State of Crypto: Trump’s Second First Week

Donald Trump is officially the 47th President of the United States, and the U.S. government is going in some different directions from the last administration. You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions. The narrative U.S. President Donald Trump was sworn into office on Monday and quickly signed a flurry of executive orders. While it took him a few days to get to crypto-specific items, we've seen a number of actions from his administration already — not to mention the broader Republican Party. Why it matters These agencies and Congressional bodies' initial actions set the tone for what we can expect as the new Congress and administration really get going this year. Breaking it down There'll be time to go more into detail on some of these later, but for now: White House/Administration Donald Trump signed a highly-anticipated executive order on crypto. Among its provisions are items that: Create a working group composed of Cabinet officials, White House advisers and others tasked with identifying regulations that address crypto and recommending whether they be changed. AI and crypto czar David Sacks will chair this working group. Task the working group with evaluating a digital asset stockpile. Ban any central bank digital currency, with a somewhat broad definition of a CBDC. Revoke former President Joe Biden's executive order on crypto, which mostly just directed his Departments to craft reports about various aspects of crypto and consumer protections. Trump also announced that Sacks would co-chair his President's Council of Advisors on Science and Technology. The U.S. Securities and Exchange Commission, now operating under Acting Chair Mark Uyeda, formed a crypto-focused task force headed up by Commissioner Hester Peirce. Trump previously named Paul Atkins as his pick to serve as the agency's chair, once he's confirmed by the Senate. One of the SEC's first moves was to rescind Staff Accounting Bulletin 121, which directed publicly traded companies holding crypto for their clients to mark those holdings on their own balance sheets. SAB 121 was strongly opposed by the crypto industry, which argued that it made it more difficult for banks to provide certain crypto services. The Commodity Futures Trading Commission is now operating under Acting Chair Caroline Pham. Pham named CFTC Senior Policy Advisor Harry Jung as the regulator's lead for crypto industry engagement. Trump has not yet named a nominee to take over as permanent chair. Trump pardoned Silk Road creator Ross Ulbricht, saying on Truth Social that he did so "in honor of [Ulbricht's mother] and the Libertarian Movement, which supported me so strongly." Ulbricht was convicted on criminal enterprise, narcotics distribution and various conspiracy charges and sentenced to double life in prison and 40 years with no parole. Trump announced he would rename the existing U.S. Digital Service as his Department of Government Efficiency, the entity headed up by Elon Musk (Vivek Ramaswamy, who was previously a co-head, has now left to run for Ohio governor). Initially, the entity's website just had the Dogecoin logo on it. Companies are also filing for dogecoin exchange-traded funds now. Trump spoke with El Salvador President Nayib Bukele shortly after signing his crypto executive order, though an official readout of the call did not mention crypto in any form. Senate The Senate Banking Committee has confirmed the creation of a subcommittee focused on digital assets, led by Sen. Cynthia Lummis (R-Wyo.). The subcommittee's other members include freshmen Bernie Moreno (R-Ohio), who unseated former Sen. Sherrod Brown (D-Ohio) with $40 million worth of support from crypto political action committee Fairshake, Ruben Gallego (D-Ariz.), who received $10 million worth of support and Dave McCormick (R-Pa.), among others. The Banking Committee is also holding a hearing on Feb. 5, though the specific time and witness list have yet to be announced. Sen. Ted Cruz (R-Texas) introduced a joint Congressional Review Act resolution alongside House Rep. Mike Carey (R-Ohio) to overturn the IRS' recent crypto broker rule. The rule, finalized late last month, defines the term "broker" for IRS tax reporting purposes, but has already drawn a lawsuit from the Blockchain Association. The industry lobbyists argue the final rule "puts unlawful compliance burdens on software developers." Sen. Elizabeth Warren (D-Mass.), the new lead Democrat on the Senate Banking Committee, is also asking the U.S. Office of Government Ethics to look into the TRUMP token. She sent an open letter co-signed by Massachusetts Representative Jake Auchincloss. House of Representatives The House Oversight Committee sent out a letter announcing it would investigate whether banks de-banked crypto companies at the government's behest. The House Financial Services Committee has already scheduled two hearings on crypto next month. The first, on Feb. 6, 2025, will focus on the aforementioned debanking. The second, set for Feb. 11, is titled "A Golden Age of Digital Assets: Charting a Path Forward." The leading Democrat on the House Oversight Committee, Rep. Gerry Connelly, asked the panel's leading Republican, Rep. James Comer, to probe Trump's issuance of the TRUMP coin and his ties to World Liberty Financial. Tuesday 16:00 UTC (9:00 a.m. MT) The 10th Circuit Court of Appeals heard arguments in Custodia Bank's ongoing case against the Federal Reserve. (Sam Curry) Some security researchers discovered they could track and control certain Subaru cars (i.e. ones connected to the internet). The vulnerability has been patched, per the writer of this. (Bloomberg) Walgreens spent $200 million replacing refrigerator doors with screens whose vendor is now in a legal fight with the pharmacy/convenience store chain. If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social. You can also join the group conversation on Telegram. See ya’ll next week!

