According to former SEC official John Reed Stark, the United States securities regulator may entirely change its stance on crypto regulation based on a crucial election in the country in 2024.
The former SEC’s Office of Internet Enforcement head predicted in a tweet on August 13 that a Republican president may significantly change the regulatory climate for cryptocurrencies, including by appointing crypto-friendly Commissioner Hester Peirce to succeed Gary Gensler as the agency’s chairman.
Currently, several Republican candidates are vying for the nomination. Republican voters continue to favour former President Donald Trump the most, with Florida Governor Ron de Santis and South Carolina Senator, Tim Scott trailing far behind.
According to Stark, Gensler would probably be replaced by Peirce, also known as “Crypto Mom,” if a Republican were to win the presidency.
Stark referred to Peirce’s history of disapproval and opposition to several of the regulator’s crypto-related enforcement measures and stated that if Peirce were to lead the SEC:
“The majority of U.S. SEC crypto-related regulation and SEC disturbance should be expected to come to an abrupt halt.”
Additionally, Stark called attention to how the SEC and American politics are becoming more divided over how to regulate cryptocurrencies.
When Stark initially started writing about cryptocurrency in 2017, he claimed that a wide range of politicians shared the same opinion, with Maxine Waters, the secretary of state, then-President Donald Trump and Secretary of State Hilary Clinton all concurring that it was a “dangerous and terrible plague.”
The topic of cryptocurrency has become much more controversial. In his campaign for president, Republican Ron de Santis stated that if won, he would “protect” Bitcoin and outlaw central bank digital currencies (CBDCs).
Elizabeth Warren, a Democrat, has made a number of aggressive efforts to outlaw all varieties of cryptocurrency in the nation. She even went so far as to organise an “anti-crypto army” during the course of her campaign for the Senate.
Stark asserted that the SEC won’t change its stance towards cryptocurrencies until a Republican occupies the White House. He predicted that the SEC will turn down the present batch of spot Bitcoin ETFs for a variety of “compelling” arguments.
Stark noted that spot Bitcoin markets have a history of artificially inflated trade volumes, are heavily concentrated in the hands of a few players and depend on a limited set of selected businesses to run the Bitcoin network.
He cited Better Markets in a SEC Comment letter dated August 8 in support of this claim. According to reports, this makes investors “extremely vulnerable” to manipulation by dishonest individuals.
Stark thinks the SEC will ultimately reject all of the outstanding submissions, despite the fact that some financial sector heavyweights from the realm of traditional finance, like BlackRock and Fidelity, have filed applications for a spot Bitcoin ETF product.
