USDTrump’s Inauguration, State Bitcoin Reserves, and Crypto Policy Updates
Trump Sworn in as 47th President Amid Historic Indoor Ceremony Due to Cold Weather
On January 20, 2025, Donald Trump was sworn in as the 47th president of the United States, marking a significant event in American political history. Due to dangerously low temperatures, the ceremony took place indoors in the Capitol's Rotunda, a rare occurrence in inauguration history. Trump, alongside Vice President-elect JD Vance, delivered a powerful inaugural address emphasizing themes of unity and prosperity for all citizens, stating, "January 20, 2025 is liberation Day."
The traditional parade down Pennsylvania Avenue was canceled because of the weather, but Trump's inaugural activities continued inside, with plans for him to engage with attendees. This inauguration represents Trump's historic return to the presidency, as he asserts a commitment to confront crises with “dignity and power,” aiming to ensure safety, peace, and prosperity for Americans of all backgrounds as he embarks on his second term in office. The address and the adapted plans reflect the challenging circumstances of the day.
Trump Forms Crypto Working Group, Excludes Fed & FDIC, Eyes Stablecoin Leadership
Donald Trump signed an executive order forming a Digital Assets Working Group led by David Sacks. This group aims to define crypto market structures, explore stablecoin potential, and evaluate a national digital asset stockpile. Trump excluded the Federal Reserve and FDIC, signaling a break from past crypto policies criticized as debanking efforts, including “Operation Chokepoint 2.0.” Sacks emphasized regulatory clarity by defining assets like securities and commodities. Stablecoins are highlighted as tools to bolster the dollar's international dominance.
Critics of the Biden administration’s crypto crackdown claim Trump seeks to position the U.S. as a global crypto leader. Additionally, Trump halted CBDC advancements while fostering stablecoin and digital asset adoption. Caitlin Long, CEO of Custodia Bank, praised the exclusion of the Fed, citing it as a win for stablecoin policy independence. The group's federal regulatory framework may redefine U.S. crypto leadership.
SEC Revokes SAB 121, Crypto Market Soars; Enforcement Actions Drop 30% Under Gensler
The U.S. SEC revoked Staff Accounting Bulletin (SAB) 121, replacing it with SAB 122, which simplifies compliance for financial institutions managing digital assets. The move, celebrated by the crypto industry, allows banks to follow standard accounting practices, fostering crypto custody services and lowering costs. Bitcoin surged 3.29% to $105,235, while Ethereum rose 5.93% to $3,400, with Solana and Dogecoin gaining 8.4% and 3.84%, respectively.
Separately, a January 23 report revealed SEC crypto enforcement actions fell 30% in 2024 under Gary Gensler, with penalties hitting a record $5 billion, primarily due to Terraform Labs' $4.5 billion settlement. Fraud remained the most frequent charge (73%), followed by unregistered securities (58%). Gensler’s tenure oversaw 80% more crypto actions than his predecessor. Post-election, only four actions occurred, and Mark Uyeda, Trump's pick as acting chair, canceled SAB 121, signaling a significant regulatory shift.
Trump Appoints Caroline Pham as Acting CFTC Chair Amid Ongoing Search for Permanent Leader
President Donald Trump appointed Caroline Pham, a Republican commissioner of the Commodity Futures Trading Commission (CFTC), as acting chair of the agency. This decision was confirmed by a vote from the CFTC's five members. Pham, who was nominated by former President Joe Biden, has been instrumental in leading various digital asset initiatives at the CFTC. Notably, she established a Digital Asset Markets subcommittee focused on governance, risk recommendations, and proposed a regulatory framework for digital assets.
In 2023, Pham advocated for a "U.S. regulatory sandbox" to foster innovation in technology and initiated a pilot program for digital assets. As of now, there is no permanent chair named, with the outgoing chair, Rostin Behnam, set to leave on February 7, 2025. Former CFTC Commissioner Brian Quintenz is considered a leading candidate for the permanent position.
