2024 U.S. Election: Web3 Regulatory Impact for Finance Professionals

What is your overall perspective on the U.S. election results?

Andrea Perlak: This election has been significant for the crypto industry. With a pro-crypto administration taking office, it could mean relief from the regulatory pressures that crypto companies have faced over the past few years. The immediate reactions have been overwhelmingly positive, with the industry hopeful that we’ll see a friendlier environment for Web3.

How pro-crypto is Trump, really?

Andrea Perlak: That’s a great question. Trump initially seemed distant from crypto, but his campaign showed increasing support, likely due to recognizing the influence of the pro-crypto voting demographic. Trump’s inner circle includes several crypto advocates, which is promising. The presence of crypto supporters, like Alex Brusewitz, as part of his transition team is a positive indicator that the administration will support the industry.

What if Kamala Harris had won? How would that have affected crypto?

Andrea Perlak: If Kamala Harris had won, it’s likely we’d be facing another year or two of restrictive policies. Her campaign didn’t focus much on crypto, and it’s expected that she would have continued Biden’s approach, keeping figures like Gary Gensler at the SEC. That would likely mean ongoing regulatory challenges for crypto companies. So, this election outcome was critical for the industry’s future.

What short-term changes could we expect following this election?

Andrea Perlak: The first change we’re expecting is a shift in SEC leadership, likely with someone who brings a more balanced approach to enforcement. The new administration may pause the “enforcement through action” method that has been costly for crypto companies. We’re also hoping to see a more defined set of compliance guidelines in the short term.

Bitcoin’s price has surged about 20% since the election, which reflects the market’s positive outlook. In the next few months, we could see an easing of enforcement and, potentially, new compliance standards that are clearer and more consistent.

Is there a chance the U.S. Treasury could begin holding Bitcoin?

Andrea Perlak: That’s an interesting topic and one that’s been discussed widely. Currently, the U.S. Treasury holds around 206,000 BTC. Trump has indicated that his administration might hold rather than sell this BTC. While this isn’t guaranteed, such a move would signify a substantial endorsement of crypto as an asset.

What compliance challenges might arise with these shifts?

Andrea Perlak: The industry still faces challenges. While we’re optimistic about changes, it’s likely that some compliance hurdles will remain. For example, transitioning from an enforcement-focused approach to more structured guidelines will take time. Finance professionals should expect a period of adjustment as new regulations are drafted and refined.

How could a pro-crypto Congress support Web3?

Andrea Perlak: A pro-crypto Congress could accelerate regulatory clarity, particularly around the classification of securities versus commodities. This clarity would be a game-changer, as it would define the boundaries for crypto companies. A supportive Congress might also prioritize stablecoin regulations, crucial for bridging traditional finance and crypto. This type of legislative support could significantly impact the growth potential for Web3 in the U.S.

Are there other long-term regulatory expectations?

Andrea Perlak: Yes. While immediate changes are promising, permanent regulations will likely take one to four years to fully implement. In the long run, we expect to see clearer definitions around digital assets, protections for consumers, and standards that support innovation in Web3. Key laws on stablecoins and asset classification will be crucial steps toward sustainable growth.

Could the U.S. become a global leader in crypto under the Trump administration?

Andrea Perlak: Absolutely, there’s potential. If this administration maintains a supportive stance, it could attract more companies and innovators back to the U.S., which would set the country up as a global leader in Web3. The crypto community is hopeful that the U.S. might finally take on this role.

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