Donald Trump is officially the 47th President of the United States, and the U.S. government is going in some different directions from the last administration.

You’re reading State of Crypto, a CoinDesk newsletter looking at the intersection of cryptocurrency and government. Click here to sign up for future editions.

The narrative

U.S. President Donald Trump was sworn into office on Monday and quickly signed a flurry of executive orders. While it took him a few days to get to crypto-specific items, we’ve seen a number of actions from his administration already — not to mention the broader Republican Party.

Why it matters

These agencies and Congressional bodies’ initial actions set the tone for what we can expect as the new Congress and administration really get going this year.

Breaking it down

There’ll be time to go more into detail on some of these later, but for now:

White House/Administration

Donald Trump signed a highly-anticipated executive order on crypto. Among its provisions are items that:

  • Create a working group composed of Cabinet officials, White House advisers and others tasked with identifying regulations that address crypto and recommending whether they be changed. AI and crypto czar David Sacks will chair this working group.
  • Task the working group with evaluating a digital asset stockpile.
  • Ban any central bank digital currency, with a somewhat broad definition of a CBDC.
  • Revoke former President Joe Biden’s executive order on crypto, which mostly just directed his Departments to craft reports about various aspects of crypto and consumer protections.

Trump also announced that Sacks would co-chair his President’s Council of Advisors on Science and Technology.

The U.S. Securities and Exchange Commission, now operating under Acting Chair Mark Uyeda, formed a crypto-focused task force headed up by Commissioner Hester Peirce. Trump previously named Paul Atkins as his pick to serve as the agency’s chair, once he’s confirmed by the Senate.

One of the SEC’s first moves was to rescind Staff Accounting Bulletin 121, which directed publicly traded companies holding crypto for their clients to mark those holdings on their own balance sheets. SAB 121 was strongly opposed by the crypto industry, which argued that it made it more difficult for banks to provide certain crypto services.

The Commodity Futures Trading Commission is now operating under Acting Chair Caroline Pham. Pham named CFTC Senior Policy Advisor Harry Jung as the regulator’s lead for crypto industry engagement. Trump has not yet named a nominee to take over as permanent chair.

Trump pardoned Silk Road creator Ross Ulbricht, saying on Truth Social that he did so “in honor of [Ulbricht’s mother] and the Libertarian Movement, which supported me so strongly.” Ulbricht was convicted on criminal enterprise, narcotics distribution and various conspiracy charges and sentenced to double life in prison and 40 years with no parole.

Trump announced he would rename the existing U.S. Digital Service as his Department of Government Efficiency, the entity headed up by Elon Musk (Vivek Ramaswamy, who was previously a co-head, has now left to run for Ohio governor). Initially, the entity’s website just had the Dogecoin logo on it. Companies are also filing for dogecoin exchange-traded funds now.