Elizabeth Warren and Vitalik Buterin Criticize Trump Memecoins as Ethics and Bribery Concerns Rise
Senator Elizabeth Warren and Representative Jake Auchincloss criticized President Donald Trump and First Lady Melania Trump for launching the $TRUMP and $MELANIA memecoins, alleging unethical behavior and personal enrichment. They urged federal regulators, including the SEC and CFTC, to investigate potential ethics violations, expressing concerns over the coins' potential for unregulated foreign influence and financial risks to supporters.
Blockchain analytics firm Chainalysis reported that 94% of these tokens are controlled by just 40 crypto whales, each holding over $10 million in tokens. Ethereum founder Vitalik Buterin also criticized politician-issued cryptocurrencies, labeling them as "a perfect bribery vehicle" due to their potential to increase the issuer's wealth passively and the plausible deniability they offer to holders. He warned that such coins could facilitate political bribery, including from foreign nation-states.
Saylor and Marathon Meet Trump Team to Discuss Enhancing US Bitcoin Mining Potential
Michael Saylor, CEO of MicroStrategy, and executives from Marathon Digital recently met with representatives of President-elect Donald Trump’s administration, signifying a potential focus on advancing Bitcoin mining in the United States. The meeting, hosted by Vice President JD Vance, underscores Trump’s growing pro-crypto stance, notably his proposal for a national Bitcoin reserve aimed at enhancing the nation’s strategic position in the crypto landscape. Saylor and Marathon hold substantial Bitcoin reserves, with MicroStrategy owning approximately 450,000 BTC and Marathon holding around 44,893 BTC.
Trump's administration is exploring collaborations with leading mining firms, aiming to create jobs and enhance energy security. He advocates for the U.S. to assume a leading role in the remaining Bitcoin supply mining, emphasizing its potential to strengthen economic resilience against central bank digital currencies (CBDCs). As the administration prepares to take office, the implications of these discussions could reshape the U.S. position in global cryptocurrency dynamics.
Ross Ulbricht Pardoned; $47M Bitcoin Wallet Linked to Silk Road Resurfaces After a Decade
Ross Ulbricht, founder of the Silk Road marketplace, was pardoned by former U.S. President Donald Trump after over a decade of imprisonment. This action reignited discussions about Ulbricht's influence on Bitcoin and the narrative of its association with criminal activity. Advocates consider his sentencing excessive, viewing him as a symbol of freedom and decentralization.
Separately, on January 22, Coinbase's Conor Grogan identified 430 BTC (~$47M) in wallets linked to Ulbricht, untouched since Silk Road’s shutdown in 2013. These funds, excluded from earlier U.S. government seizures, highlight Bitcoin's value growth and raise questions about Ulbricht's access to the private keys. The discovery spurred debate within the crypto community about privacy and the implications of revisiting dormant holdings. While Ulbricht's release underscores potential regulatory shifts, his historical role as a pioneer remains a focal point for the industry.
Hester Peirce to Lead SEC’s New Crypto Task Force Amid Regulatory Shift
SEC Commissioner Hester Peirce, also known as “Crypto Mom,” was appointed to lead a new crypto task force aimed at establishing a more sensible regulatory framework for cryptocurrencies. This initiative comes in the wake of former SEC Chair Gary Gensler’s departure and reflects the incoming Republican majority's shift in approach. The SEC has faced criticism for relying on enforcement actions rather than providing proactive regulatory clarity, leading to calls for better registration protocols for crypto firms.
Acting Chair Mark Uyeda described the previous approach as a "disaster" and emphasized the need for guidance. The task force, including advisers Richard Gabbert and Taylor Asher, will focus on creating clear regulations, realistic registration pathways, and judicious enforcement practices. Among Peirce's proposals is a three-year “safe harbor period” for blockchain innovators. The task force aims to facilitate a more constructive dialogue between regulators and the crypto industry.
Texas Court Overturns Tornado Cash Sanctions, Favoring Privacy in Crypto Regulations
A Texas court has recently overturned the sanctions imposed on Tornado Cash, a cryptocurrency mixing protocol sanctioned by the U.S. Treasury's Office of Foreign Assets Control (OFAC) in August 2022, following accusations of facilitating money laundering for North Korea's Lazarus hacking group, which allegedly laundered over $455 million. This ruling, resulting from an appeal by six Tornado Cash users submitted on November 26, 2024, determined that OFAC exceeded its authority, stating that Tornado Cash's immutable smart contracts do not qualify as property under the International Emergency Economic Powers Act (IEEPA).
