Donald Trump’s return and crypto’s rebirth: 2025’s unexpected compliance headache

Remember back to January 2021? One bitcoin was worth around $7,000 and a twice-impeached Donald Trump left office in a huff. Who would have predicted four years later, both would come roaring back.

Perhaps more surprising than Donald Trump’s landslide election victory against Kamala Harris (who’d have thought?) is that bitcoin has soared to even greater heights. On 1 January 2023, the ‘value’ of a single Bitcoin, the most widely traded and recognised cryptocurrency, was $16,625.08. As 2024 began, Bitcoin was valued at $45,000. By November 2024, just after Trump’s victory, Bitcoin had soared to an all-time high of $90,000 and would peak at $108,000 in December.

Both phenomena are intrinsically linked, and both provide a wave of new compliance challenges for any regulated entity, law firm or financial services institution. Crypto—the favoured currency of gangsters, money launderers, and terrorist financiers—is back, and this time with a presidential seal of approval.

What are Donald Trump’s policies on cryptocurrency?

During his campaign, Trump positioned himself as a staunch advocate for cryptocurrencies, pledging to make the US “the crypto capital of the planet.” He had previously called them a scam in 2021. His platform included several bold proposals designed to bolster the adoption and legitimacy of digital assets. Key among these was his plan to appoint a cryptocurrency-friendly chairperson to lead the US Securities and Exchange Commission (SEC). This move is a game-changer for crypto, as the current SEC leadership has been criticised for taking a cautious and, at times, adversarial approach to cryptocurrency regulation.

Paul Atkins was announced as the nominee to lead the SEC on 4 December, 2024. Atkins is a former SEC commissioner—widely seen as its most conservative, anti-regulatory member—and has also called for increased enforcement against fraud. Since 2017, Atkins has been a member of the Token Alliance, a cryptocurrency advocacy organisation.

Trump also proposed the creation of a presidential advisory council for digital assets, a body that would bring together key stakeholders in the cryptocurrency industry to shape policy and advise on regulatory frameworks. Trump appointed 29-year-old Bo Hines, a failed Congressional candidate, to lead the Cryptocurrency Council.

Another critical aspect of Trump’s platform was his staunch opposition to the creation of a US central bank digital currency (CBDC). While many countries are exploring or developing CBDCs, Trump has argued that such initiatives pose a threat to financial freedom and decentralisation. His administration’s rejection of a government-controlled digital currency is viewed as a win for private cryptocurrencies like Bitcoin, which operate outside of traditional centralised financial systems.

This pro-cryptocurrency stance has instilled a renewed sense of market confidence, not just in Bitcoin but in the broader cryptocurrency ecosystem. Investors view Trump’s policies as a green light for growth, spurring significant inflows into digital assets. The optimism surrounding his re-election has also extended to traditional financial markets, with the US stock market experiencing a post-election rally. This alignment of bullish sentiment across markets has signalled a growing interconnection between cryptocurrency and mainstream finance, which did not exist to such a degree before.

Trump’s policies and rhetoric have positioned his administration as a catalyst for cryptocurrency adoption, setting the stage for a potential transformation of the US into a global hub for digital assets. But this presents unique risks for the rest of the world, with the potential for the US to become a new, powerful hub for laundering digital assets.

What caused Donald Trump’s change of heart on crypto?

This newfound enthusiasm for cryptocurrency was not only driven by external factors but also by strategic support from key sectors, notably the cryptocurrency industry itself. Over the course of several months, the crypto market poured $245 million into the US election.

According to Stand With Crypto, an industry lobby group, 253 pro-crypto candidates were elected to the House of Representatives, compared to 115 anti-crypto candidates. In the Senate, 16 pro-crypto candidates won seats versus 12 anti-crypto candidates.

For many in the crypto community, Trump represented a potential ally in pushing for favourable regulatory treatment, especially as the industry was facing increased scrutiny from government regulators. The bet seems to have paid off.

In addition to the financial backing from the crypto industry, Trump’s personal financial interests in the sector further fuelled his involvement in the space. In September 2024, he and his sons, Don Jr. and Eric, launched a cryptocurrency venture called World Liberty Financial, signalling the family’s commitment to the burgeoning industry. The venture focused on developing blockchain-based financial products and services, with aspirations to create a platform for buying, selling, and trading digital assets. This move not only aligned with the broader trend of political figures engaging with emerging technologies but also positioned the Trump family as personal stakeholders in the rapidly evolving cryptocurrency landscape. The second Trump administration is ready to leverage his influence to shape the future of digital finance.

Who’s who in Trump’s crypto-bro cabinet

Trump has assembled a pro-crypto team to shape his administration’s policy. Key appointments include:

David Sacks, former PayPal COO, as White House AI and Cryptocurrency Czar, tasked with creating regulatory clarity for digital assets.
Bo Hines, Executive Director of the newly formed Crypto Council, focusing on balancing innovation with consumer protection.
Paul Atkins, a former SEC commissioner, as the new chair of the SEC, signalling a lighter regulatory touch.
Sriram Krishnan, Senior Policy Advisor for AI, who will align blockchain and AI strategies.
Stephan Miran, Chair of the Council of Economic Advisors, advocating for integrating blockchain into economic policy.

Protecting your firm in the face of cryptocurrency risks

In 2025, regulated entities such as law firms and financial institutions face growing risks related to cryptocurrency transactions. As America moves towards cementing itself as the cryptocurrency capital of the planet under Donald Trump and his cabinet, the ease and social acceptance of crypto will grow. This does not remove its risk, nor the fact crypto is the currency of choice for the world’s gangsters, money launderers and terrorists.

Illicit cash can be converted to crypto in Moscow or Caracas, and spun around the world in seconds. Weapons can be bought in crypto stolen by hackers, and criminals paid off via online wallets without ever needing to convert their ill-gotten gains into real cash. In 2025, the crypto risk is vastly increasing.

What does the second Trump administration mean for compliance? Join our free, 1-hour webinar on Wednesday, 22 January 2025 at 10am EST / 3pm GMT

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GDPR added a significant compliance burden on DPOs and data processors. Data breaches must be reported to the authorities within 72 hours, each new data processing activity needs to be documented and Data Protection Impact Assessments (DPIA) must be carried out for processing that is likely to result in a high risk to individuals. Penalties for breaching GDPR can reach into the tens of millions of Euros.

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