The intersection of cryptocurrency and US politics is increasingly evident, as major industry players like Ripple and policy shifts under the incoming Trump administration signal a pivotal moment for digital asset regulation. Ripple’s significant contributions to pro-crypto political action committees and discussions about granting the Commodity Futures Trading Commission (CFTC) greater authority over digital assets shines the spotlight on the growing influence of blockchain advocates in shaping the nation’s regulatory landscape.
Trump Administration May Reshape Crypto Regulation, Empowering CFTC
President-elect Donald Trump and his incoming administration are reportedly considering granting the Commodity Futures Trading Commission (CFTC) enhanced authority over digital assets. The proposed shift, as reported by Fox Business, aims to redefine the regulatory responsibilities of federal agencies overseeing the burgeoning crypto industry.
This development, if realized, would mark a pivotal change, particularly in the oversight of digital assets like Bitcoin and Ethereum. These assets, widely considered commodities, are expected to fall squarely within the CFTC’s purview under the proposed framework, reducing the role of the Securities and Exchange Commission (SEC) in regulating the crypto space.
According to sources cited by Fox Business, the revamped role of the CFTC could include jurisdiction over cryptocurrency exchanges and spot markets handling assets classified as commodities. This realignment would align with the CFTC’s existing authority in derivatives markets, extending it into broader aspects of the crypto sector.
For years, regulatory uncertainty has hampered the growth of cryptocurrency businesses in the US, with overlapping mandates from the SEC and CFTC creating confusion. The Trump administration’s potential plan could streamline oversight, granting the CFTC a more prominent role while simultaneously curbing the SEC’s involvement in areas outside its traditional focus on securities.
Outgoing SEC Chair Gary Gensler, who has faced criticism for his stringent stance on the crypto industry, previously supported this shift. Gensler acknowledged that Bitcoin, as a commodity, should fall under the CFTC’s jurisdiction, an opinion he has expressed in public statements. Earlier this year, the CFTC also classified Ethereum as a commodity in its complaint against crypto exchange KuCoin, further cementing its claim to authority over key digital assets.
A Crypto-Friendly Administration?
President-elect Trump’s commitment to reshaping the regulatory framework is part of his broader campaign promises to bolster the US crypto industry. Trump has outlined a series of measures designed to make the US a global leader in cryptocurrency innovation. These include:
Creating a Federal Bitcoin Reserve: Trump has suggested establishing a federal bitcoin reserve, akin to a strategic commodity reserve, to underscore the government’s support for the leading cryptocurrency.
Appointing a Crypto-Specific Role: The administration plans to introduce the first-ever crypto-specific role in the White House to advise on blockchain policy and digital asset regulation.
Firing Gary Gensler: Trump’s pledge to remove Gensler as SEC Chair has been widely anticipated, given the Chair’s contentious approach to regulating cryptocurrencies. Gensler confirmed last week that he intends to resign on January 20, 2025, coinciding with Trump’s inauguration as the 47th president of the United States.
These promises, if fulfilled, could mark a stark departure from the previous administration’s regulatory approach, which was often characterized by legal battles with crypto companies and a focus on enforcement rather than clarity.
The SEC-CFTC Power Struggle
Under Gensler’s leadership, the SEC has aggressively pursued enforcement actions against crypto firms, arguing that many digital assets should be classified as securities. This has led to disputes with companies like Ripple Labs, Coinbase, and Binance, creating a chilling effect on the industry.
The proposed empowerment of the CFTC would dilute the SEC’s ability to regulate cryptocurrencies that are not securities, particularly those widely accepted as commodities. This shift would also align with global regulatory trends, where distinct agencies manage securities and commodities independently.
Critics of the SEC’s approach have argued that the lack of clear guidelines has stifled innovation and driven businesses offshore. By granting the CFTC greater authority, the Trump administration could create a more predictable environment for crypto businesses to operate, potentially attracting investment and talent back to US markets.
News of the potential regulatory overhaul has sparked widespread speculation within the crypto community and financial markets. Industry leaders have largely welcomed the prospect of a more focused regulatory framework, viewing it as a positive step toward legitimizing digital assets and fostering growth.