The sanctions led to the arrest of developer Alexey Pertsev, who was sentenced to five years and four months in prison for laundering $1.2 billion. Despite the court ruling in favor of Tornado Cash, Pertsev remains in custody. The decision could indicate a favorable shift in the regulatory landscape for privacy-focused technologies in the digital asset space.
Wyoming and Massachusetts Move to Establish Bitcoin Reserves Amid Growing Interest from U.S. States
Wyoming and Massachusetts have introduced legislation to establish strategic Bitcoin reserves, allowing significant investments in Bitcoin as part of state asset diversification. Wyoming's House Bill 201, led by Representative Jacob Wasserburger, proposes investing up to 3% of public funds, potentially allocating over $300 million to Bitcoin, while its Permanent Mineral Trust Fund holds nearly $11.5 billion. Conversely, Massachusetts' Senate Docket 422 enables investment of up to 10% of its Commonwealth Stabilization Fund, approximately $800 million, into Bitcoin and other digital assets.
Other states, including Texas, Oklahoma, and California, are also exploring similar initiatives to incorporate Bitcoin into their financial strategies. California is collaborating with the non-profit Proof of Workforce to evaluate Bitcoin's potential benefits. As of January 2025, at least 15 U.S. states are considering Bitcoin reserves to hedge against economic uncertainties. This reflects Bitcoin’s growing influence as a viable financial asset for enhancing fiscal stability amid global interest.
Utah Proposes Bill to Allow State Investment in Digital Assets with Stringent Criteria
Utah has introduced the "Blockchain and Digital Innovation Amendments" bill (H.B. 230), allowing the state treasurer to invest up to 10% of public funds in digital assets, including crypto. To qualify, digital assets must have a market cap exceeding $500 billion or meet strict stablecoin criteria, such as regulatory approval and backing by high-quality liquid assets. The bill emphasizes security, requiring cryptographic private keys to be stored in encrypted environments across geographically diverse data centers.
Additionally, it protects individuals’ rights to self-custody assets, prohibiting government restrictions on self-hosted or hardware wallets. This proposal follows a national trend, with various states exploring similar legislation. If passed, the Utah bill will take effect on May 7, 2025, marking Utah as the eleventh state to adopt such measures in response to growing interest in digital assets and cryptocurrency provisions, particularly since President Trump's Bitcoin stockpile endorsement.
Bank of America CEO Signals Potential Shift to Crypto Payments Pending Regulatory Approval
Bank of America CEO Brian Moynihan indicated a potential shift in the banking industry towards adopting cryptocurrencies for payments, contingent on favorable regulations under President Donald Trump. Speaking at the World Economic Forum, Moynihan remarked that if regulations enable practical usage, the banking sector will actively engage in crypto transactions.
Currently, American banks remain cautious, primarily allowing participation in bitcoin ETFs rather than facilitating crypto for retail transactions. Moynihan suggested that cryptocurrencies could evolve into another mainstream payment method, akin to Visa or Apple Pay, while refraining from commenting on their value as an investment. Circle CEO Jeremy Allaire noted that Trump is expected to issue executive orders post-inauguration aimed at simplifying crypto trading for banks, potentially increasing client access to digital assets.
Sen. Cynthia Lummis Named Digital Assets Subcommittee Chair
On January 23, 2025, Senator Cynthia Lummis was appointed chair of the U.S. Senate Banking Committee’s new Digital Assets Subcommittee, which will oversee cryptocurrency policy. Lummis, a strong Bitcoin advocate, had teased the announcement with a cryptic post stating, “Big things are coming,” sparking speculation about a U.S. Strategic Bitcoin Reserve (SBR). Bitcoin prices spiked from $102,000 to $106,000 before dropping when the announcement revealed no SBR plans.
