crypto assets) regulation that came into force in June 2023, or FIT21 (Financial Innovation in Technology for the 21st Century), which passed the U.S. House of Representatives last May, as starting points for a unified regulatory framework.
But along with hope comes cause for alarm.
“The [crypto] industry has paid a lot of people a lot of money and is going to expect to see the receipts,” Hilary Allen, professor at the American University Washington College of Law, recently told the Financial Times.
Many in the crypto world are pushing for little to no oversight as they blame regulators and mainstream financial institutions for thwarting the ascent of digital assets over the past decade or more.
Marc Andreessen, co-founder of the powerful venture capital firm Andreessen Horowitz, told podcaster Joe Rogan that banking regulation made it difficult for 30 of the approximately 100 crypto ventures backed by his firm from landing bank accounts, and identified Trump’s pro-crypto stance as his top reason for supporting his campaign.
Andreessen is not the only one with deep pockets who recalls slights, whether real or imagined, from regulators and banks, and now seeks to influence crypto policy during Trump’s second term.
“Stand with Crypto,” a political action committee, acknowledges that “crypto’s future in America remains uncertain,” but at the same time boasts that it has raised more than $206 million in crypto donations, signed up more than 2 million advocates and made more than 580,000 policy contacts.
The fruits of that labor, according to Stand with Crypto, are the victories of 294 pro-crypto congressional candidates in the 2024 elections, and the defeat of 134 others it considers anti-crypto.
But eliminating or unduly constraining the ability of regulators and traditional financial services to protect the U.S. against illicit finance will spoil an otherwise perfectly good chance to adopt effective reasonable guardrails.
When industry enthusiasts knock regulators for calling for caution in banks’ dealings with cryptocurrency platforms, they ignore that their reticence is motivated by scandal and disaster.
A little more than a year ago, the world’s largest cryptocurrency exchange, Binance, reached a $4.3 billion settlement with the Justice Department and several U.S. regulatory agencies for violating the Bank Secrecy Act, enabling sanctions evasion and operating as an unregistered money services business in the U.S.
FTX, once the second largest exchange in the world, filed for bankruptcy in November 2022, a year before Sam Bankman-Fried, its co-founder and chief executive, was convicted of fraud.
After FTX’s downfall, crypto-friendly lenders Silvergate Bank, Signature Bank and Silicon Valley Bank collapsed amid a run on their deposits in March 2023, all within days of each other.
Critics who argue for little or no oversight of digital assets also tend to glide past their increasing use in illicit finance.
Tether, a stablecoin that trades one-to-one to the dollar, has—through no fault of its own, according to its managers and backers—”cemented its place as the go-to cryptocurrency for international criminals” as well as for Hamas, Hezbollah and Iran’s Islamic Revolutionary Guard Corp., the Financial Times reported in December, citing law enforcement sources.
Cryptocurrency is also increasingly facilitating the purchase and laundering the proceeds of child sexual abuse material, Chainalysis, a blockchain analytics company, has found.
The 119th Congress has the opportunity to craft laws that will secure America’s status as a global crypto hub and make the use of digital assets less welcoming to criminals.
The Trump administration may be anti-regulation, but strong anti-financial crime and consumer-protection will help ensure that digital assets flourish in the 21st century.
Kieran Beer, CAMS, director of editorial content, ACAMS, kbeer@acams.org
Topics : | Anti-money laundering , Cryptocurrencies |
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Source: | U.S.: White House/U.S. President |
Document Date: | January 24, 2025 |