Trump’s Pro-Crypto Agenda: Will Antitrust Regulators Keep Decentralized Cryptocurrency Competitive?
As former President Trump returns to office, the cryptocurrency and blockchain industries anticipate significant shifts, driven by early signs of support for digital assets and Web3 technologies. This includes the appointment of crypto advocate Paul Atkins to chair the Securities and Exchange Commission (SEC).
Industry leaders are optimistic that the pro-cryptocurrency stances of President Trump and his appointees will encourage a regulatory environment that promotes growth and innovation within the decentralized technology sector. However, a renewed focus also likely means increased scrutiny from antitrust authorities.
Potential Antitrust Focus
President Trump’s nomination of Gail Slater as head of the Antitrust Division at the Department of Justice (DOJ) signals an intention to protect “Little Tech,” including blockchain and Web3 startups.
This potential role for antitrust enforcers isn’t new. During Trump’s first term, former Assistant Attorney General Makan Delrahim emphasized the need to actively protect competition in the blockchain industry, warning against “entrenched monopolists.” Delrahim also initiated a program to educate DOJ staff about blockchain technology. After his term, Delrahim continued speaking about competition issues and is advising the transition team on antitrust matters.
The Federal Trade Commission (FTC) established a Blockchain Working Group during Trump’s first administration, indicating a broader interest in the technology’s impact on competition. This interest continued into the Biden administration, which encouraged the DOJ and FTC to examine the effects of digital asset growth on competition policy.
Over the Biden presidency, the industry experienced relatively stagnant growth. Industry leaders attribute this to a lack of regulatory clarity and perceived over-enforcement. President-elect Trump has pledged to reduce regulation of digital assets, a move expected to invigorate the sector. This scenario could position antitrust agencies as key players in shaping the competitive landscape.
Potential Focus Areas for the FTC and DOJ
The FTC and DOJ may examine specific aspects where competition issues could arise:
- Cryptocurrency Exchanges: Potential scrutiny if market power becomes concentrated among a few large players. Conduct that restricts user choice or innovation could draw regulator interest.
- Blockchain Infrastructure: Focus on whether key participants dominate specific layers, such as blockchain-as-a-service providers, creating potential bottlenecks or barriers for new entrants.
- Decentralized Finance (DeFi) Platforms: Scrutiny of governance structures that may subtly constrain competition among platforms. The FTC may examine governance, particularly cross-ownership, to understand competition’s effect on fees.
Consolidation
Many analysts predict mergers and acquisitions may accelerate. Antitrust authorities may play a critical role in examining these deals to preserve competition and potentially protect smaller firms.
Consolidation could raise competition concerns, particularly if major players accumulate outsized influence over critical segments. The agencies may evaluate mergers’ impact on both consumers and smaller competitors.
Decentralized vs. Centralized Organizations
Competition issues may manifest differently for decentralized, open protocols compared to traditional corporations regulated by centralized leadership.
While decentralized protocols often rely on community governance, consolidation of governance power could still lead to antitrust concerns. These entities also pose unique regulatory challenges, as their governance models can blur traditional boundaries of ownership and control.
The FTC and DOJ may need to explore new frameworks for assessing competitive harm in decentralized ecosystems, especially if coordination limits competition.
Overall, the blockchain and cryptocurrency industries anticipate notable growth, and the antitrust agencies may play a key role in preserving competition within that fast-evolving environment.