Lummis has previously proposed a bill for a federal Bitcoin reserve to acquire up to 1 million BTC over five years, emphasizing the need for a comprehensive regulatory framework. Her subcommittee includes other crypto-friendly senators like Bill Hagerty and Bernie Moreno. Lummis also focuses on combating alleged regulatory hostility toward crypto banking, accusing agencies of restricting services in an initiative labeled "Operation Choke Point 2.0." These developments reflect the growing intersection of digital assets and U.S. financial policy.
EU Orders Non-Compliant Stablecoins Removed by March 2025 Under MiCA Regulations
The EU has mandated the removal of non-compliant stablecoins by March 2025 under the Markets in Crypto Assets (MiCA) framework, which aims to enhance oversight in the cryptocurrency sector. MiCA distinguishes stablecoins into two categories: electronic money tokens (EMTs), linked to single fiat currencies, and asset-referenced tokens (ARTs), based on a mixture of currencies and assets. The European Securities and Markets Authority (ESMA) has instructed national regulators to enforce compliance, ensuring that platforms eliminate tokens that fail to meet these standards.
This regulatory approach seeks to create a safer environment by mandating stablecoin issuers to maintain adequate liquid reserves and submit to the European Banking Authority's supervision. While the stablecoin provisions began in June 2024, the framework's broader implementation occurred in December 2024, prompting firms like USDC to achieve compliance ahead of the deadline, placing added pressure on others to adapt promptly to the new rules.
Kansas Proposes Bill to Allow 10% of Retirement Funds in Bitcoin ETFs
Kansas State Senator Craig Bowser has proposed Senate Bill 34, which aims to allow the Kansas Public Employees Retirement System (KPERS) to invest up to 10% of employee retirement funds in spot Bitcoin exchange-traded funds (ETFs). If enacted, the bill will establish a board of trustees responsible for managing these investments, ensuring that the funds are invested and reinvested wisely in Bitcoin-backed ETFs registered in Kansas.
The board is tasked with annual performance monitoring to maintain sustainability and growth, with the flexibility to exceed the 10% cap if it benefits the fund's beneficiaries. Currently, the bill is being reviewed by the House Committee on Financial Institutions and Insurance after its introduction on January 16, 2025. Should it pass through the legislative steps, it would be forwarded to the governor for final approval, potentially setting a precedent for other states in the U.S. regarding cryptocurrency investments in retirement funds.
North Dakota Lawmakers Propose Stricter Regulations on Crypto ATMs to Combat Scams
North Dakota lawmakers are reviewing House Bill 1447, which proposes stricter regulations on cryptocurrency ATMs to protect residents from increasing scams. The bill aims to limit daily withdrawals to $1,000, cap transaction fees at $5 or 3% (whichever is higher), and mandate fraud warnings on the machines. In 2023, North Dakotans filed 103 crypto scam complaints to the FBI, resulting in $6.5 million in losses, reflecting a broader trend where Americans lost $5.6 billion to crypto fraud that year.
The bill has garnered support from advocacy groups like AARP, particularly for its potential to protect seniors from scams. However, critics, including crypto ATM operators, argue that the proposed restrictions on fees and transactions could jeopardize the operational viability of ATMs in the state. Globally, the number of Bitcoin ATMs increased by over 7% from December 2024 to December 2023, with 37,155 ATMs operating across 65 countries.
Helium Network Fights SEC Lawsuit, Warns of Threats to Blockchain Innovation
The Helium Network, through its parent company Nova Labs, faces a lawsuit from the U.S. Securities and Exchange Commission (SEC), which contends that Nova Labs offered unregistered securities via its “Hotspots” and “Discovery Mapping” program. The SEC accuses the company of misleading investors regarding partnerships with major corporations like Lime, Nestlé, and Salesforce, asserting that these companies were not active users of the Helium network.
CEO Amir Haleem has denounced the lawsuit as baseless, arguing that it represents a broader attack on blockchain innovation. He emphasizes that Nova Labs has cooperated with the SEC and provided evidence of its legitimate partnerships. Haleem warns that labeling Hotspots as securities could set a dangerous precedent for Decentralized Physical Infrastructure Networks (DePIN) and threaten future innovations in this space. He is committed to vigorously defending the company in this legal battle.
This article has been refined and enhanced by ChatGPT.
