Report Warns That Crypto Deregulation in the US Poses Significant Risks 

A new report from the Center for Political Accountability (CPA) warns that cryptocurrency companies are gaining too much political influence in the United States. The report highlights how these companies have increased their political spending while benefiting from reduced government oversight under the Trump administration. With Trump now actively supporting cryptocurrency, the report raises concerns about risks to investors, financial stability, and public trust.

Cryptocurrency companies have become a major force in U.S. elections. In the 2024 election cycle alone, these companies spent more than $134 million on political contributions. Their financial influence was particularly strong in key races, such as the California Senate primary, where crypto-skeptic candidate Katie Porter faced heavy opposition, while pro-crypto candidate Adam Schiff benefited from industry support.

After the election, major crypto firms like Kraken and Coinbase donated $1 million each to Trump’s Inaugural Fund. The CPA warns that this level of corporate political spending, especially from an unpredictable industry like cryptocurrency, could weaken financial regulations and harm investor confidence.

Since taking office, Trump has moved quickly to reduce government control over the crypto industry. One of his first major actions was removing SEC Chair Gary Gensler, who was known for his strict stance on cryptocurrency. Soon after, the Securities and Exchange Commission (SEC) dropped lawsuits against Kraken and Coinbase, two companies previously accused of operating illegally.

Trump has also taken steps to make cryptocurrency part of national economic policy. He recently signed an executive order to create a U.S. Crypto Strategic Reserve, a taxpayer-funded program designed to support the industry. Critics argue that this move benefits big businesses rather than protecting consumers. They worry that without proper regulations, the crypto industry could become even riskier.

One of the biggest concerns in the report is Trump’s appointment of David Sacks as “crypto czar.” While Sacks has sold his personal crypto holdings, he remains a partner in an investment firm that could benefit from government crypto purchases. This raises questions about conflicts of interest and whether crypto companies are using political influence for financial gain.

The CPA report also points to Argentina as a warning. President Javier Milei, who is politically similar to Trump, promoted a cryptocurrency called $Libra, which lost $4.6 billion in value in just hours. The scandal led to fraud investigations and calls for his impeachment. Experts warn that if the U.S. removes regulations, similar financial disasters could happen.

The CPA’s findings highlight the dangers of allowing cryptocurrency companies to grow without proper oversight. While crypto offers innovation and investment opportunities, the report warns that deregulation, political influence, and conflicts of interest could lead to serious financial risks. As Trump continues to support the crypto industry, lawmakers and regulators must find a balance between growth and consumer protection.

Industry players like Coinbase Global Inc. (NASDAQ: COIN) are likely to conduct their own SWOT analysis to ascertain how the changing crypto landscape in the U.S. could present new opportunities and risks to their operations.

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