If the new administration wants to create fair and effective crypto policy, it needs to listen to everyday Americans. John Deaton, a Republican candidate for Senate in Massachusetts in 2024, emphasizes this point. He also represented XRP holders in Ripple’s important case against the SEC.
Recently, President Trump took a big step by issuing an Executive Order that formed a Crypto Council. This council is led by investor and entrepreneur David Sacks. This move, along with the reversal of SAB 121—which made it hard for banks to hold crypto assets—shows that the administration is serious about breaking down barriers to crypto adoption.
This council offers a chance to fix the damage done to the crypto industry during the Biden Administration. Instead of being hostile, Trump’s Crypto Council can lead the way for innovation, responsible oversight, and, most importantly, protect the customers and retail investors who supported him.
While it’s important for major crypto companies like Coinbase, a16z, and Ripple to be involved, the council shouldn’t just be made up of industry giants. For too long, retail investors have been overlooked and even attacked, not just by figures like Sam Bankman-Fried but also by the very regulatory agency meant to protect them. The new administration must ensure that the voices of everyday Americans are part of this conversation.
Over the past four years, the Biden administration, through officials like Senator Elizabeth Warren and former SEC Chair Gary Gensler, has waged an unfair campaign against the crypto industry. The Chokepoint 2.0 initiative aimed to cut crypto companies off from the banking system, limiting their access to essential financial services. This stifled innovation in the U.S. and pushed customers and retail investors into risky situations.
As an attorney working pro bono, Deaton represented 75,000 XRP holders in the Ripple case. He submitted thousands of affidavits from retail investors, which were referenced by Judge Analisa Torres in her landmark ruling. He also served as amicus counsel in other important cases, like LBRY and Coinbase, advocating for those who can’t afford to lobby Congress or fight back against government overreach.
The new Crypto Council must avoid becoming an exclusive club for industry elites. It needs to include advocates for retail investors—people who understand the real-world impact of policy decisions. It’s one thing to talk about market structure and innovation; it’s another to stand alongside individuals whose financial futures depend on fair regulations.
While the national conversation has recently focused on initiatives like a Strategic Bitcoin Reserve, this administration has a unique opportunity to pass meaningful crypto legislation that promotes growth while ensuring investor protection. Time is of the essence, especially with the midterm elections approaching.
Here are several key priorities that need attention:
- Stablecoin Legislation: Create a framework that increases demand for U.S. Treasuries while reducing friction and fees for cross-border payments. This will help stablecoins serve as reliable financial tools for global commerce.
- Market Structure Reform: Grant clear authority to the CFTC to oversee digital assets and set guidelines for when a token is classified as a security, thus governed by the SEC.
- Centralized Exchange Oversight: Require exchanges to separate customer funds from corporate assets. Ensure customer funds are protected in bankruptcy proceedings and that exchanges maintain 100% reserves. Ban rehypothecation of customer funds and impose limits on leverage trading to protect retail investors.
- Tax Policy Reform: Reverse outdated policies that treat the use of crypto as currency as a taxable event. Everyday transactions should not trigger capital gains taxes.
The effectiveness of the Crypto Council will depend on the diversity of voices it includes. If it becomes just another gathering of industry executives and venture capitalists, it will fail to create fair and inclusive policy.
Retail investors and those using digital assets for payments, remittances, savings, and investments deserve representation. They are not just stakeholders; they are voters who played a key role in electing this administration. Their interests must come first, not just those of powerful institutions.
Deaton urges David Sacks, Bo Hines, and the administration to ensure that the Crypto Council reflects a wide range of voices, not just the loudest and wealthiest. If we get this right, the United States can lead in digital asset innovation while protecting the rights of those who make this industry possible.
Clear and predictable regulation will benefit retail investors and drive innovation and economic growth in the U.S. For too long, promising crypto projects have moved overseas due to regulatory uncertainty. A well-designed legal framework will bring these innovators back, ensuring that the U.S. remains at the forefront of financial technology.
This is our chance to build a framework that fosters trust, fairness, and economic opportunity while embracing an America First agenda. Let’s not waste it.