Cryptocurrency firms are still trying to navigate unclear regulatory standards. A memecoin dinner invitation extended to Trump backers has stirred up political ire in Washington. Investment advisers are struggling to know which of the thousands of cryptocurrency assets are securities, which is causing real harm and confusion in the marketplace. The controversy has sharpened political divides, most recently illustrated by a Republican request for impeachment hearings against Donald Trump.
As US Securities and Exchange Commission (SEC) Commissioner Hester Peirce recently noted, firms cannot know what to expect when they try to do anything crypto-related. She emphasized that the lack of federal guidelines drives companies to avoid engaging directly with digital assets. This not only makes them more efficient, but it allows them to prevent possible regulatory violations. Peirce offered these comments during the April 25th “Know Your Custodian” event.
"A D.C. version of this game is our regulatory approach to cryptocurrency assets, and cryptocurrency asset custody in particular." - Hester Peirce
First, entities continue to be confused as to which organizations qualify as custodians of cryptocurrency assets. Even something as innocuous as engaging in governance or staking can risk regulatory infraction, Peirce argued.
"SEC-registrants have had to hop from one poorly illuminated regulatory space to the next, all while ensuring that they never touch any cryptocurrency asset." - Hester Peirce
The battle over which agency has jurisdiction over the regulation of cryptocurrency has spilled over into the political sphere. US Senator Jon Ossoff voiced his support for launching impeachment proceedings against President Donald Trump over a controversy related to a memecoin.
That’s not how this extreme controversy started. It made public a secret dinner hosted by Trump himself, at his DC-area golf club, for the top holders of the “Official Trump” memecoin. The dinner was limited to the first 220 TRUMP token holders. Applicants needed to pass standardized background checks and be subject to defined eligibility criteria, such as not being listed on Know Your Customer (KYC) watchlists.
"[…] the sitting president of the United States is selling access for what are effectively payments directly to him. There is no question that that rises to the level of an impeachable offense." - Jon Ossoff
With the evolving world of cryptocurrency, regulatory bodies are trying to keep pace and shape regulations to provide clarity to cryptocurrency users. Paul Atkins is in preparation to work with Congress and the Trump administration. As a first step, they will work collaboratively to create a market-specific regulatory framework for cryptocurrency assets. If implemented, this would indicate a significant shift from the agency’s prior position on any and all cryptocurrency assets.
If Democrats retake control of the chamber in the 2026 midterm elections, GOP-led impeachment proceedings against Trump may be revived. This would add a new layer of regulatory uncertainty for the nascent crypto space.