However, skeptics caution that transferring power to the CFTC may not resolve all regulatory challenges. Questions remain about how the agency will handle its expanded responsibilities and whether additional legislation will be needed to define its role in the crypto space.
Global markets are also watching closely, as the US remains a key player in the adoption and regulation of digital assets. The Trump administration’s approach could set a precedent for other nations navigating similar regulatory dilemmas.
Ripple’s $25 Million PAC Donation Aims to Influence Pro-Crypto Political Landscape
In other news, blockchain payments firm Ripple, a prominent player in the cryptocurrency industry, has announced another major contribution to the Fairshake political action committee (PAC), reaffirming its commitment to influencing US elections and promoting pro-crypto policies.
Ripple CEO Brad Garlinghouse revealed in a Nov. 26 social media post that the company would contribute $25 million to Fairshake to bolster efforts aimed at electing “pro-crypto, pro-growth, and pro-innovation candidates” in upcoming US elections.
The announcement comes on the heels of Ripple’s previous contributions to Fairshake, amounting to $45 million during the 2024 election cycle, positioning Ripple as one of the PAC’s most significant financial backers alongside cryptocurrency exchange Coinbase, Jump Crypto, and venture capital giant Andreessen Horowitz.
Fairshake’s Impact on the Political Landscape
Fairshake has become a driving force in shaping US politics around cryptocurrency regulation. The PAC confirmed that it has amassed approximately $103 million in funds, which will be deployed during the 2026 US election cycle.
During the 2024 primaries and general elections, Fairshake emerged as one of the most influential spenders, with its efforts contributing to the election of a pro-crypto majority in Congress. According to Fairshake, about two-thirds of elected candidates are considered advocates for the cryptocurrency industry, a significant win for the sector.
While Fairshake maintains a bipartisan focus, its activities come at a pivotal moment in US politics. The 2024 election resulted in a Republican sweep of the presidency, Senate, and House of Representatives—a “trifecta” win not seen since 2017. This shift could bring a new legislative agenda that prioritizes bills like the Financial Innovation and Technology for the 21st Century Act and stablecoin regulation.
Ripple’s latest contribution is evidence of the crypto industry’s growing involvement in US politics as it seeks to establish a favorable regulatory framework. By supporting Fairshake, Ripple aims to ensure that lawmakers take a balanced approach to crypto regulation, promoting innovation while addressing legitimate concerns.
Brad Garlinghouse, a vocal advocate for clear and fair crypto policies, highlighted the importance of the 2026 elections in shaping the industry’s future. Fairshake has already indicated plans to focus on key races, such as the Ohio Senate seat currently held by Sherrod Brown, the Democratic chair of the Senate Banking Committee and a prominent crypto critic.
While Ripple as a company has thrown its weight behind Fairshake, its leadership has demonstrated diverse political allegiances. CEO Brad Garlinghouse, for instance, refrained from direct contributions to Donald Trump’s presidential campaign but expressed confidence in the Republican president-elect’s ability to “make crypto great again.” In contrast, Ripple co-founder and executive chairman Chris Larsen contributed $12 million to PACs supporting Democratic Vice President Kamala Harris’s campaign.
The next US midterm elections, scheduled for Nov. 3, 2026, will see all 435 seats in the House of Representatives and 33 Senate seats up for grabs. With a pro-crypto Congress in place, the 2026 cycle could be a turning point for the cryptocurrency industry as it continues to lobby for comprehensive and innovation-friendly legislation.
Fairshake’s success in the 2024 elections suggests that the PAC will continue to play a critical role in shaping crypto-friendly policy debates. However, its ability to influence outcomes in 2025 and 2026 will depend on how the newly elected Congress addresses pressing regulatory issues, including:
Stablecoin Legislation: Establishing clear rules for stablecoin issuers to promote transparency and stability.
Digital Asset Frameworks: Crafting laws that define the roles of agencies like the SEC and CFTC in regulating cryptocurrencies.
Tax and Reporting Policies: Simplifying tax obligations for crypto users and companies while ensuring compliance.
The stakes are high for the crypto industry as it pushes for clarity and consistency in regulation. While some in the industry view the Republican majority as an opportunity to pass pro-innovation laws, others caution against overconfidence, noting that partisan divides could still hinder progress on complex regulatory issues.
This article was originally Posted on Coinpaper.com
