What it means for crypto

It is important to emphasize that Joe Biden will remain president for the remainder of his term. The question now is who will replace him in the November election against Trump.

Joe Biden’s sudden withdrawal from the US presidential race initially caused panic in the cryptocurrency markets.

Bitcoin lost close to $1,500 in about 30 minutes as investors digested the news amid uncertainty over who would be the Democratic Party nominee.

However, this decline was short-lived as investors realized that this could be a bullish development, at least when it comes to cryptocurrency policy.

Source: TradingView

Industry leaders are outraged amid claims that the Biden administration’s approach to digital assets is stifling innovation and harming consumers.

There was optimism in March 2022 when the president signed an executive order on cryptocurrencies, tasking government agencies with assessing their risks and benefits.

At the time, Coinbase said it was taking a “very neutral stance” on digital assets, which it said was “a sign that the White House takes the promise of this technology seriously.”

Six months later, Biden released a formal framework outlining how crypto should be regulated, but many in the industry felt it was thin on detail and substance.

Of particular concern was the lack of clarity about which agencies would be tasked with overseeing the market, which led to a bit of a tug-of-war between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

Coinbase has repeatedly said action was needed, and in June 2023, the exchange’s chief legal officer, Paul Grewal, warned that the U.S. was “lagging behind” compared to other countries.

“The US is pushing tech and innovators overseas due to the lack of clear rules and regulations for crypto. The rest of the world is not waiting for us and they are taking advantage of our absence.”

Paul Grewal

Grewal praised bipartisan efforts by Congress to lay out clear rules that crypto companies must follow, but to date no concrete legislation has emerged.

Biden most recently controversially vetoed a bill that would have repealed a controversial accounting policy implemented by the SEC, known as SAB 121.

Kirstin Smith, CEO of the Blockchain Association, said that this rule is “nothing more than a punitive, anti-digital asset tool” that makes it extremely difficult for financial institutions to store cryptocurrencies on behalf of their customers. At the time, the president said:

“My administration will not support measures that jeopardize the well-being of consumers and investors. Appropriate barriers that protect consumers and investors are necessary to capitalize on the potential benefits and opportunities of crypto asset innovation.”

Joe Biden

While the president has said his administration is “eager” to work with Congress to develop a “comprehensive and balanced regulatory framework,” no such framework has yet emerged.

The Biden administration has at times been unintentionally embroiled in one of the biggest scandals to overshadow the crypto industry: the sudden collapse of FTX.

Disgraced CEO Sam Bankman-Fried became the second-largest donor to Biden’s presidential campaign in 2020, donating $5.2 million.

SBF had donated tens of millions of dollars to Democratic candidates before its empire fell apart, and it was revealed that client funds had been misappropriated.

White House Press Secretary Karine-Jean Pierre later faced troubling questions about when that money would be returned to help compensate victims.

Alright what now?

It’s important to emphasize that Biden will remain president for the remainder of his term, but he’s currently still in the process of recovering from COVID in Delaware.

Now, the focus is on who will be the Democratic nominee. While incumbent Vice President Kamala Harris appears to be the early favorite, there are no guarantees.

Jake Chervinsky, chief legal officer at Variant Fund, says the party now has a “big opportunity to win back a big chunk of the crypto vote.”

Regarding X, he asked the new candidate to:

Recognize crypto as an important technology and commit to ensuring its growth Recognize that the SEC’s approach to regulation is failing Set policies that balance innovation and consumer protection Outline who will lead key institutions like the SEC and CFTC Collaborate with entrepreneurs and investors in the crypto industry

In the coming days, it will become clearer who will be Trump’s opponent in November, but no matter which Democrat it is, it is unlikely they will be as pro-crypto as Republicans.