Is Biden’s War on Crypto Really Over?
Although Joe Biden no longer occupies the Oval Office, and President Trump has taken an ax to many of his executive orders, it would be wrong to assume that the 46th Commander-in-Chief’s four-year term has been memory-holed.
Where cryptocurrency is concerned, Biden famously vetoed significant legislation, including a bill that would let regulated financial firms custody bitcoin. Trump, by contrast, has vowed to make America the crypto capital of the world: earlier this year, he signed the GENIUS Act into federal law, a comprehensive regulatory framework for stablecoins.
Despite the current President adopting a wholly different crypto stance from his predecessor, America knows only too well the difficulty of cleanly extracting itself from a war zone. Thus, while Trump purportedly ended Biden’s war on crypto – not only through GENIUS but by pardoning Binance co-founder Changpeng Zhao – old Joe’s hostility still permeates the industry like a particularly noxious gas.
Trump: A Great Liberator or Opportunist?
Naturally, the crypto industry is inclined to endorse Trump’s claim that the Biden-era investigations, prosecutions, and regulatory crackdowns constituted a witch-hunt, and that he has swooped in to save the sector from persistent harassment. But the dawn of a new era hasn’t just brought sunshine and rainbows.
Let’s face it, it would be simplistic to characterize Trump’s pivot as a purely principled philosophical shift. Rather, it’s a mélange of politics, business, and personal incentives.
Trump is rewarding an industry and players from it, who heavily backed his campaign. In throwing his weight behind crypto, he’s also smoothing the path for his own family’s multi-billion-dollar crypto empire, raising serious ethical concerns about conflicts of interest, selective justice, and regulatory capture.
The War Goes On
But back to questions concerning whether Biden’s anti-crypto stance is a thing of the past. The Zhao pardon would have suggested this to be the case, yet JPMorgan’s recent closure of Strike CEO Jack Mallers’ personal bank accounts suggests otherwise.
Mallers took to X to vent about the bank’s abrupt action, noting that each time he asked for an explanation, JPMorgan responded: “We aren’t allowed to tell you.” The story has given rise to speculation that Operation Chokepoint 2.0 – Biden’s initiative to target and debank the digital asset ecosystem – remains a going concern. Rather than being sunsetted, it’s gone dark; until now.
Back in August, Trump signed an executive order forbidding financial institutions from shutting accounts due to crypto-related activity. In the wake of the Mallers incident, though, Senator Cynthia Lummis opined that “Operation Chokepoint 2.0 regrettably lives on,” adding, “Policies like JP Morgan’s undermine confidence in traditional banks and send the digital asset industry overseas.”
Despite Lummis’ opprobrium and a pro-crypto attitude in Washington’s corridors of power, major banks often still act as gatekeepers, quietly cutting off crypto-linked founders and companies with the stroke of a pen. The structural, institutional resistance to crypto rails is clearly less malleable than political perspectives in the capital.
Although Trump’s pardon of Zhao emphasized an attitudinal shift in the White House, Anatoly Legkodymov had less luck. The Russian national, who co-founded Hong Kong-registered crypto exchange Bitzlato, was arrested two years ago after the DoJ accused him of transmitting $700m in illicit funds. Earlier this year, Legkodymov pleaded for a Presidential pardon as the prospect of extradition to France – and a further 20 years behind bars – loomed large.
Interestingly, Legkodymov has already served the 18-month sentence handed down in a Brooklyn federal court. Yet he remains in custody pending possible extradition. Why, after pleading guilty and serving his stretch, hasn’t the executive been freed? If his legal challenge is struck down, he could be extradited to France to face jail for the same crime he’s already been convicted of.
As with Mallers, many within believe that the Legkodymov controversy indicates a longstanding and deep-seated prejudice against executives operating outside the traditional TradFi framework.
Whatever your view, it’s clear that despite a crypto-friendly White House, the land of milk and money was always an illusion. Ideological schisms remain, prejudice exists, and if blockchain and crypto eventually do become the future of finance, the old guard won’t go down without a fight. The war goes on.
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