Where we are at and where are going:

Legitimate crypto businesses of the world to date, depending on your perspective, have either been the source of regulator witch hunts, or subject to “strict oversight", as securities and financial market regulators grapple with the unwieldy beast that is crypto. Firmly on Regulators’ agendas in particular, is managing and protecting retail customer exposure to what we can all agree is a speculative and highly volatile asset class. 

The 3 Trillion dollar question (being the global crypto market cap last cycle, already exceeded this cycle) is this: how will Regulators’ reception toward crypto business change on and from 2025? While only time will tell, as the first ever pro-crypto US administration prepares to assume power in January, one thing is clear - under Trump a new era for crypto business is emergent. And it is positive. Here’s why: 

Green signals:

• Consumer sentiment is confident, the markets have responded, much to our collective relief as BTC hit an all time high of 103K USD last week. Yes, it corrected, but welcome to the bull market. We’re officially on. 

• The forces have been corralled: Trump announced 6.12.24 that David Sacks’ appointment as the “White House AI and Crypto Czar”, his mandate: to produce a clear legal framework for crypto that makes the US a global leader in both it and AI. Critically, the lead time to produce a legal framework for anything, not least crypto, is measured in years, not months. On average, it takes 1-2 years for a law to move from policy-making to enactment in the United States, though this timeframe can vary depending on the complexity, controversy and legislative priorities. Add to that the important measure of testing new legislation through Regulator-initiated court actions. Initiating investigative actions, mounting cases, and skilling enforcement departments could add another year to the tally. 

• Many in Trump’s administration enter office with significant existing crypto interests and a pro-crytpo agenda, including Vice-President-elect JD Vance, Robert Kennedy Jr., Howard Lutnick, Pete Hegseth, and Tulsi Gabbard — Trump’s appointments to Health and Human Services secretary, Commerce secretary, Defense secretary, and director of national intelligence, respectively. Most interesting of all appointments is Howard Lutnick, billionaire and co-chair of Trump’s transition team, who is head of brokerage and investment bank Cantor Fitzgerald and a cryptocurrency enthusiast.
  
  

• Trump’s personal crypto holdings include ETH-USD of between 1 and 5M USD, Trump and his sons own 22.5% of the World Liberty Financial crypto token (WLFI-USD) along with 75% of any net revenues after World Liberty earns $30 million. And if you missed Trump’s NFT dalliances last cycle, don’t worry, he released a fourth wave this year.
  
  

• Crypto big business has responded publicly to what signals cleaning house efforts underway at the SEC. Last week Coinbase CEO Bryan Johnson told law firms that were thinking of hiring former regulators that were anti crypto to start packing and don't let the door hit you on the way out.
  
  

• Speaking at CoinMENA this week in Dubai, Eric Trump has promised the most pro-crypto president in the US’s history. Yes, conference keynotes are 99% hype, but we keep seeing consistent positive signals emanate from what was previously an ocean of noise.

US is no longer bearish, the time is now

In years prior we have adopted an avowedly cautious approach toward any project with US ties, US founders or most importantly, interest in US retail customers, and deservedly so. The SEC and other enforcement agencies have previously initiated actions against crypto projects small and large, including DAOs, token issuers, exchanges, and practically anyone with a dust of Eth received from Tornado Cash with the notches of big fish Binance, Coinbase, Kraken, Ripple, Terraform Labs and SafeMoon joined by smaller players including Barnbridge, Ookie and Stoner Cats 2 on the SEC’s belt. Critical to many of these actions is the status of crypto - are tokens securities or not?! The reality is that tokens demonstrating the characteristics of financial projects are likely to be financial products. Staking and rewards, revenue distribution, marketing an expectation of profit (to the moon!) - these are all problematic, and can land projects, even the most well meaning, inadvertently in hot water. So how hot is too hot in 2025? We see serious practical challenges to the SEC bringing successful enforcement actions against token issuers in 2025 and into 2026. Our prediction tracks with the timeframe it will take to produce a clear legal framework for crypto businesses in the US, and the testing of that framework through enforcement actions. In short, it’s game on. 

If you want advice about structuring your token launch, get in touch now.