Caroline Pham’s comments during a recent event are welcome, cold, adult-sized dashes of water on the faces of increasingly bullish crypto enthusiasts. That notion that a Trump administration just automatically unlocks “easy street” for the crypto industry? It's a dangerous fantasy. And Pham, bless her, is calling it out.

Pro-Innovation Isn't Pro-Lawlessness

Let's be brutally honest: a segment of the crypto world has confused "innovation" with a license to operate outside the law. Lying, cheating, and stealing? Pham is correct to assert that these kinds of conditions should not be acceptable under any administration, even one that claims to be pro-innovation.

Think about it: would you trust a traditional financial institution that openly flouted regulations? Of course not. Why should crypto be any different? The industry must grow up, and part of that means welcoming strong oversight. The CFTC may be small, but it carries a big stick. It oversees a multi-trillion dollar derivatives market. We’re talking serious influence.

Their proposed expansion of authority, taking them into the spot markets for Bitcoin and other digital assets? That’s a game-changer. Consumer protection and market integrity don’t go away with a change in administration, so don’t act that way.

Trump's Regulatory History: A Reality Check

Furthermore, the assumption that Trump = deregulation is a gross oversimplification. Remember, Trump did sign the Dodd-Frank rollback. But he did act on Chinese firms stealing IP. So, unexpected connections here: he's pragmatic and unpredictable. He's not ideologically opposed to all regulation. So on the one hand, you’ve got his opposition to what he sees as unfair regulation.

A market rife with scams and manipulation? That screams "unfair."

On that score, the crypto industry has its work cut out but it must make a persuasive argument that is more than an elaborate grifters’ playground. To regain public trust, they must show more than good intentions. They have to lead by example. Or else, they’re giving regulators like Pham (and a future, even stricter CFTC) all the ammo they desire.

Betting Markets and the Bigger Picture

The CFTC’s interest in preventing the widespread growth of new betting markets could appear tangential. It highlights a key concern: the potential for abuse and manipulation. Robinhood and Kalshi eyeing these markets? Perhaps worst of all, it sends a signal that players with bad faith intentions focused on gambling will overpower meaningful innovation.

This is where the anxiety kicks in. If the industry pursues this dangerous path any longer, it is setting itself up for a regulatory backlash that will kill a good bit of legitimate development.

With Pham and Commissioner Kristin Johnson plotting their exits, the stakes are particularly high. Who will replace them? Will their replacements share Pham's balanced approach? Or will they be less likely to cave on a punitive approach?

The likely appointment of Brian Quintenz, a former CFTC commissioner now serving as the crypto wing of venture capital firm a16z, is particularly intriguing. Pham supports him, citing his clear record. Even having Quintenz on board, the direction of the CFTC is unclear.

A Call to Action, Not Complacency

So, what's the actionable advice here? Don't rely on wishful thinking. Take for granted that a Trump administration will be a cakewalk. And by all means don’t insult us by pretending that “innovation” excuses illegal behavior.

The future of crypto is not predetermined. Just as the title promises, it all comes down to the decisions the industry decides to make today. Pham’s warning shouldn’t be taken as a threat—far from it, in fact. A chance to create a more sustainable, responsible, and ultimately more successful crypto ecosystem. The time to act is now. Don’t let the next administration decide your future for you.

  • Embrace compliance: Invest in robust compliance programs and work proactively with regulators.
  • Clean up the bad actors: Self-regulation is crucial. The industry needs to police itself and weed out the scammers and manipulators.
  • Focus on real-world utility: Demonstrate the value of crypto beyond speculation and gambling.
  • Engage in constructive dialogue: Work with policymakers to develop sensible regulations that foster innovation while protecting consumers.

The future of crypto is not predetermined. It depends on the choices the industry makes today. Pham's warning isn't a threat; it's an opportunity. An opportunity to build a more sustainable, responsible, and ultimately successful crypto ecosystem. The time to act is now. Don't wait for the next administration to dictate your fate.