200 Days of the Bitcoin President: Is Trump's Second Term Cause for Celebration or Concern?
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200 Days of the Bitcoin President: Is Trump's Second Term Cause for Celebration or Concern?
You can offer services in this "global crypto capital," but you might only be able to see it from behind bars.
Navigating Web3 tides with focused insightsAuthor: L0La L33Tz
Translation: AididiaoJP, Foresight News
Trump is far from being a "pro-bitcoin" president. Although the U.S. Securities and Exchange Commission (SEC) has dropped some of its most aggressive cases, there remain legal risks in building non-custodial and privacy-enhancing technologies in the United States. You might be able to offer services in this "crypto capital of the world," but you may only get to see that world from inside a prison cell.
Donald Trump assumed office as the 47th President of the United States on January 20, 2025. With over 200 days into his term, it seems like an ideal moment to review how this so-called "Bitcoin President" has paved the way for the U.S. to become the "crypto capital of the world" he promised—and where we're headed next.
First, during Trump’s second term, many prominent industry participants facing legal challenges under the previous administration have seen favorable outcomes.
Terra/Luna founder Do Kwon reached a plea deal with the Department of Justice, admitting guilt on just two out of nine charges related to investor losses exceeding $40 billion within days. The Second Circuit Court overturned the insider trading conviction of former OpenSea product manager Nathan Chastain. The U.S. Securities and Exchange Commission (SEC) dropped lawsuits against crypto exchanges Gemini and Coinbase, paused its case against Binance, and reportedly ended investigations into Consensys, Robinhood, and Uniswap.
Meanwhile, Justin Sun, founder of Tron, who previously faced not only SEC allegations of offering unregistered securities but was also reportedly under investigation by the Department of Justice (DOJ), is now dining with the president.
On the regulatory front, things also appear to be improving. From Ripple to Wyoming, everyone (and their affiliates) is announcing plans to issue stablecoins—thanks to the only piece of legislation to date that has become law: the GENIUS Act. While we still don’t know how much Bitcoin the U.S. government holds—apparently 200+ days isn’t enough time to complete a full audit—the celebration around a Bitcoin Strategic Reserve continues. However, the government appears to have no actual plan to purchase Bitcoin, instead opting to seize it from certain sources.
Everyone Is a Money Transmitter
Most notably, each of the aforementioned industry participants heavily relies on the development of open-source technology. Without open-source tools, none of the mentioned platforms could function, let alone exist. Yet for developers of such open-source technologies, the president's agenda appears less optimistic and more severe.
In July, Samourai Wallet developers Keonne Rodriguez and William Hill pleaded guilty to conspiracy to operate an unlicensed money transmitting business, facing up to five years in federal prison. One week later, Tornado Cash developer Roman Storm was convicted by a jury in the Southern District of New York on identical charges.
Both prosecutions followed a memo issued in April by Deputy Attorney General Todd Blanche, which was widely praised for supposedly ending the DOJ’s practice of using prosecutions to create new legal precedents, and explicitly called for prosecutors to stop targeting software developers for user behavior. Despite its acclaim, the memo left enough room to continue such prosecutions—making it about as reliable as the Trump administration’s promise to release the Epstein list.
Since then, regulatory clarity for developers has hit an all-time low. Based on the outcomes in the Samourai Wallet and Tornado Cash cases, non-custodial software developers may no longer be prosecuted solely for lacking a money transmission license—but they can still be charged for transmitting illicit proceeds. So are non-custodial software developers in the U.S. potentially liable as money transmitters facing criminal charges? Your guess is as good as mine.
The conviction of Roman Storm has set what is being called a "persuasive precedent," meaning anyone who builds non-custodial tools could be charged with federal crimes at the discretion of the Department of Justice.
Applying the Patriot Act to Digital Assets
In digital asset legislation, the past few months have been turbulent. Although the GENIUS Act was highly anticipated—particularly among those in suits (industry insiders) and those funding them (stakeholders)—it also opened the door for application of the Bank Secrecy Act, a law mandating anti-money laundering and Know-Your-Customer (KYC) requirements.
While the GENIUS Act formally codifies certain rules for stablecoin issuers under financial institution regulations, the Treasury Department has since solicited public input on the use of digital identity in so-called DeFi services—linked to the GENIUS Act and requiring non-custodial service providers to verify user credentials before executing transactions.
Overall, the Treasury's approach aligns with one of Trump’s earliest executive orders on “strengthening American leadership in digital financial technology,” aimed at promoting the “responsible growth and use” of digital assets, blockchain technology, and related innovations—the key word being “responsible.”
Last month’s first White House report on digital assets finally revealed what this “responsible” growth entails: asking Congress to create a new subcategory for digital assets under the Bank Secrecy Act, and urging FinCEN to consider next steps following the Biden-era mixer rule—a regulation that would effectively eliminate nearly all possibilities for transaction privacy, including the use of new, non-KYC addresses.
If this sounds unconstitutional to you—and in this country, code is law—I regret to inform you that in the direction we’re heading, we won’t need the Constitution. Most of the president’s proposals fall under the jurisdiction of the Patriot Act, and the White House has specifically requested Congress extend it to digital assets. And every time, the Patriot Act prevails over the Constitution.
In short, the Bitcoin presidency may sound great on paper, but in reality, the environment for software development in the U.S. has never been more hostile. If the Trump administration truly intends to fulfill its promises to Bitcoin users, it must drastically change course.
Until then, when the government invites us to "come home" and build our services in the crypto capital of the world, we would do well to proceed with caution—because you might only get to see it from inside a prison cell.
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