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Could the SEC be much harsher on crypto under Biden?

Photo of: Nathan VDH
by Nathan VDH

U.S. President-elect Joe Biden could be “letting the regulatory dogs out of the bag” as soon as he takes office in January, according to experts, who claim that “there will be a new regulatory sheriff in town, and he won’t be business-friendly”.

“We are anxious to see if the approach will be conservative on issues such as the approval of a Bitcoin ETF as well as the regulatory approach for DeFi,” BitOoda Financial Services Platform said in a note to its clients today, commenting on possible changes at the U.S. Securities and Exchange Commission (SEC).

And although no official name has been announced, speculation is already beginning to circulate.

Mr. Biden’s election could mean a change in the U.S. financial regulator, the SEC, which has been described as a “divided agency” from which “President Jay Clayton and the accommodating approach to big business will likely be fired soon,” wrote an analyst for the Law360 site.

The site states that Nick Morgan, a partner of Paul Hastings and a former senior SEC attorney, said Clayton could be shown the way out once Biden takes power and may seek to appoint Preet Bharara, the former U.S. Attorney for the Southern District of New York, who has been called the “most dangerous man for Bitcoin” (BTC) in 2014.

In an interview with Fast Company in 2014, Bharara stated: “No one is suggesting that there is anything inherently wrong with Bitcoin. When you have a currency like this that gives you anonymity, of course, some people legitimately want privacy. That’s fine. But there will be a lot of bad people who will want to steal your money or sell poison to people who are going to take advantage of the same technology. That’s why we have to be vigilant”.

At the time, he added that a closer look at crypto would “make sure” that the scene “does not become a Wild West for criminal activity”.

Howard Fischer, a partner at Moses & Singer and former senior SEC counsel, also told Law360 that the Biden administration’s SEC “will be better funded and will hire more review and enforcement staff,” he added, “You’ll probably find that the cryptos division will be more aggressive under Biden.”