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Former President Trump has big plans for the vast federal regulatory infrastructure, like blowing it up (figuratively).
That’s the word from Rep. Byron Donalds, the Republican congressman from Florida and a prominent member of the House Financial Services Committee who spoke at crypto venture capital firm BlockTower’s investor day on Wednesday.
Donalds revealed that he shared a plane ride Tuesday night from Atlanta to Florida with the former president who is vying to be the next president. Donalds said the two discussed how to dismantle what he described as the regulatory “headlock” businesses like the $2 trillion crypto industry are facing from President Biden and Vice President Kamala Harris, Trump’s opponent in November.
“In short, President Trump is ready to clean house,” Donalds told an intimate group of crypto investors gathered at Miami’s Perez Art Museum. “And it’s not just a house cleaning, and then you don’t know what you’re going to do — there’s actually a systematic process for having people who are qualified, who have done work in our industries over time in the United States.”
Donalds blasted Securities and Exchange Commission Chairman Gary Gensler, one of the main characters behind the agency’s enforcement crackdown on digital assets and often described as the crypto industry’s arch nemesis. Trump has vowed to fire Gensler “Day One” if elected.
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“The man thinks that he is smarter than everybody in the room collectively,” Donalds said. “That is a height of arrogance, in my view, that you cannot have in a chief regulator.”
An SEC spokesperson told FOX Business: “The reforms adopted by the SEC under Chair Gensler’s leadership will enhance efficiency, competition, and investor protection in the U.S. capital markets. That’s good for both investors and issuers. The agency’s enforcement actions have held wrongdoers accountable and returned billions to harmed investors.”
U.S. Securities and Exchange Commission Chairman Gary Gensler testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, D.C., on Sept. 15, 2022. (Reuters/Evelyn Hockstein / Reuters Photos)
Donalds, himself a former banker prior to running for office, said he plans to tell Trump that the crypto industry needs a so-called “regulatory sandbox,” or a regime where startups and businesses in new, currently-unregulated industries are allowed to test their products and services in a controlled environment without the heavy hand of regulation.
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“This industry is going to change so fast over the next five years, and what we already know is that the regulatory agencies of Washington are not nimble enough… they do not have the experience and the knowledge of what is happening in this industry right now on a week-to-week basis, month to month basis, year to year basis,” he said. “You need the players in the industry to kind of make sure that the rules are clear.”
Former President Trump visits a cryptocurrency-themed bar called Pubkey in the West Village in New York City on Sept. 18. (Spencer Platt/Getty Images / Getty Images)
As previously reported by FOX Business, Trump has aggressively courted the crypto industry for votes, promising a lighter regulatory regime if elected. The reason: There are some 50 million Americans who interact with crypto, some counting themselves as so-called “single-issue voters” who will vote for a candidate based almost solely on whether they are favorable to crypto.
With that, Trump’s turnaround on crypto (he once called Bitcoin a scam) has escalated rapidly over the past year. Trump’s embrace of the industry coupled with the GOP’s support of it has turned crypto into an unexpected political football, forcing Harris to launch her own effort to woo the crypto faithful.
Donalds said that Democrats’ embrace of crypto can’t be trusted and that Democrat Party leaders like Massachusetts Sen. Elizabeth Warren, Ohio Sen. Sherrod Brown and Vermont Sen. Bernie Sanders are not serious about creating an environment where crypto can thrive. They have all largely supported the regulatory regime of the Biden administration and the Gensler SEC.
“They do not want any financial environment to exist in the United States where they do not have direct control and direct oversight,” he said.
From left: Former South Bend, Indiana, Mayor Pete Buttigieg; Sen. Elizabeth Warren, D-Mass.; Sen. Bernie Sanders I-Vt.; and former Vice President Joe Biden participate in a debate at the Gaillard Center in Charleston, South Carolina, on Feb. 25, 2020 (Jim Watson/AFP via Getty Images / Getty Images)
In a potentially contentious exchange, a member of the audience interrupted the panel to tell Donalds he didn’t care to hear his political viewpoints and said he came to the event to learn, not to be inundated with politics.
Donalds said, “I appreciated your comment” and calmly stated that the two major political parties have two starkly different viewpoints when it comes to regulation, owing to the fact that regulators are political appointees and may use their authority differently depending on their own party’s views.
He continued that politics aside, the job of a federal regulator should be about carrying out the mission bestowed upon them by Congress.
Donalds said the result has been regulators choking off access to industries like cryptocurrencies by pressuring the banks to do limited business with an industry they deem too risky to become a prominent player in the financial system.
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“Everybody wants to do business here, but not in a regulatory environment like this from the Biden administration, I will add, which is a continuation of the Obama administration. They are omnipotent busybodies who think they know better than all of you,” he said.