Trump spoke with El Salvador President Nayib Bukele shortly after signing his crypto executive order, though an official readout of the call did not mention crypto in any form.

Senate

The Senate Banking Committee has confirmed the creation of a subcommittee focused on digital assets, led by Sen. Cynthia Lummis (R-Wyo.). The subcommittee’s other members include freshmen Bernie Moreno (R-Ohio), who unseated former Sen. Sherrod Brown (D-Ohio) with $40 million worth of support from crypto political action committee Fairshake, Ruben Gallego (D-Ariz.), who received $10 million worth of support and Dave McCormick (R-Pa.), among others.

The Banking Committee is also holding a hearing on Feb. 5, though the specific time and witness list have yet to be announced.

Sen. Ted Cruz (R-Texas) introduced a joint Congressional Review Act resolution alongside House Rep. Mike Carey (R-Ohio) to overturn the IRS’ recent crypto broker rule. The rule, finalized late last month, defines the term “broker” for IRS tax reporting purposes, but has already drawn a lawsuit from the Blockchain Association. The industry lobbyists argue the final rule “puts unlawful compliance burdens on software developers.”

Sen. Elizabeth Warren (D-Mass.), the new lead Democrat on the Senate Banking Committee, is also asking the U.S. Office of Government Ethics to look into the TRUMP token. She sent an open letter co-signed by Massachusetts Representative Jake Auchincloss.

House of Representatives

The House Oversight Committee sent out a letter announcing it would investigate whether banks de-banked crypto companies at the government’s behest.

The House Financial Services Committee has already scheduled two hearings on crypto next month. The first, on Feb. 6, 2025, will focus on the aforementioned debanking. The second, set for Feb. 11, is titled “A Golden Age of Digital Assets: Charting a Path Forward.”

The leading Democrat on the House Oversight Committee, Rep. Gerry Connelly, asked the panel’s leading Republican, Rep. James Comer, to probe Trump’s issuance of the TRUMP coin and his ties to World Liberty Financial.

SoC 012125

Tuesday

  • 16:00 UTC (9:00 a.m. MT) The 10th Circuit Court of Appeals heard arguments in Custodia Bank’s ongoing case against the Federal Reserve.
  • (Sam Curry) Some security researchers discovered they could track and control certain Subaru cars (i.e. ones connected to the internet). The vulnerability has been patched, per the writer of this.
  • (Bloomberg) Walgreens spent $200 million replacing refrigerator doors with screens whose vendor is now in a legal fight with the pharmacy/convenience store chain.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!

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Creator of Controversial LIBRA Memecoin Introduced MELANIA, Says He Sniped Both Tokens

Kelsier CEO Hayden Davis, the brains behind the controversial LIBRA memecoin, said he also launched the MELANIA memecoin and that his team sniped both tokens as soon as the contract addresses went live.
LIBRA was released on Friday, sparking a now-deleted tweet of support from Argentina’s President Javier Milei saying it would support small and mid-sized businesses in the country. His backtracking on the project prompted a 95% plunge in the token’s value.

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Sniping is when people use bots to buy memecoins seconds after the smart contract goes live. Wallets that snipe funds are often those that end up with the majority of profit.
The token was “not a rug pull,” Davis insisted in an interview with crypto scam hunter Coffeezilla. “It’s just a plan gone miserably wrong with $100 million sitting in an account that I’m the custodian of.”

