Hi. Ed here.

Paul Atkins' confirmation hearing was a yawner. 

That’s good news for crypto.

Atkins, tapped by President Donald Trump to head the US Securities and Exchange Commission, fielded very few crypto-related questions by the Senate Banking Committee on Thursday, Aleks Gilbert reports. 

Instead, Democratic senators opted to focus most of their grilling of Atkins, an SEC commissioner during the 2000s, on his actions leading up to the global financial crash of 2008.

This was a surprise. 

In the run-up to the hearing, Senator Elizabeth Warren, the ranking Democrat on the committee and a forceful crypto critic, had laid out a raft of questions for Atkins. 

Right at the top of the list was what Atkins planned to do to address the Trump family’s growing crypto empire, Eric Johansson reported.

“Your financial ties to the industries you will soon regulate raise serious concerns about your ability to avoid conflicts of interest as a regulator,” Warren wrote in a letter to Atkins.

Indeed, earlier in the week the Trump family’s World Liberty Financial said it planned to introduce a dollar-backed stablecoin, reported Tim Craig.

At the same time, Trump Media & Technology Group, the outfit behind Truth Social, announced it was preparing to launch exchange-traded funds in a deal with Crypto.com, Osato Avan-Namayo reported.

Two days later, the SEC dropped its investigation of Crypto.com, an exchange based in Singapore, the company said in a statement. 

The perception that the SEC is clearing out cases in tandem with the Trump family’s expansion of its crypto empire is unavoidable. 

Even as crypto ventures applaud the end of Gary Gensler’s crackdown, the industry’s brand is at risk of becoming further tarnished.

Trump and his sons are rapidly making crypto as much of a family business as real estate.

That they are doing so at the very moment regulators and lawmakers are developing the framework for the industry is unprecedented. 

Moreover, Trump has pardoned a number of crypto figures to curry favour in the industry. He started with Ross Ulbricht, the founder of the crypto-powered Silk Road narcotics emporium. 

Now Trump just pardoned Arthur Hayes and two co-founders at BitMEX. Hayes was prosecuted by the Justice Department during Trump's first term, and in 2022 he pleaded guilty to violating US banking law.

From a regulatory perspective, it’s clear that crypto is getting whatever it wants from this administration. 

Yet the bad news is that Trump’s conflicts of interest may backfire by turning off institutional and retail investors who were just coming around to crypto.

For all the clarity on offer, the industry’s push to become a mainstream proposition isn’t getting easier.

ICYMI

• Crypto critic says Paul Atkins will lay off digital assets and bring accountability to SEC

  If confirmed by the US Senate to lead the SEC, Atkins won’t just change the rules ― he’ll rewrite much of the agency’s crypto regulatory playbook. That’s according to John Reed Stark, the former head of the agency’s internet enforcement unit and an outspoken crypto critic.

• Trump’s OCC pick is a known crypto backer: Who is Jonathan Gould?

  A known crypto backer may be leading a US banking regulator. Jonathan Gould’s future as the potential next Comptroller of the Currency. Crypto industry reps have welcomed the nomination as a sign that the OCC will engage with Congress about more industry-friendly regulation.

• FDIC drops crypto pre-approval rule for banks as it ‘turns the page’ on Biden-era policy

  The US Federal Deposit Insurance Corporation has reversed its previous stance requiring banks to seek prior approval before engaging in crypto-related activities. In a statement, acting FDIC Chairman Travis Hill said the agency is “turning the page on the flawed approach of the past three years.”

Story of the Week

Binance was used by terrorists and kidnappers in Nigeria, minister says

In an escalation of Nigeria’s long running legal clash with Binance, a government minister said Thursday that terrorists and kidnappers funnelled funds through crypto transactions on the platform.

“We stumbled on evidence linking the operations of Binance and these criminal elements ― terrorists and their like,” Alhaji Mohammed Idris, the government’s Minister of Information, told DL News in an exclusive interview. “We were having our own fear of insecurity exacerbated by operations of Binance.”

The development appears to ratchet up the legal pressure on the world’s biggest crypto exchange as it faces three cases.

Comment of the Week

Ben ‘BitBoy’ Armstrong alleged on social media that Canadian TV personality Kevin O’Leary was responsible for a fatal boating accident. The influencer practically dared O’Leary to sue him in a bellicose tweet. So O’Leary obliged in a defamation suit.

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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