The crypto industry poured millions of dollars into the presidential and congressional races, but its most salient election victory is likely to be the departure of US Securities and Exchange Commission Chair Gary Gensler.

The former Goldman Sachs banker has led the strongest regulatory crackdown on the digital-asset industry, slapping dozens of cases against crypto companies and traders large and small, including financial behemoths Coinbase Global Inc. and proprietary trading firm DRW Holdings LLC.

President Donald Trump’s decisive victory ensures a pullback on crypto-related enforcement once he takes office. In July, Trump pledged to fire Gensler on the first day of his second administration while headlining a Bitcoin conference in Nashville.

The SEC has often touted its success in court in obtaining judgments that align with its view that decades-old securities laws apply to the upstart digital asset class. It’s also notched some significant fines against some of the biggest names in the industry. In April, the agency won a massive $4.5 billion fine and disgorgement from Terraform Labs, a stablecoin issuer, and founder Do Kwan. The agency hasn’t yet released its annual enforcement report for fiscal 2024 actions. Still, in the prior year, the agency brought 46 such cases, a more than 50% increase from the year prior, according to a report by consulting firm Cornerstone Research.

“Some crypto cases have been legit fraud cases and I hope those continue and I hope we get more of them,” said J.W. Verret, professor at George Mason University’s Antonin Scalia Law School in Arlington, Virginia. “A lot of crypto cases have been registration only, foot fault cases when registration is impossible.”

The next SEC chair is expected to push forward new regulations that will modify existing securities laws or enable digital asset companies to become compliant with rules that Gensler has long admonished them for flouting. That will also serve to rein in enforcement.

Bipartisan crypto legislation that supports that goal is now a stronger prospect, with the Senate set to be in Republican control.

“We expect that both the Trump administration’s and new Congress’ approach to crypto regulation to be much more constructive,” said Jack Inglis, chief executive officer of the Alternative Investment Management Association, a London-based trade group representing hedge funds and private equity firms.

That means policies “recognizing the need to embed crypto in the broader financial services framework while taking account of the technological differences with traditional finance leading to a more bespoke approach in many areas,” he said.

The SEC’s enforcement cases against crypto companies have centered on whether their products fit within the decades-old definition of a security, as laid out in the US Supreme Court’s opinion SEC v. W.J. Howey Co. That hasn’t been a good approach, according to William McLucas, a former SEC enforcement director, now a partner at WilmerHale. McLucas spoke during a securities enforcement conference in Washington on Wednesday.

“That can’t be the solution because whether you like crypto or you don’t like crypto it’s not going away,” McLucas said. “The enforcement cases that have been brought are what they are, but they keep bringing them, and we keep seeing crypto products,” he said.

Digital assets were a focus of 18% of all the tips, complaints and enforcement referrals at the agency in fiscal year 2024, the regulator’s Inspector General said in a recent report. The agency’s Office of Investor Education and Advocacy received nearly 6,000 such complaints during that same period, more than double any other type of complaint, the IG said.

Gensler Departure

Despite Trump’s vow to boot Gensler from office immediately, it may boil down to whether the SEC chair resigns by inauguration day. Some of Gensler’s fiercest critics in financial services are already calling for his immediate resignation.

“Last night the people voted for this country to take a new direction, and Chairman Gensler should respect that vote by stepping down from his position immediately,” said Chris Iacovella, president and chief executive officer of the American Securities Association, which represents regional brokers and other financial services firms.

If Gensler follows Washington tradition and departs, it would leave the agency split 2-2 along party lines until a new chair can be confirmed. That would stymie further aggressive enforcement, particularly with Hester Peirce, dubbed “Crypto Mom” still a commissioner.

One crypto industry executive, who requested to speak on background to speak frankly, said they anticipate Gensler may still want to file cases against companies like Uniswap and OpenSea that have already received “Wells notices” — an enforcement process formally notifying a company they’re under SEC investigation.

But other enforcement cases could be slow-rolled. Agency staff, aware that an incoming SEC chair, particularly one who back’s Trump’s vow to shrink the size of the federal government, might look unkindly on employees taking aggressive actions in the months leading up to a change in leadership and policy, the industry executive said.

The SEC declined to comment.

Bitcoin Price Today: Increasing chances of a victory for former US president Donald Trump in the US Presidential Elections 2024 gave a leg up to the bitcoin prices on Wednesday, November 6, with the major cryptocurrency hitting a fresh high and crossing the $75,000 mark for the first time.

Bitcoin price jumped over 8% today to a record $75,371.69, surpassing its previous high of $73,797.98 scaled in March this year.

The rally comes as Trump is seen as more supportive of cryptocurrencies than Democratic Presidential candidate Kamala Harris.

According to a report by AFP, Trump has pledged to make the United States the “bitcoin and cryptocurrency capital of the world” and to put tech billionaire Elon Musk in charge of a wide-ranging audit of governmental waste.

Other cryptocurrencies such as Ethereum, Solana, Dogecoin, Cardano and Shiba Inu also saw strong buying action, rallying up to 12%.

US Elections 2024

While the results are not yet completely known and will take a few days for the officials to count all votes, investors are already anticipating a Republican win. The Republicans have taken control of the Senate for the first time in four years although results of the House elections are not yet in.

Catch all the LIVE updates on US Presidential Elections 2024 here

270 electoral votes are needed to win the presidency, and Donald Trump is leading with electoral 247 votes as against Harris’ 210. 

Trump won Georgia, a state that had voted for Democrats in 2020 but is traditionally a Republican stronghold. His win in North Carolina also made it harder for Vice President Kamala Harris to secure enough votes.

Meanwhile, Donald Trump already declared victory in the 2024 election during a speech in West Palm Beach, promising to lead the United States into a “golden age.”

“This was a movement like nobody’s ever seen before, and frankly, this was, I believe, the greatest political movement of all time. There’s never been anything like this in this country, and maybe beyond,” Trump said.

Ripple Effect

Signs of a possible Trump victory not only bolstered Bitcoin but also powered a rally in US stocks, the US dollar index along with the Indian stock market. 

The US Dollar Index rose 1.9% to 105.30, its highest level in almost four months. Meanwhile, futures for the S&P 500 gained 1.7% and Dow Jones Industrial Average rose 1.8%. Nasdaq composite future was 1.8% higher, signalling a strong start for the US markets later today. 

Back home, Indian benchmark indices – Sensex and Nifty – rallied over 1% each, led by gains in IT and banking packs.

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