Profit made from MELANIA liquidity
It turns out this isn’t Davis’ first rodeo. He also had a part in launching the MELANIA memecoin linked to U.S. First Lady Melania Trump.
“I’m happy to share the truth. You’re asking a question that’s going to put me in a lot of danger, but I’ll answer it,” Davis said when questioned about MELANIA. “I was part of it. I think the team did want to snipe it because how big the snipe was on Trump’s [memecoin]. We definitely weren’t the big sniper. There was no money made from the MELANIA team, we didn’t take any liquidity out, zero.”
Davis appeared to contradict himself shortly after being confronted with on-chain data: “We didn’t swap liquidity [but] I didn’t say there was no money sold. There’s a difference between swapping liquidity and selling liquidations.”
MELANIA is currently trading at a $625 million market cap after debuting at $2.1 billion on Jan. 20.
Refunds … for insiders
The controversy surrounding LIBRA continued as Davis sent Barstool Sports founder Dave Portnoy a $5 million a refund after Portnoy lost money on LIBRA.
In a conversation with Coffeezilla, Portnoy said that he knew about the project for weeks before the launch and that he purchased the tokens 10 minutes after Milei’s tweet.
That Portnoy knew LIBRA so early and that he received a refund afterwards raises the specter of insider trading. But Davis dismissed that idea.

“The idea of insiders is always bullshit because every memecoin I’ve ever known or invested in or been a part of, the people that benefit are the people that know … people that structure the deal.
“[It’s] similar to any other business in the world. So I think that’s a bit of bullshit and that’s just crypto people that are angry because there’s an unfair advantage.”
CoinDesk contacted Davis and Portnoy for comment, but had not heard back by publication time.

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EU Commission Warns a Host of Member States on Adoption of Energy Rules

The European Commission has issued so-called reasoned opinions to several member states for failing to comply with energy-related laws.

The Commission urged Bulgaria, Spain, France, Italy, Cyprus, the Netherlands, Slovakia, and Sweden to transpose EU rules accelerating permitting procedures for renewable energy projects. The rules, in Directive (EU) 2023/2413, amend the Renewable Energy Directive (Directive (EU) 2018/2001), providing new rules to simplify and shorten permitting procedures for renewable energy projects and infrastructure projects necessary to integrate additional capacity into the electricity system.

The Commission said the deadline to transpose these provisions into national law was July 1, 2024. In September 2024, the Commission sent letters of formal notice to 26 member states for failing to fully transpose the directive into national law. After having examined the replies from the eight member states, the Commission decided to issue reasoned opinions to Spain, Italy, Cyprus, Slovakia, and Sweden for failing to notify transposition measures and to Bulgaria, France, and the Netherlands for failing to provide sufficiently clear information on how their transposition align with the directive’s provisions.

The eight member states have two months to respond and take the necessary measures. Otherwise, the Commission may decide to refer the cases to the Court of Justice of the European Union, the Commission said.

The Commission also said Hungary and Poland have not fully transposed EU rules for the internal electricity market contained in Directive (EU) 2019/944, amending Directive 2012/27/EU. The directive lays down key rules regarding the organization and functioning of the EU electricity sector to create integrated, competitive, consumer-centered electricity markets across the EU.

The deadline to transpose the directive into national law was December 31, 2020. The Commission notified Hungary in February 2021 and Poland in May 2022 that they had not fully transposed the directive. After reviewing their replies and national measures, the Commission determined compliance issues remain.

Both countries have two months to respond and take action, or the Commission may refer the cases to the Court of Justice of the EU.

The Commission also issued additional reasoned opinions to Belgium, Estonia, Latvia, and Romania for not fully transposing EU Directive (EU) 2018/2001 on promoting renewable energy use. This directive establishes a legal framework for renewable energy in the EU, setting a binding target for 2030 and including rules for guarantees of origin, which inform customers about renewable energy in their supply. It also sets sustainability criteria for biofuels and facilitates citizen participation in the energy transition.

The Commission said the deadline for transposing the directive into national law was June 30, 2021. After sending formal notices in July 2021 and following up on responses, the Commission deemed their transpositions incomplete. The four member states have two months to address the issues, or the cases may be referred to the Court of Justice of the EU.

To contact the author, email [email protected]

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